IPFS News Link • Corruption
More FDIC Malfeasance: 43% Loss
• The Market TickerAgain, we see that the FDIC refused to step in and close this institution when the firm's Tier Capital Ratio (based on an actual market value for assets) went below 6%, 5%, 4%, 3%, 2%, 1% and flat.
Indeed, the FDIC not only allowed all of the firm's Tier Capital (that is, their EXCESS CAPITAL) to be wiped out, but then allowed the bank to continue to operate until it's asset base was destroyed to the tune of 43% of "face value" before stepping in and closing the institution.
Prompt Corrective Action - a LAW, not a suggestion - is supposed to prevent this outcome. It is being wantonly and willfully ignored by the OTS, OCC, The FDIC and CONGRESS.
This level of loss is unconscionable and Sheila Bair, along with everyone involved in bank regulation at The Fed and the various Treasury departments (OTS, OCC and FDIC) must be held to account for their willful and intentional blindness.
"Mark to Myth" is not just a myth, it is a willful and intentional lie.
Again I ask:
What is the actual value of assets in our nation's banks - including the really big ones like Bank of America, Citibank, JP Morgan and Wells Fargo?
How can anyone possibly believe, given the overwhelming history of the last two years in this crisis, that the nation's banks are claiming and carrying their assets atanything close to their actual value when we continue to see, week after week, losses to the deposit insurance fund proving that close to half of the claimed "asset value" in these seized banks is a pure, unadulterated fiction?RelatedSheila Bair Addresses A Worried Nation100: Partners Bank, Naples, FL
101: American United Bank, Lawrenceville, GA
102: Hillcrest Bank Florida, Naples, FL
103: Flagship National Bank, Bradenton, FLAs you watch the bobbing metronome of Sheila C. Bair's head during this video ("...but as I said [left tick] we have the ability to immediately access [right tock] up to $500 billion from our Treasury line [left tick]...") wonder to yourself quietly:
How is the FDIC going to slurp down another $500 billion without some roof rasing action on the debt ceiling? How can ANYONE promise that no insured depositor will ever (until the heat death of the universe) lose a dime? What family of narcotic sedatives are being used in this video?Meanwhile, if anyone is spreading evil rumors about the FDIC, make sure to email flag@fdic.gov immediately.
Try not to get motion sick and vomit. Also, try not to vomit.
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1 Comments in Response to More FDIC Malfeasance: 43% Loss
I thoughtthe FDIC has full faith and credit backing by the US treasury?
outstanding at any one time, subject to the approval of the Secretary of the Treasury: Provided,Actually, no, it does not. The language inis clear and unambiguous (emphasis mine): (a) BORROWING FROM TREASURY.-- The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes,outstanding at any one time, subject to the approval of the Secretary of the Treasury: Provided,
How long does the FDIC have to repay me if things go bad?
Here things get murky. We turn to Section 11 of the act and find this (emphasis mine):(f) PAYMENT OF INSURED DEPOSITS.-- (1) IN GENERAL.--In case of the liquidation of, or other closing or winding up of the affairs of, any insured depository institution, payment of the insured deposits in such institution shall be made by the Corporation as soon as possible, subject to the provisions of subsection (g), either by cash or by making available to each depositor a transferred deposit in a new insured depository institution in the same community or in another insured depository institution in an amount equal to the insured deposit of such depositor.
That only says “as soon as possible” and sets absolutely no time limit or maximum. Taken to the extreme, it might be impossible for the FDIC to ever make depositors whole again, and this is one of dozens of such “outs” that exist in the document. Remember, this act was written in 1933 when money was gold, times were uncertain, and government lawyers were exceedingly careful to avoid locking the government into any possible financial black holes.
http://bluelori.blogspot.com/2009/10/with-fdic-is-your-money-safe-not.html
Actually, no, it does not. The language in Section 14 of the FDIC Act is clear and unambiguous (emphasis mine): (a) BORROWING FROM TREASURY.-- The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes, not exceeding in the aggregate $30,000,000,000