Bankers shocked by "The Mythical FDIC fund"

Bankers are apparently shocked (literally "SHOCKED" I tell you) to find out that the FDIC Insurance Fund is nothing more than an "accounting fiction"!

How did they finally "discover" this? Well, apparently it was recently (8/27/08) admitted in a document by Bill Isaac, the former FDIC chairman, in a TRUE piece of comedy {you HAVE to read it} which he entitled "The Mythical FDIC Fund" (see link to PDF below -- also linked in article.)

The money quote is right at the start of the article:

http://seekingalpha.com/article/95129-fdic-insurance-fund-it...

FDIC Insurance Fund - It Doesn't Actually Exist
posted on September 12, 2008
by Vernon Hill

When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering.

We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like."

The insurance premiums aren't really premiums at all, therefore. They're a tax by another name.
[...]

The rest is even funnier.

What this articles proves is what I have long known; most bankers (these days) don't know their head from their, well you know. Amazingly I had this figured out and FULLY explained to me back in the early 1980's when I worked as an Asst. Manager in a small bank branch (under the tutelage of a REAL banker, who explained the whole fiat scam to me {as well as a lot more on how to determine whether people were a good debt risk, additional knowledge today's bankers are also apparently completely ignorant of} ...he also explained quite clearly that the system would eventually collapse; and he was only wrong is his prediction of WHEN it would all collapse; Carl thought it would happen before the year 2000).

Basically today's "40 year veteran" bankers are the equivalent of Ma & Pa Kettle (who thought banks kept their money in that vault and watered it daily to somehow "magically" make it grow).

Hi-larious.

Read the document that has them in a tizzy.

The BEST part of *THAT* document:

When I [William M. Isaac] became Chairman of the FDIC in 1981, the FDIC's financial statement showed a balance at the U.S. Treasury of some $11 billion. I decided it would be a real treat to see all of that money, so I placed a call to Treasury Secretary Don Regan:

Isaac: Don, I'd like to come over to look at the money.

Regan: What money?

Isaac: You know . . . the $11 billion the FDIC has in the vault at Treasury.

Regan: Uh, well you see Bill, ah, that's a bit of a problem.

Isaac: I know you're busy. I don't need to do it right away.

Regan: Well . . . it's not a question of timing . . . I don't know quite how to put this, but we don't have the money.

Isaac: Right . . . ha ha.

Regan: No, really. The banks have been paying money to the FDIC, the FDIC has been turning the money over to the Treasury, and the Treasury has been spending it on missiles, school lunches, water projects, and the like. The money's gone.

What REALLY is hilarious is that somehow these bankers think that a vault full of FRN's (aka "dollars" [sic]) would somehow be different than any other form of "IOU" that the government would put there. Proof positive that nearly all bankers are as ignorant as the rest of the public, and...

PAYBACK'S A B*TCH, ain't it?