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I've heard lots of different explanations for the financial crisis. IMO, apart from the Federal Reserve, the Federal Deposit Insurance is the most culpable.
I believe that a gradual phasing out of deposit guarantees is the solution to many of our problems.
Considering few people are wasting their money in savings accounts at 0.5% interest I wonder if we really need the FDIC to protect what is not there. I think we should return to a savings and Loan system where savings banks paid 5% on guaranteed accounts and charged 7% on mortgages.
I've heard lots of different explanations for the financial crisis. IMO, apart from the Federal Reserve, the Federal Deposit Insurance is the most culpable.
Can you be more specific about what decisions the FDIC made, and when, that you allege caused the financial crisis?
The rights grip on reality slips further into an ever deeper state of delusion by the day!
Between 2008 and 2011, there have been 406 bank failures that represents a payout by the FDIC of $12 billion plus to insured depositors. When you consider that the stock market lost $17 trillion during 2008-2009 destroying the value of 401(k)s and pension fund investments, do you honestly think that it would be anything approaching sanity to add to that total the lost savings of millions of depositors?
I've heard lots of different explanations for the financial crisis. IMO, apart from the Federal Reserve, the Federal Deposit Insurance is the most culpable.
I believe that a gradual phasing out of deposit guarantees is the solution to many of our problems.
What are you thoughts?
I couldn't come up with a more reactionary stance that ignores the reasons why there is an FDIC -- but such ideas are indicative of the hard-right that hates everything government, regardless of the good it does.
FDR instituted FDIC. Prior to that, one could start a rumor that a bank was in financial trouble, whether true or not, and depositors afraid that their deposits were at risk, would rush to the bank to withdraw their money. (Remember that scene from "It's A Wonderful Life"?)
The problem is that the bank only keeps a fraction of deposits as cash-on-hand. The rest is invested in loans, like mortgages. A bank run guarantees a bank's failure.
FDIC provides confidence because the government is backing depositor's money with insurance that the bank pays for. In addition, as a term for this insurance, the bank agrees not to invest in risky activities.
There is nothing not to like about FDIC.
Oh, the Federal Reserve isn't responsible for the financial crisis. That's purely in the lap of greedy financial institutions that made money by repackaging loans and selling them to unsuspecting investors as AAA investments. As such, they had every incentive to write worthless mortgages, because they wouldn't be the ones holding the bag when the mortgages failed. In fact, Citibank was betting that the mortgages would fail.
Can you be more specific about what decisions the FDIC made, and when, that you allege caused the financial crisis?
1. where specifically does your bank invest your money?
2. did your bank make sub-prime loans? did they make liar loans, alt a's, 3. do they do their due dililgence before making loans?
4. what kind of downpayment does your bank require?
5. do you put all your cash in one bank?
6. is your life savings all in cash or do you have exposure to other asset classes.
You want bank runs to come back like they did in the Depression?
is that what would happen? do you not think that were it not for the birth of the fdic, a different kind of bank would emerge? what i'm referring to is a bank with all the services of today's retail banks except they don't lend your money out, they derive their income from service fees.
1. where specifically does your bank invest your money?
2. did your bank make sub-prime loans? did they make liar loans, alt a's, 3. do they do their due dililgence before making loans?
4. what kind of downpayment does your bank require?
5. do you put all your cash in one bank?
6. is your life savings all in cash or do you have exposure to other asset classes.
I asked you a simple question and I get 6 questions in return? i'm not going to play stupid little games.
I've heard lots of different explanations for the financial crisis. IMO, apart from the Federal Reserve, the Federal Deposit Insurance is the most culpable.
I believe that a gradual phasing out of deposit guarantees is the solution to many of our problems.
What are you thoughts?
Try providing your thoughts first. A statement with no logic is just a statement with no logic.
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