Why would "depositors get burned"? The smart ones should already be taking their money out of these zombie banks. It's only a matter if time these banks will go under.
>>> SIPC is safer or less safe than FDIC <<< YMCA will plug 'em both. >>> I am not ready to put my money under my mattress or buried in my backyard, yet. <<<<< Then you'll wake up one morning and discover than your CRCs/ATM don't work, you've got $20 in your pocket, phone help lines are jammed and the public is in long lines begging for help. If you've got your stash, you can sidestep this disaster. Everybody gets buggered in a deflation but those prepared for the worst will go thru' far less pain. Your wife and kids will thank you later, much later for your prescience, the current supposed too-muchness of taking such drastic action like safes etc. notwithstanding. >>> wouldn't depositors be allowed to remove the items from their safe deposit boxes <<<< Dream on! Any number of reasons can be cooked up to delay giving you what's rightfully yours - in a panic all stable datum concepts get rocked and crushed.
Remember the MBA progam? Study to be a surgeon, yeah, still works. Study to be an engineer, yeah still works great. But Finance? .. MBA? .. send the kids to a one-room schoolhouse and save hundreds of thou. Remember these geniasses' soothing comments? Year 2001: Money Magazine reports that the CEO of Fannie Mae "May be the most confident CEO in America" July 13, 2007: Bloomberg News - Lehman, Bank of america & Barclays say the rout is over. July 2007 Fortune Magazine quoting Henry Paulson, US Treasury Secretary - "This is far and away the strongest global economy I've seen in my entire business lifetime" The sub prime mess is over at 100 billion loss (Henry Paulson in 2008) ..... the losses then went on to almost $13 trillion. ----------------------------- Stash your stash - keep a minm. 2-year supply of hard cash.
FDIC is broke. How will they protect depositor's money?. FDIC guarantee is for $250,000 only. What about protecting people who have more than $250,000 in their accounts at the time of bankrupcy?.
If the FDIC ever does not make good on its guarantee then you have a lot worse things to worry about then money. The $250k limit can be increased by being creative when you title accounts, for instance an account with 4 co-owners is protected for a million. You can also setup accounts with multiple beneficiaries to increase the limits. And of course, you can put your money in more than one bank since the coverage is per bank. http://www.fdic.gov/deposit/deposits/difactsheet.html
There is no worry about the FDIC. If they need to back the assets of some bank they simply go over to their computer and type in whatever number they need and then withdraw that number from their current balance. If their current balance gets too low then the FED goes over to its computer and types in a number the FDIC needs and reduces that number on another column on their spreadsheet. That number gets charged to the taxpayer. This is the crux of the system. There is one and only one way this system will fail -- if people lose confidence in the dollar. Well shit, all the FED has to do to prevent that is to go out and begin buying dollars, much they way they are buying bonds to keep rates low. The FED can manipulate whatever market it wants to achieve the result it wants so it's highly unlikely the universe will lose confidence in the dollar because the FED can raise it to whatever level it wants. Conclusion: The Dollar, FDIC, and the FED are as good as gold. BAC ain't gonna fail. It goes like this: FED ---->>>> FDIC --->>>> Bank --->>>> Me and You. Now place a big loop under this illustration going back to the FED and type "Taxpayer" in the middle of that loop.
I agree with you. There must be many depositors/account holders in those failed 106 banks with more than $250,000 in their account and they must have lost big money when those 106 banks failed.
Although to play devil's advocate with myself, a good number of these banks were taken over by other banks without the FDIC requiring to take a hit at all (the acquiring bank assumed all assets) so in those cases the account holders even over the limit didn't take a loss.