The Engtovo Chronicles

Related to this CNN fear mongering they kept saying over and over the FDIC is fine and not to worry even though I have read several things that bring up legitimate questions about that.  On August 27th after the Indy Mac failure  MsNBC had a story

Mortgage mess puts more banks at risk - Deposit insurance fund, depleted by failures, looks to rebuild capital
http://www.msnbc.msn.com/id/26424106/

Here is a quote from that story about FDIC

 

Those failures have depleted the insurance fund, which now stands at $45 billion — less than the FDIC is supposed to have on hand, according to Daniel Alpert, an investment banker at Westwood Capital.

 

“You’re talking about roughly $45 billion of reserves insuring $4.5 trillion of deposits,” he said. “And you’re in an environment right now where non-current loans, delinquent loans are increasing at a faster pace than banks putting aside reserves. That’s not a good thing.”

 

To replenish the insurance fund, the FDIC said it plans to raise the premiums it charges banks — and may charge the highest premiums to the banks with the riskiest deposits. While that will put the fund on a sounder footing, it could make life more difficult for bankers trying to shore up their own assets, according to Peter Sorrentino, a portfolio manager at Huntington Asset Advisors.

 

“You’ve got a risk of siphoning off capital when it’s needed,” he said.

 

Bair also told the Wall Street Journal the FDIC couldn’t rule out the possibility that it may have ask the Treasury for capital to tide it over through the coming round of bank failures. The money would be used to pay depositors insurance claims, and then paid back after the assets of the failed bank are sold.

They also Had a story with this title:

FDIC may borrow money from Treasury
report: Money needed to see agency through an expected wave of bank failures

http://www.msnbc.msn.com/id/26420600/   the page has expired though, so there is no story how convenient