Calculated Risk Points To A Large Problem With Our Bank Accounts.
The Federal Deposit Insurance Corporation (FDIC) treasure chest is empty. And why is it empty? Because the FDIC decided not to collect insurance premiums from its membership of banks from 1996 to 2006. After reading this on Calculated Risk, pointing to the Boston.com story, I put on the Best of Boccherini so that I can enjoy this folly with lush baroque music. These are adults at the FDIC, and the Congress is full of adult appetites. Starting from the second Clinton administration, with Larry Summers (now the sorcerer's apprentice) as Treasury Secretary, Bob Rubin as the genius of Citigroup as Sandy Weil's best idea, and Tim Geithner (now the sorcerer's apprentice's sorcerer) at Larry Summer's side, with the usual suspects in both the Republican and Democratic parties chairing the various banking or finance committees, (Chuck Grassley, Phil Gramm, Paul Sarbanes, Chris Dodd, Chuck Schumer, Barney Frank), no one thought to collect the fees for a rainy day. Times were too good. Who needed to plan for bad times? (You would not believe this unless it had actually happened.) Now FDIC Professor and Chair Sheila Bair needs emergency funds because the bank failures so far, with giants such as IndyMac already gone, and with the threat of Behemoths such as Citigroup and Bank of America possible deaths, have drained the $52 billion in a wink. The quotes about the deeply comic stupidity of Treasury, Congress and the bankers themselves are staggering:
"That is how we find ourselves where we are today," said Bair. "An important lesson going forward is we need to be building up these funds in good times so you can draw down upon them in bad times."
Cornelius Hurley, (director of the Boston University law school's Morin Center for Banking and Financial ) agreed with Bair's analysis of the FDIC's dilemma. "Typically you would build up a reserve during the halcyon days to protect yourselves during a recession," he said, calling the decision to stop collecting most premiums "a political one" that was pushed by banks and not based on strict accounting principles.
How hard can we laugh at this and still find coffee money in the morning? These are the geniuses who claim they have insured our deposits up the $250,000 each. The FDIC is bust. It didn't collect for ten years. The banks that are gone never paid their fees and are now draining the pool. And the same crew that crashed the airplane is now claiming it can take off again even though it is out of fuel, and they forgot to lay in a supply.
Who Is Stupid?
At what point -- and we may already be passed it -- do we give up castigating the Congress and the White Houses (Clinton, Bush) and accept that we get the kind of government we deserve? These men and women are vain, blind, goofy, drunk on status, herd-like, lazy and without common sense. It's raining. The roof is leaking. There is no heat. We are out of food and coffee. Trees grow to heaven. I will live forever. It can't happen here. The FDIC is fiction. The enemy he is us. The enemy he is us. And do not miss the comments on Calculated Risk: everyone is staggering either to the Tylenol or to Tijuana.
So, in light of this, am I still a bad citizen for having my safe full and my bank accounts empty?
And for their next trick, these same or similar DC geniuses will henceforth provide us with our health care, continue educating our children, invent totally new sources of "green energy," prop up unqualified or predatory borrowers, and "create or save (whatever that means) millions of jobs." So they promise, but based on their banking and finance track record they will actually deliver a nation that: suffers unnecessarily from bureaucratically rationed medical treatments; produces increasingly dumbed-down graduates; stagnates under artficially sky-high energy prices; perpetuates a ruined housing market; and has a helluva time finding a decent job. THIS is the change, unfortunately, that we must now believe in.
Wise men tell us that there is no future; there is no past - that both are encapsulated within the present moment. The jury is still out as to whether or not we can do anything at all to change our destiny beyond transcending this moment.
During the dry season, when the water in the lake evaporates and past crimes are exposed - license plates, steak knives and the bones of the murdered – the people tend to rise up and demand justice (as they should). As our political class scrambles to seal off the site with yellow tape and to fill in the pit with concrete and camouflage, the town’s people gather at the road blocks to watch. “Sorry, I can’t let you by,” says the sheriff. “It’s for your own good. There’s dangerous work going on down there.”
