We are slowly being desensitized about the frauds and corruption

When your job is to help supervise the banking industry and over 20 banks have already failed so far in 2009, why are you still applying the same tactics and why are you not fired yet?

“FDIC faulted in four bank failures in ‘08… The Federal Deposit Insurance Corp. fell short in correcting deficiencies at four U.S. banks before they were seized last year at a cost of almost $1 billion to the deposit insurance fund, the agency’s inspector general said.” I am shocked at the absence of reprimand as well as the little media coverage on such costly mistakes. http://news.cincinnati.com/article/20090408/BIZ/904080305/1076/BIZ

Not only that, Sheila Bair is endangering our deposits and gifting banks up to potentially $1 trillion via TLGP and PPIP. Banks want to pay back TARP because TLGP can help them raise money without congressional restrictions such as those on executive pays and bonuses.

Why is the Depositor Protecting Act of 2009 not stipulating the $500 billion must be used only to guarantee deposits and processing bank failures? Bair has said publicly she expected FDIC to finance up to $500 billion for PPIP.

As for these being borrowed funds, ask FDIC how much they collected last year and how long it would take for it to pay back $1 trillion of our tax dollar through its insurance premium collection?

Please read this before our government allows this regulator to endanger more of our deposits and savings:

http://seekingalpha.com/instablog/387205-ppy/824-time-to-power-check-fdic?source=new_post

When you have a corrupt regulator like her heading FDIC, who is the most important guardian of our hard earned savings and deposits, the system falls apart. Do a research on all her public statements and you will see she continues to make and take contradictory remarks and actions. She failed to impose stricter regulation of derivatives when she was the head of CFTC and despite what she said about not making banks too big to fail, she was the one who rejected Wachovia’s plea to stay independent (yes she was going to sell WB to make $300 billion bailout recipient Citigroup bigger) and sold Wamu to make JP Morgan BIGGER.

-FDIC has $19 billion to back over $4 trillion in deposits
-FDIC guarantees over $300 billion in bonds via TLGP; if banks default on their bonds FDIC is on hook for all that money
-FDIC expects to finance up to $500 billion for PPIP
-FDIC’s seizure of Wamu led to systemic risks worldwide including:
*just in Europe a shocking increase in deposits from “a daily average of 0.09 BILLION euros to a daily average of 169.41 BILLION” to European Central Bank that led to HUGE decreases in liquidity and lending
http://www.newyorkfed.org/research/conference/2009/cblt/interbank_market_HHH_jan09.pdf
*expedited Wachovia demise because of CDS blown out
*annihilation of bond market; that was why TLGP was launched because it became nearly impossible for banks to raise capital from selling bonds
*remember how Goldman Sachs was made whole via AIG? In the Wamu sale to JP Morgan, “The FDIC (USA) has made the claims of the counter-parties of all the swap contracts, futures contracts senior to those of the bondholders in the capital structure” http://www.dailymarkets.com/stocks/2008/09/27/washington-mutual-bond-holders-wiped-out/

Why is she not focusing on helping these people?

-Galena, Missouri, “Construction at the resort property is at a standstill and Shirato is still waiting for a first mortgage to be returned to Columbia Bank in Kansas. The FDIC put the bank in receivership in August… It took us six weeks before we could get anyone from the FDIC to talk to us.”
http://www.bransondailynews.com/story.php?storyID=10989

-Augusta, Georgia, “Loudermilk accuses FDIC representatives of everything from indifference to incompetence”
http://www.mmdnewswire.com/fdic-government-actions-4738.html
http://metrospirit.com/index.php?cat=1990310070813675&ShowArticle_ID=11011003093855846

-New York. “F.D.I.C.’s October agreement with JPMorgan Chase and Washington Mutual allows Chase to pick and choose which of the city’s 148 Washington Mutual branches it will keep. Chase will then turn over the rejects to the F.D.I.C. But here’s the kicker: According to sources, the F.D.I.C. [CAN THEN SIMPLY TERMINATE THE LEASES OF THOSE REJECTED BRANCHES, ALL CONTRACTUAL OBLIGATIONS VOIDED]…

-I am Lanlord for on of the WAMU Location I don’t know who to talk to about this Lease or how to pay my Mortgage. SOMEONE PLEASE HELP ME
-I believe we spoke with each other. WaMu moved out as of 2/10/,leaving me with an empty building and half a million loan with Chase-WaMu. FDIC legalized the cherry pick by Chase without obligations.Jamie Dimon is really a very smart banker and good bzman,but at the price of all WaMu contractors, landlords,shareholders,etc.
-I got the same situation. They stopped rent payment. I can not pay the mortgage and will lose the property.”
http://www.observer.com/2008/real-estate/it-s-washmu-landlords-fear-gaping-spaces-F-d-i-C-mulls-nuclear-option

Remember about her loan modification plan because she cares about homeowners? Well, obviously these proved otherwise.

Here is the latest lawsuit by Wamu employees (No, I don’t think these are the corrupt management but regular employees):

“Four former employees of Washington Mutual filed suit against federal regulators in Seattle, claiming they were cheated out of their severance pay… The FDIC argued the severance pay was withheld because there was no change of control of the bank… The complaint asks for a trial by jury and demands ‘all class members be awarded appropriate damages against FDIC for breach of contract.’”
http://www.upi.com/Business_News/2009/04/28/Former-WaMu-employees-sue-FDIC/UPI-43011240947568/

So there you have it. FDIC may have voided and breached landlords’ and employees’ contracts because they were against average Americans. Unlike President Obama and Secretary Geithner who must follow laws and not stop AIG from paying out bonuses, FDIC doesn’t.

Every week more potential corruption gets uncovered.

“Probe of FDIC contract urged by watchdog group”
http://washingtontimes.com/news/2009/apr/28/probe-of-fdic-contract-urged-by-watchdog-group/?page=2

Covington offered the following reasons for why the bank became short of cash so quickly…

Following reports of the bank being placed under federal restrictions, customers slowly began to remove their deposits. The April 15 tax deadline hit and customers wrote checks to the federal government, moving millions of dollars out of the bank. Because of the federal restrictions, the bank was unable to seek brokered deposits to build its cash. Plus, other banks continued to close lines of credit. “Things just kept getting worse,” Covington said. Covington said that at the time of the FDIC action he was near a deal with a hedge fund to recapitalize the bank. He said he also was close to structuring a deal to move some bad loans off the bank’s books. But it proved to be too little too late.”
http://www.jhnewsandguide.com/article.php?art_id=4521

Lets not also forget “The chairwoman of the Federal Deposit Insurance Corporation, Sheila C. Bair, said in a speech on Monday that her agency should have broader powers to take over and close a variety of financial institutions to prevent taxpayers from shouldering the losses on firms deemed too big to fail… Viable portions of the company would be put into the good bank”
http://www.nytimes.com/2009/04/28/business/economy/28fdic.html?ref=global-home

Yes, just like how Bair was going to put “viable portions of” Wachovia “into the good bank” Citigroup AND “prevent taxpayers from shouldering the losses” by her arrangement: “Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans, while the FDIC will take losses beyond that.”
http://www.marketwatch.com/news/story/citigroup-buy-wachovias-banking-operations/story.aspx?guid={58CDF657-A276-4B0A-8729-80A9F9D552A0}&dist=msr_1

Related Posts:

• FDIC’s Balance: NEGATIVE 20.9 Billion! —- (ZH)
• ALERT - FDIC is broke (-8.2B)
• Senator: FDIC’s Bair says 500 Banks Could Fail
• Reports on Possible Imminent Bank Failures
• Must-Know News - Feb. 20

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