Remember that scene at the beginning of It’s a Wonderful Life, where people are all desperately trying to get into the bank because if it fails before they get in, they lose their money? That’s what the FDIC prevents.
This post uses a gift link which may have a view count limit. If it runs out, there is an archived copy of the article available
This will isolate american banks on the long run. Who wants to make business with Leeman Brothers 2.0 (on an international scale)… or did I miss something?
Edit: Spelling
MAGAts talk about Trump Derangement Syndrome but “conservatives” are still trying to destroy everything FDR helped create. That’s how far the FDIC goes back. This is why they want to do away with physical cash. Can’t have a run on a bank if your electronic money just suddenly disappears.
Its the setup to the biggest robbery in history!
Yes, they take the very, very, very long view at destroying anything and everything that they think is costing them one red cent.
The qons hold derangement syndrome towards a great many things going back decades…
How does this relate, if at all, with the insurance that the NCUA provides?
So they want us to buy crypto? If no bank and not enough cash to go around, digital money has to go somewhere right? Buy commodities? Cans of food/medical supplies to sell during the inevitable depression?
How does this spin to customers?
Okay, my checking account is no longer guaranteed in the event of your inevitable ambition-related collapse. Are you going to pay me speculative-investment class interest rates to justify me trusting you with the money? Or should I just go back to notes under the mattress?
Trump, probably, after talking to his new bestest advisor:
Just move all your money into Dogecoin. It will be perfectly safe there.
It’s easy to fight inflation in 2025.
Gold, guns and moonshine.
Calling it now.
2026 with the economy in free fall and the Republicans about to be voted out of office, he will make his move to fully seize control and declare martial law to stop elections.
The moves they are talking about will absolutely destroy the economy and plunge us into the abyss.
2026 with the economy in free fall and the Republicans about to be voted out of office
That won’t stop the Y’all Qaeda dumb fucks from doubling down and voting in a republican super majority in the house and senate.
I guess the positive is that if the economy is that fucked they might not have the money to resist the guillotine crazed hordes. Personally I think an ill measured rope would be the best method
Man I beat you to that by at least a month.
I’m looking at the positive side of societal collapse. If there are no banks, then I don’t have to pay my mortgage.
Don’t worry, someone will buy that debt from the bank. You’ll still get to pay.
or another financial crash/bailout in 5-10 years
I don’t care anymore, let it crumble.
I understand the sentiment, but believe me: with a crumble of that scale, you will definitely start caring.
Remember that scene at the beginning of It’s a Wonderful Life, where people are all desperately trying to get into the bank because if it fails before they get in, they lose their money? That’s what the FDIC prevents.
Yeah. FDIC insurance is the only reason each of us will be left with up to
100k250k per bank account, if our banks go under. And most of us have less than 100k in savings, so it’s basically the US government sayingDon’t worry, even if shit hits the fan, you will still have your money.
I can’t even be bothered to hear how his minions are going to defend this one. It’s indefensible.
They won’t defend it. They have torn out their ear drums to criticism. They will hear no evil about the man.
It’s 100k per account per bank, IIRC
It’s also more if it’s a joint account.
You did not remember correctly. This is disclosed on every savings account with a bank that is insured by the FDIC. The limit was raised several years ago.
Sounds like I remembered correctly, although my information was outdated
What backs or gurantees the FDIC?
That’s a little hard to parse, but if you’re asking “What guarantees the FDIC has the money to pay back Americans who lose their savings because of a bank collapse?”: The FDIC does. From https://www.fdic.gov/about/what-we-do:
The FDIC receives no Congressional appropriations - it is funded by premiums that banks and savings associations pay for deposit insurance coverage. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts - deposits in virtually every bank and savings association in the country.
FDIC insurance is a selling point for many retail banking products (like checking and savings accounts), so those institutions pay for the insurance so people will have confidence to bank there. More importantly, they buy it because it’s required by law currently.
If the FDIC were abolished, the void would be filled by unregulated entities that would charge higher premiums and cover less, and there would probably be kickbacks involved - while the government watches with its popcorn - to disincentivise real free market competition.
