5 Safest Banks
5 Safest Banks
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Jackass Investing: Don’t do it. Profit from it. $9.99 Jackass Investing is as provocative as its title. Mike Dever systematically rips apart the conventional investment wisdom – myth by myth – then replaces it with a “return driver” based methodology that results in a “Free Lunch” portfolio – one that produces both greater returns and lower risk. More than ten years in the making, and supported by the twin pillars of extensive research and more than … |
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Digital Foci Photo Safe 80GB Digital Picture Storage $179.00 An essential digital camera companion – Imagine being on vacation and you are snapping digital pictures like crazy. Having Photo Safe with you means having a place to save your precious pictures so you can keep snapping away. Just insert the digital camera memory card into Photo Safe and directly download images – no cumbersome cabling or computer needed. Photo Safe frees up expensive memory card … |
How much safety net is FDIC insurance?
Given the recent IndyMac failure I was checking on FDIC insurance for my bank deposits. It ws shocking to hear the stats — there are ~6 Trillion $ deposits across US, 4.5T of which are “FDIC insured” accounts.
Now, the FDIC has (as of 2007 end) mere 52B $ in the reserves, That is 1.19% of the total assets they are trying to back up.
With last 5 bank failures, FDIC has lost 10% of their reserves.
That looks like a very dangerous stats to me. If extrapolated, another 50 banks under water and FDIC will be pretty much bankrupt.
Are my assumptions right? Given the risky loans and all big banks which seemed safe going belly up, is the day where FDIC is bankrupt a realistic thought? What happens when the govt security safety net itself fails?
Or, is 1.19% reserves in FDIC a common scenario?
FDIC insurance obligations are backed by the full faith and credit of the United States.
The United States prints the money. The US government can, if necessary, pay an infinite amount of dollar-denominated obligations. What it might do to the value of the currency is another question.
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