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What's In Your Banks Wallet?

The Banking Crisis Is Far From Over Revisited – FDIC Troubles and Bank Shenanigans

In August of 2009, I wrote an article The Banking Crisis is Far From Over where I concluded banks were still threatened by bad assets, forced to pay higher premiums to the FDIC, and market to market accounting was at the center of a heated debate.

When I wrote that article, 77 banks had failed and by the end of 2009, just 4 months later, the number of failed banks had almost doubled to 140. 20 banks have failed thus far in 2010.

Is the FDIC Solvent Enough To Keep Up This Bank Rescue Pace?

The FDIC solution to shore up their funds was to have the banks themselves pony up three years of dues in advance rather than the "pay as you go" funding. This was to add $45 billion to the fund, yet by November of 2009, the FDIC fund was in the red for the first time since 1992.

Today, the fund sits at negative 20.9 billion with no help in sight.

With these kinds of numbers, does it really matter whether the FDIC insurance limit was raised from $100,000 to $250,000 when the Fund itself is insolvent? I have an idea....why don't they raise the FDIC insurance limit to $1 Million? That will solve all the problems right? Do you see how absurd this FDIC insurance limit number is?

The Problems for Banks Don't End With the FDIC Insolvency

Read the rest here including the latest tricks banks are utilizing to keep the truth of their insolvency hidden from Federal regulators and keep the FDIC from knocking on their doors: http://fedupbook.com/blog/fdic/the-banking-crisis-is-far-fro...




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Don't just walk away!

The LA Times wrote about the squatting that's occurring by those who are underwater with their mortgage the day after my article:

Many borrowers in default stay put as lenders delay evictions

http://www.latimes.com/business/la-fi-squatters27-2010feb27,...

With 20 million more foreclosures on the way, is it any wonder that Obama is calling for a ban on foreclosures?

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

If the banks are already

If the banks are already keeping houses off the market to keep the FDIC from calling, Obomb's calling for a foreclosure ban is just propaganda. The dam will break and the flood will be greater, but if the banks already sold the notes, they already collected once anyway.

Funny how the govt chose to wait till unemployment surged...

before requiring mark to market.

When a mortgaged home gets reassessed down, does the bank have to mark to market that asset lower?

Depends...

on the definition of "Available for sale."

If an asset the bank holds (a house) becomes "available for sale," then that asset has to be marked to market.

If the house is foreclosed, then it would become "available for sale" and would have to be marked to market at the lower price. Banks cannot afford to do this.

From what I see, banks are allowing people to stay in their houses without paying a dime in mortgage to keep the asset from being marked to market. In a sense, they are keeping their bank from being taken over by the FDIC by keeping their balance sheet propped up on assets that are worth much less than they are.

What's in your banks wallet?

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

bump...

I changed the title and wanted to see how that affects readability...

Plus I want people to read how banks are artificially propping their balance sheets in order to keep the FDIC from knocking on their doors. They are literally letting folks stay in their homes without paying a dime! They refuse to foreclose as that would mean they would have to mark to market the foreclosed property, thus reducing the asset side of their balance sheets and possibly triggering an FDIC takeover.

Things are much worse than they seem and no one is talking about this...

So I ask...."What's in your banks wallet?"

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!