That’s if there were any kind of deposit insurance at all, I mean. The idea might be to encourage the American people to put their savings into a form they can retain control over - like precious metals, land, or digital currencies.
There’s also an implicit guarantee that the federal government would step in an make deposits good if there were a bank failure large enough to wipe out the FDIC
We still have bank failures now, Silicon Valley bank? Why eliminate it?
If you haven’t noticed elon wants to grift crypto via the government so by eliminating oversight and forcing people to run the bank, guess what kinds of assets people will dump their digital dollars into?
I’m guessing because 1) dumb ideological reasons involving cutting every government service that isn’t the military or immigration enforcement and 2) FDIC is primarily funded by fees from the banks. Consumers are so detached from how stuff works for the most part that removing the FDIC insurance fee wouldn’t give consumers higher interest rates, but just decrease the banks expenses and make them more money.
let me guess. they would not touch removed.
Please be aware folks, the FDIC only has one percent of the money needed to back up their guarantee. I repeat, that’s one percent. A single big bank failure would probably wipe out the FDIC entirely and not everybody would get their money.
Funny considering the number of bank failures that have occurred without this happening.
Small failures, yes. If a wells fargo or jpmorgan failed…
Or a Washington Mutual?
I know wamu was a big failure but i dont know much about how it was handled. I heard a lot about Lehman Brothers, but that was an investment bank. So that’s different.
If you don’t know, then just stop commenting. You are way out of your depth here.
I mean…
A single big bank failure would probably wipe out the FDIC entirely and not everybody would get their money.
So that’s false.
I have no idea just how much was insured at Washington Mutual, and I have no idea what the position of the FDIC was at the time. I literally know nothing about that era.
Probably shouldn’t be making sweeping claims then.
Not even remotely true. In the 2008 financial crisis, between 2008 and 2012 , there were nearly 500 bank failures, and more than a trillion in assets involved and the FDIC covered every cent labeled to be covered.
You shut your fucking mouth about the FDIC. They are 100% industry funded, they supported Americans through the financial crisis so none of them lost a dime from failing banks, they effectively regulate a large number of banks to remediate financial stress before it results in a loss, and they have never taken a dime of taxpayer money.
And they don’t need to hold 100% of the cash in banks, do you hear yourself with how stupid that is? They model how much cash they need from premiums to hold in reserve and they are very effective at it. Also, if losses increase they can levy a special premium on banks to shore up their liquidity position like they did in the financial crisis.
The FDIC actually has a podcast series about how they managed the financial crisis in case you want to educate your ignorant ass. I taught a whole segment in it when I taught Commercial Banking.
^^^
So Trump’s solution is to just get rid of it? Seems irresponsible.
Decisions that make no fucking sense and Trump, name a more iconic duo.
Oh, I have no opinion on the political side of the article. I’m just saying that the FDIC has 1% of what they claim to ensure. Many people are absolutely reliant on the FDIC in case their bank were to ever fail. And that’s not a particularly fantastic idea.
No, that’s actually a pretty reasonable idea. Given that they’ve never lost a cent of money, can take more from the other banks if they need to, and are ultimately backed by the people who print the money.
You don’t understand insurance or how the FDIC works.
And exactly how much do said banks have on hand to cover deposits? If there is no FDIC then banks should be required to have 100% of the required liquid cash to cover all deposits.
I agree. Banks should never lend people’s money unless those people specifically agree to have their money lent out. A bank should not be legally allowed to lend out your money and then say that you can come get your money whenever you want because it’s not true. If the bank specifically tells you that this product will lend your money out and that you cannot retrieve your money for X amount of time, that’s fine. That tells you the consumer that your money will be unavailable for this amount of time. And that makes you make the decision as to whether you can deal with that or not. If you can’t, you don’t use that product and don’t lend out the money.
On what basis? You are way out of your depth. I’m sorry, but you have no clue what you’re talking about. See my prior comment
