Washington to Bailout FDIC

[preferredduck]

http://money.cnn.com/2009/03/06/news/dodd.fdic.fortune/index.htm?postversion=2009031001

we just keep spending and insuring institutions for no reason. this is an iffy scenario, but it could happen. we have already seen the largest transfer of wealth in history, and i would hate to see us all get screwed.

[BanginJimmy]

I have no issue with the fed backing the FDIC. That is simply about confidance and if people think that the FDIC can go bankrupt and their deposits are no longer insured they will definately empty their accounts. This will cause a run on banks that this country didnt even see in 1929.

[ahabion]

Very true, the Great Depression saw how that hurt the economy with everyone pulling their cash out of their accounts. It's a domino effect that if pushed, we'll be seeing another Great Depression. Definitely needs to happen so that people continue to have confidence in our banking system overall.

If not, banks will call their loans due (mortgages, private loans, secured debt, etc) and if you don't got the money to pay them... you're either foreclosed, sued, or will be Chapter 11 or 13. Let's hope that we learn from our past and not go through this same cycle.