Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Flashback: Head of FDIC Says ‘The FDIC will never go broke’

Stock-Markets / Credit Crisis 2009 Nov 27, 2009 - 09:29 AM GMT

By: Mac_Slavo

Stock-Markets

Best Financial Markets Analysis ArticleFlashback: On January 15, 2009, the head of the Federal Deposit Insurance Corporation, Sheila Bair, insisted that deposits in American banks were secure:


“The FDIC will never go broke. We are still running at a surplus, our reserves seem to be quite fit for the projected closure activity that we have,” Bair said.

Bair said the FDIC won’t rule out that in the future they may need to borrow from the Treasury, but added: “At this time it doesn’t look like we will have to do that.”

Flash-forward: To Sheila Bair we say “Good Call!” As of today, November 27, 2009, the FDIC is not only broke, but $8.2 Billion dollars in the red:

It’s official: the overwhelming number of bank failures since the onset of the nation’s financial crisis have pushed the FDIC’s insurance fund into negative territory. The agency said Tuesday that its reserve used to protect consumers’ deposits when a financial institution goes under is $8.2 billion in the hole.

For another flashback, we direct you to the first full day of the Obama administration being in office. In an interview with CNBC on January 21, 2009, Ms. Bair rejected predictions that the banking system is facing ruin:

“It needs to be emphasized and re-emphasized that these banks are solvent, they’re well capitalized, overwhelmingly.”

“At the end of the 3rd quarter [2008], 98% of all banks are well capitalized, representing 99% of all assets.”

Flash-forward: As of today, 122 banks have been listed on the FDIC’s Failed Bank List since the date of Ms. Bair’s CNBC interview. There are roughly 8099 commercial banks operating in the United States, which means that thus far, 1.5% of all banks have failed. If we were to stop counting today, and say the crisis is over, 98.5% of banks out of the original 8099 since Ms. Bair’s interview, would be considered well capitalized. But, today is Bank Failure Friday, so it is almost assured that more banks will be going down tonight. If we lose just 40 more banks, we will hit Ms. Bair’s 98%. Given these numbers, does anyone really believe that 98% of all banks are well capitalized? Considering the fact that 552 banks are now on the FDIC’s problem list as of the end of September 2009, it doesn’t take an economist to figure out that 98% of banks are not well capitalized. We will experience an acceleration in bank shutdowns from going forward, especially if the coming wave 2 meltdown of residential real estate and the soon-to-be mainstream commercial real estate crisis is taken into account.

Why does this whole “we predict everything is going to be ok” situation seem so oddly familiar?

Oh yes, that’s right. It was our President and Federal Reserve Chairmen who said we would not exceed 8% unemployment because of the stimulus and bailouts, and all of a sudden, as of this month, the official unemployment rate is at 10.2%, and unofficially at around 22%.

Does it seems like our elected and appointed leaders are lying to us? Or are they so incompetent that they did not see any of this coming. Whether it is the former or the latter, they are obviously not fit for the job.

We’ve said it before, and we’ll say it again. If you are expecting the crisis to end because someone in the White House, Congress, Treasury or The Fed says it is going to end, then you are setting yourself up for a fall. The system is not well capitalized, the housing market is not recovering, and the money in your bank is not safe. There is another wave coming, and even the mainstream has begun talking about a double-dip recession. In our opinion, this is not a double-dip, it is simply the next leg down in the Greatest Depression.

By Mac Slavo

http://www.shtfplan.com/

Mac Slavo is a small business owner and independent investor focusing on global strategies to protect, preserve and increase wealth during times of economic distress and uncertainty. To read our commentary, news reports and strategies, please visit www.SHTFplan.com

© 2009 Copyright Mac Slavo - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules