April 15, 2008
– Comments (2)
It seems there are lots of loophole in the law around the insurance. The law allows the FDIC to borrow money to cover losses should they exceed the reserves, which are only 1.22%, and only $52 billion.
I don't like this...
Ahhh, dwot - another very scary post. Should we put our money under our mattress?
The good news is that there are banks out there NOT caught up in the mess and they should be rewarded with many new bank accounts. JP Morgan is a great example. Wachovia, while taking a nice hit, is still, in my opinion, a very safe place to keep your money. Clearly, there is a crisis going on, but is it really time to put a run on the banks? I don't think so, but your post eludes to this fact.
Can you recommend a good place to put your dough, besides under your bed?
I am in Canada and I truly think our system has much more foundation even though the bubble hasn't burst. People have more equity here and they had more to start, so even with 10% down a person is more likely to stick around even if they end up owing 105-110% of their home value. It is the defaults on mortgages that is making the US scary. If our homeowner are taking the first 10%, well even if they do default, the loss per home is less.
It will be trouble, but I seriously would be looking to hide gold in the mattress or something with how dire I see it for the US.