Jan 20 2010

FDIC and Rewarding the Risky Banks. How a Safety Net Hides the Risk in Banking. When Your Bank is Failing or is Emerging from Failure Offer Good CD Rates.

There is a fascinating phenomenon that occurs in the banking system when capital is running short.  At least, this was the case before the government decided to be the ultimate financial backup for the entire banking structure of our country.  Places like Washington Mutual or Countrywide were offering stellar rates on various savings vehicles only […]

Dec 19 2009

FDIC and the Bank Failures of First Federal Bank and Imperial Capital in California. Two Banks Brought Down by Option ARMs and Commercial Real Estate.

First Federal Bank of California failed on Friday because of a heavy over indulgence on risky option ARMs.  Imperial Capital also failed on the same day because of an inability to raise capital and also mounting losses of commercial real estate loans.  These two bank failures, two of the 140 in 2009, show that the […]

Nov 28 2009

FDIC too broke to Takeover Banks? No Bank Failure Friday on Black Friday. Can 5,300 Employees Deal with $5.3 Trillion in Deposits?

The Federal Deposit Insurance Corporation (FDIC) was hammered this week when a third quarter report demonstrated that the FDIC was running in the red to the sum of $8.2 billion.  This is troubling since the FDIC protects deposits in member banks up to $250,000 and funds covered by the deposit insurance fund (DIF) are over […]