the FDIC was created to protect in times of a few bank blowups - not a system-wide issue (not that this is or isn't)
Thanks for the link to the videos ... interesting. Such a significant change in numbers can't be a good thing ... regardless of the reason why. I think it is another indicator of the main problem with the credit problems the economy currently is experiencing ... banks are either unwilling or unable to lend money, regardless of were the Feds set the interest rate, which is leading to the many other credit concerns. If bank reserves are down while at the same time the amount of money needed as reserves against bad loans increases ... something has to give. CFM Trader
I'm telling you, if just a small portion of the country withdrew cash from the banks, that would create the death spiral. Fuck the FED, don't fight capitalism 2.0
It takes a lot of guts to go on TV and say "Folks, the banking system is now insolvent". Even if you are technically right you will be fired for sure. From the perspective of the man in the street as long as he can still get paper out the ATM nothing is wrong and that can keep happening until long after the banks are technically insoolvent with all the creative accounting and Fed intervention. Looks like EM are now safe havens, look at FXI and EEM., sureal.
It is critical but not in the way you think. The numbers show there is nothing wrong with the banking system. Contrary tio what you think, surplus is up and banks satisfy reserve requirements. Note that there are countries like Canada for example, with no reserve requirements. US has a more regulated banking system than other G-7 countries and despite what some cranks think, there is nothing wrong with it even after the subprime writedowns. Ron
She has to know better than that. The whole point here is that the collateral that is being accepted under this newly created TAF would not have been accepted previously by the Fed. THAT is the major point. Like I said it takes guts to say that if this new life line (TAF) had not been thrown to the banks the would now be in serious trouble, or at least in more trouble than they are already in.
Basically true as long as people still find the US financial system credible which ofcourse they still do (which is just as well as I have a good chunck of my net worth in relatively liquid form in US banks ), but that credibility has been dented with this credit crisis. I'm sure that a lot of money is thinking more seriously than before the credit crisis about diversifying out of the $. Question is where, if anywhere, is safer? Time will tell. The goal posts have been shifted in the middle of the game and there needs to be some acknowledgment of that.
if any big banks were near insolvency the dow would have plunged absurd amounts by now, you just cant hide this kind of information these days, just the rumors of Countrywide filling for bankruptcy knocked the financial sector down pretty significantly, now if it were tru that Bank of America or whathever couldn't meet its depositors demands the NYSE would shutdown trading for a week, everbody on the street would know this, some small banks will fail but I dont think the end of the world since it happens every recession