Thanks to Raymond for the link to this article. For those who are not immersed in US economics – FDIC is the Federal Deposit Insurance Corporation (pronounced “F-Dick”) – a US government agency who is in charge of insuring banks. Banks that are FDIC insured promise customers that their funds (up to a certain limit) are insured by the government should something happen to the bank. That’s supposedly a good thing.
Well things have been happening to banks recently and they keep disappearing. Now it seems that the FDIC, who’s sole designated purpose was to insure people’s money, failed to collect the insurance premiums from most banks for a period of 10 years. So now it doesn’t have enough money to pay the people who banks have “poof” vanished. That’s supposedly a bad thing.
I especially liked this quote in the article:
“But James Chessen, chief economist of the American Bankers Association, said that it made sense at the time to stop collecting most premiums because “the fund became so large that interest income on the fund was covering the premiums for almost a decade.” There were relatively few bank failures and no projection of the current economic collapse, he said.”
In people-talk: “I’ve been paying my home insurance for years without making any claims and I don’t expect any burglars or natural disasters to hit anytime soon … so I’ll just stop paying my insurance premium, but if something happens my insurance company can use all that money I paid over the year (which they really don’t need!) to pay me. I would feel better knowing that (a) the nincompoop that said this is no longer the Chief Economist of the American Bankers Association and (b) the journalist that quoted him would add an indication of his nincompoopness.
But then I read this:
Last October, to help restore confidence during the financial meltdown, Congress and then-President Bush agreed to raise the insured amount from $100,000 to $250,000 per depositor until Dec. 31, 2009.
and … well … fuck it… how can you refuse a milkshake you didn’t order when an idiot hands it to you with a cherry-on-top?
A flushing toilet is the image that came to me when I read this. The flush button has been hit and the water is draining out. All the purposeless people vested in machines of money are staring into the bowl speculating when it will stop – heck, some say it already has stopped … but what is that swirling motion? But everybody knows (them purposeless folk included) that all the water is going to drain out, it will hopefully take the poop out with it and we may get a chance at a fresh start. It’s been over a hundred years since we had a fresh start – it seems about time for a new one.
“Everybody knows that the boat is leaking, Everybody knows that the captain lied”