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alstry (36.57)

INSANITY has no limits in 9.09

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September 22, 2009 – Comments (12)

The Federal Deposit Insurance Corp may ask healthy U.S. banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, the New York Times reported, citing senior regulators.

The paper said the initiative, which has gathered strong support across the board, is seen as a more attractive alternative to tapping the $500 billion line of credit with the U.S. Treasury, or yet another emergency assessment.

According to the paper, the FDIC was reluctant to approach the Treasury department for additional funds, since any new borrowing could be seen as a bailout, and have a strong political reaction.

http://finance.yahoo.com/news/FDIC-may-tap-US-banks-for-rb-2078843683.html;_ylt=AoVtlof1MT4AjXfimpUnPnO7YWsA;_ylu=X3oDMTE1cWY0cHB0BHBvcwM4BHNlYwN0b3BTdG9yaWVzBHNsawNmZGljbWF5dGFwdXM-?x=0&sec=topStories&pos=6&asset=&ccode=

LET'S THINK ABOUT THIS FOR A SECOND......

We are going to borrow from the insured to insure the insured's accounts????

That would be like borrowing from the homeowner to insure his house.

Not only that, the FDIC borrowing from banks that are borrowing from the taxpayer for practically free and the banks are loaning back to the FDIC at a much higher rate.  This is absolutely insane...why wouldn't the FDIC borrow at the same rate as the banks and save the taxpayers the spread?????

Furthermore, we are not even sure that the banks are solvent because they are not marking their assets to market as we all know that the market value of the collarteral for their loans are crashing.

Bascially, we are now effectively paying certain taxpayer bailed out banks to insure deposits that they should be rightfully paying to insure.  Could you imagine if you got paid to insure your own house???  The insurance industry would be out of business tomorrow.

In any other environment, this would be legal fraud and nothing more than a Ponzi scheme....we normally prosecute citizens for this type of financial charade.  Insureds can't be paid to insure themselves.....there is no consideration for the transaction.

Denninger is the only one so far that has picked up on this....let's see if more catch on....

http://market-ticker.denninger.net/archives/1456-CORRUPTION-Reverse-Insurance!-FDIC.html

12 Comments – Post Your Own

#1) On September 22, 2009 at 4:57 PM, SolarisKing (< 20) wrote:

Yeah, i saw that too.

They're are approching insanity.

-solaris

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#2) On September 22, 2009 at 5:06 PM, bridgeboy0 (30.97) wrote:

Ok, it was only a matter of time.  I mean if you post 80 times a day eventually, you have to come up with something that seems reasonable to post.

Ya, this is pretty stupid.

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#3) On September 22, 2009 at 5:19 PM, alstry (36.57) wrote:

bridge,

Soon you will realize that all of my blogging revolves around the same central theme....Zombulation.

When you extend too much credit for a long period of time to a single market economy and that market becomes dependent on that credit to function...namely the consumer and non federal entities which we shall also define as the consumer....when you pull credit, it becomes mathematically impossible to service the accumulated debt and most within the economy fails or defaults.

Much of my blogging is simply providing evidence of the collapse of the American consumer economy.  The fact that the FDIC, FHA, and Pension Guaranty are out of funds are simply additional evidence of massive amounts of defaulting debt.

The crazy part is that we are still at the beginning of the unwind unless we restructure soon.

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#4) On September 22, 2009 at 5:37 PM, jatt22 (40.37) wrote:

but  why  dont  ordinary  pplz  raise  these  issues  ,  my  mean  seriosuly   news  just  come  n go  and  dats  it  .  looks  like  god  is  really  saving  america  now + rec

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#5) On September 22, 2009 at 5:40 PM, jason2713 (< 20) wrote:

This is laughable, I read this today.

I tip toed back into the market yesterday, came up $3000 in the green.   WTF?  I'm going to give it another day or two, and I'm out!

I'm sitting the sidelines on this one.  I tried shorting, no such luck

 

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#6) On September 22, 2009 at 5:49 PM, dickseacup (66.89) wrote:

jatt22: because they can't reason logically, worry too much about what is on teevee or what their neighbors are doing and plain old don't care about anything that isn't blatantly, in-their-face affecting them. Even something as audacious as this report is too complex for most people to wrap their heads around.

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#7) On September 22, 2009 at 5:55 PM, alstry (36.57) wrote:

Guys,

At some point, worse is better than expected equals zero.

H.B. Fuller Q3 revenue $315.3 mln vs $362 mln

Seagate sees quarterly sales at high end of range

"The high end of the range" is still 15% less than last year....but better than expected of course.

As more and more dollars in a shrinking economy are forced to service debt......there will be less and less available for the purchase of goods and services.

Unless we restructure debt.

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#8) On September 22, 2009 at 6:01 PM, mikecart1 (98.89) wrote:

Hey Alstry, you know what today is?

09-22-09

You got 8 days, or everything you said for months will go up in smoke and I will LOL for days. 

DOW is going to 12,000 and the economy is pretty much healed.  Where is the end of the world hehe?  Also my portfolio's only problem is finding out what to do with all the money!!! HAHAH!

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#9) On September 22, 2009 at 6:02 PM, alstry (36.57) wrote:

YOU SIMPLY CAN'T STOP ZOMUBULATION UNLESS YOU RESTRUCTURE DEBT....

Health insurer WellPoint said Tuesday it may trim some more jobs as part of a push to become more efficient next year.

WellPoint said it expects year-end medical enrollment to decrease to about 33.6 million members, a 4 percent drop.

The insurer cut about 1,500 jobs earlier this year and currently employs slightly less than 42,000 people, according to Binns.

Other insurers also have reported declining membership due to rising unemployment. WellPoint competitors Cigna Corp. and Aetna Inc. also have announced job cuts in the past year, as insurers have struggled with enrollment declines and rising medical expenses.

ZOMBULATION CAN'T BE STOPPED EVEN IF YOU SUE THE ZOMBULATOR

Conn. union sues to halt Pratt & Whitney job cuts

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#10) On September 22, 2009 at 8:09 PM, ReadEmAnWeep (36.99) wrote:

Only 8 more days! Can he pull it off?

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#11) On September 22, 2009 at 8:22 PM, JIMRH1 (< 20) wrote:

If the fed were by some strange cosmic event, that was preordained before the dawn of time actually raise interest rates and ends it's current policies you would see a severe market crash, but that is not going to happen (yet)

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#12) On September 22, 2009 at 9:49 PM, debtRichQuick (< 20) wrote:

Alstry, I don't really see much wrong with this, yet. This can easily be seen as a way of withdrawing liquidity from the system can't it?

I will admit that this does sound like it may make very little sense to do, but I think we should wait until we have further details before drawing a conclusion that the method makes little sense.

Your comment was:

"Not only that, the FDIC borrowing from banks that are borrowing from the taxpayer for practically free and the banks are loaning back to the FDIC at a much higher rate.  This is absolutely insane...why wouldn't the FDIC borrow at the same rate as the banks and save the taxpayers the spread?????"

We are jumping to a massive conclusion here. We don't know that the FDIC will be paying higher rates. When reading the link you provided, I wonder how this alternative is more attractive, as the article states, not less attractive as Denninger concludes.

Denninger bugs me. The guy continually show us his incredible ability to make...anything on this green earth...look like a black swan. Give him a brush with white paint, a white canvas, and an hour, and he will talk you through enough conclusions to get you to see this "black swan" he painted.

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