Whose Idea Was It?

$700 Billion Is Nothing (0.00 / 0)

"If those in charge of our society...can dominate our ideas, they will be secure in their power. They will not need soldiers patrolling the streets. We will control ourselves." ~~Howard Zinn

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by: lakezoarian @ Fri Oct 03, 2008 at 13:40:25 PM UTC

life imitates the Simpsons (0.00 / 0)

  Gabbo:  And now it's time for another patented Gabbo Crank Call!
  Bart:   I can't believe it.  He stole this bit from Krusty!
  Lisa:   Yeah, well, Krusty stole it from Steve Allen.

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." - Warren Buffet

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by: joesaho @ Fri Oct 03, 2008 at 16:09:18 PM UTC

Somebody explain this to me (0.00 / 0)

I don't get how raising the FDIC limit is going to make any difference for me or the vast majority of Americans.  

The current FDIC rule insures up to $100K in any particular bank.  That means if you have more than that amount in savings, you need to open an additional account in a different bank.  That's not exactly a huge problem for me or most of us.

The way I see it, the $250K limit will benefit only the wealthiest 2 or 3% of our nation, most likely involved in the banking business, while the rest of us will pay for it.

How exactly is that supposed to help us?  Tell me what I'm missing, because it sounds a lot like just another govt. funded giveaway to the large corporations.


Connecticut Bob

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by: Bob Adams @ Fri Oct 03, 2008 at 18:39:18 PM UTC

Obama's explanation (0.00 / 0)

When Obama mentioned his plan to raise the FDIC limit, he included this:

Obama's email statement ... said that although the current limit is "more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs."

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by: CaptCT @ Fri Oct 03, 2008 at 19:03:49 PM UTC

[ Parent ]

I think that was the best and only good idea in this bill (0.00 / 0)

If congress had a half a brain they'd have indexed the amount covered to the inflation rate too.

Things like this,minimum wage and alot of other things should be linked to the real world just like Social Security,medicare and pensions are.

Of course I also believe in cost of living adjustments (COLA) and unions and collective bargaining.

Now that the middle class has suffered the biggest shinkage in their purchasing power in history perhaps they'll figure out Ronald Reagans trickle down revolution totaly screwed them.
Perhaps they'll even figure out their willingness to buy into the scam of changing their retirement plans from "Defined Benefit" to "Defind Contribution" assured that in their retirement years they'll have less economic security then their parents did.  

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by: ctkeith @ Fri Oct 03, 2008 at 19:06:29 PM UTC

[ Parent ]

Move to shore up investor confidence? (0.00 / 0)

Bob, the insurance --intended to increase depositor confidence and help maintain liquidity by preventing runs on banks -- is per depositor, not per account. Thus, if you went to a different institution, you could open up a different account and be covered.  However, at the same bank, only a retirement account up to $250,000 would be accounted for separately.   Because banks no longer are separated as they were before the repeal of Glass-Steagall, banks which participate both in investment bankding and retail banking could face an exodus of retail related assets if people got spooked by the IB problems we are having now.

I would think it's more protective both of banks and account holders to up the insurance than to count on everyone being knowledgeable and able to do what you suggest at exactly the right time.  The current level has been in place since 1980, so it may make sense to update the amount now anyhow, crisis or no crisis. Hmm, a sardonic thought:  Will we find out that the economic crisis is a pre-existing condition? (rolls eyes)

Even if there are few investors who invest that much money, those few investors taking their money elsewhere an have as big an effect on the bank as numerous smaller investors taking out their money. Small businesses may easily fall in the range between $100K and $250K.

The google is my friend.  See therein an article describing the nuts and bolts of FDIC coverage.

Wikipedia is also interesting on the history and structure of the FDIC's rescue provisions.

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by: greenpeas @ Fri Oct 03, 2008 at 19:22:56 PM UTC

[ Parent ]

I dunno (0.00 / 0)

initially I liked this idea. I don't know if people really think about opening separate accounts to max out their FDIC coverage, maybe some do but I would assume they don't go through the hassle of opening a new account every time they break $100k. Of course, the really wealthy don't break everything down into $100k chunks, they just put it in investments or out in Switzerland or something. I don't think it necessarily helps one group or the other, it's just something to boost confidence as greenpeas says.

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." - Warren Buffet

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by: joesaho @ Fri Oct 03, 2008 at 19:38:07 PM UTC

[ Parent ]

Buying a home? (0.00 / 0)

House costs $500,000. You need to out 20% down to avoid insurance... that's $100K, add in the closing costs etc. and that's another $20K, so on a $500,000 home you would need about $120K in the bank before you can buy. Add in a 20% buffer (for expenses like new appliances, furniture etc._ that means a prudent buyer would have $130-150K in the bank before they go out to purchase.

I know of a number of people that have been saving up for new homes that have had over the $100K in the bank before they went to buy. I know at least four people that sold at the peak of market, moved into a leased home for the last year or two and are now in the market to buy. These people are sitting with real money in the bank (in at least one case, with well over $800K in various instruments, and since they are getting close to finalizing a purchase most of that was being moved into banking accounts - and before you say "millionaire" he has spent 30 years in aerospace (McDonnell Douglas - now Boeing) and his wife works as a USPS employee) - they just sold the house at top of market, after living in it almost 30 years and now are looking for a nice place on the beach for "retirement" that they will be paying for in full since the price has dropped about 40%).

My point is that for many, buying a home prudently requires a bit more than $100K these days.

The question is not what you are, we already determined that, we are now negotiating price.
electrealdemocrats.com Online since 3/07 -- TimetogoJoe.com Online s

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by: Met00 @ Fri Oct 03, 2008 at 21:12:09 PM UTC

[ Parent ]