The financial media are either corrupt or they are stupid (make that both).
By Daniel at 25 November, 2009, 7:59 pm
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Take for instance the news coming out of the FDIC that they now have a negative $8.2B short fall. Hello George Bailey! Where are the red flags? Why isn’t the media saying “hey loyal followers, you should get your money out of the bank before the people who don’t read the newspapers do”, but instead they are saying, “no big deal, the FDIC has a $500B open line with the Treasury so you can go back to sleep”.
Of course, the US Treasury doesn’t have $500B and would have to go to the US Congress for approval to create it out of thin air…but that’s for another discussion. What I want to know is why isn’t the media jumping up and down on this one? All they have to do to portray the real picture is to put a few articles together that appeared yesterday. Watch what happens….
First the bombshell that the FDIC is in the red…
“The U.S. government insurance fund used to safeguard bank deposits dropped to a balance of negative $8.2 billion in the third quarter, the first time since 1992 that it had a negative balance, the Federal Deposit Insurance Corp said on Tuesday.”
http://www.reuters.com/article/financialsSector/idUSWEQ00360720091124
Then the IMF news that 1/2 the losses at the banks have still not been accounted for…
“Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund’s chief, Dominique Strauss-Kahn, was quoted as saying on Tuesday.”
http://www.reuters.com/article/europeanCurrencyNews/idUSGEE5AN2SO20091124
Then we have Sheila Bair, the Chairperson of the FDIC, saying that there are going to be BIG failures….
“We’ve had too many years of unfettered risk-taking, and too many years of government subsidized risk. It’s time we changed the rules of the game. It’s time we closed the book on the doctrine of too big to fail.”
http://www.fdic.gov/news/news/speeches/chairman/spnov1009.html
And finally we have the FDIC stating that the $5.0 TRILLION that they insure just went up by 10% to $5.5 TRILLION when they don’t have a penny…
“Total insured deposits increased by 10 percent ($491.5 billion), reflecting new data collected on the temporary increase in the standard maximum FDIC deposit insurance amount from $100,000 to $250,000.”
http://www.fdic.gov/news/news/press/2009/pr09212.html
SUMMARY
1) The FDIC is out of money
2) Banks still have to declare massive losses
3) FDIC says Big Banks will fail and not be bailed out
4) The FDIC increased it “insurance liability” to $5.5 Trillion
Yesterday’s headlines should have said…
“Remove all your assets from the banking system before you lose everything!”
Don’t be fooled. This could happen any day.
http://www.youtube.com/watch?v=qu2uJWSZkck&feature=related
- goldstandard
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