“But I’ve left my fishing pole down by that willow!” I say.
I look around at all the people who have come out to watch. Practically the whole town has turned out: the butcher; the banker; the children; the old; black; white; legal; illegal. It occurs to me that we’re all in the same boat together. We are all unemployed (or about to be). The expression on each of our faces is identical. Then I had an epiphany.
All along, we’ve been blaming this one or that for whatever happened. None of us had seen a raise in years. The only exception was the three Mexicans who qualified under stimulus to pour concrete. We’d been at each others’ throats all this time when we should have been focusing on our government; you know, the people who’ve been running the bi-weekly cock fight competition over at Chester’s barn just to keep us distracted.
“I’ve got to get my pole,” I say to no one in particular.
“I can’t let you do that,” the sheriff replies. “It’s for your own protection. Only the Mexicans know where the bodies are buried. And you can be sure of one thing, they won’t talk.”
I like the Titan pic show-
After the long way journey, which included the flybys of our outliers and the views of them as the precursors to the main event, I remember the great moments when Cassini-Huygens was approaching Saturn. As with the other projects of much deliberation, development, planning, and implementation C-H was proving to be a remarkable achievement. Flawlessly it had speared through the vacuous, always communicating, and still in perfect form, ready to perform, show its mettle, and put on a real show. Just one thing first... to set the stage for the play.
For all who had had the wisdom and faith that had brought the C-H to its target, there was little doubt. Little people with big minds, big hearts, and, yes, huge dreams guided her on a spectacular dive into the ringdom of mystery and threaded the sacred space between plane oddities and planet orb. And, in thus doing, shewed all of us little people what is possible.
Of course, we now know much about Titan and the other moons, the rings, the giant itself. One of them we touched; the others seem as though we could actually reach out and do so.
Magnificant performance!! Directors, Cast, and Technicians!!! Standing O and continued good fortune!!
We need these kind of smart people representing our interests in Washington!!
Note this story from last Sept. 25th about the likelhood that the FDIC would run short of funds and need a further infusion to stay afloat:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag2qfN5A3QeE
at the time, the FDIC denied this was the case. Hmmm.
This just adds to a growing list of Federal agencies, formed to serve and protect us, which instead, have failed us. The government programs include: FDIC (10 years of not collecting banking insurance premiums), SEC (Many years of overlooking Bernie Madoff, Allen Stanford, Fannie Mae, Freddie Mac – despite warnings given in each of these cases), FDA (Contaminated Peanuts in our food system), FEMA (Katrina), MEDICARE (Broken), SOCIAL SECURITY (How secure do you feel?), FED (Monetary policies encouraged risk taking), ED (Department of Education –how is that working for your kids?). Private enterprises would face criminal charges and lawsuits.
Check this link and you’ll be amazed and appalled at the long list of federal agencies, growing longer by the day, which were established to protect and defend the Constitution and your personal freedoms and happiness. Meet your enemy. He is U.S.
http://www.usa.gov/Agencies/Federal/All_Agencies/index.shtml
Richard of NJ:
Transportation: I35 bridge collapse, Acela brakes
Commerce: Haven't though of one yet
DEP: Supporting Global warming phobias
Energy: Data losses and refusal to make Nuclear energy a priority, BioFuel fiasco last year
Interior: extensive droughts out west, farmers still get first dibs on water
State: No Korea
Defense: Iraq
FCC: worldcom AOL
Agriculture: Jalapenos and green onions (taco bell) (relative of mine almost died) & Biofuels caused worldwide grain price increase and starvation
INS: Illegals everywhere, no enforcement
Border Patrol: No fence as Mexico Simmers to a boil
HHS: teen pregnancy explosion and Flu shot shortages
DHS: so far so good, new agencies have less bureaucracy
Have cabinet level secretaries ever resigned for these fiascoes? NEVER!
In private industry, you get called before congress and you usually lose your job, In Japan a CEO would commit suicide. In the US government, the guilty get a nice pension and free healthcare after retirement.
Every once and awhile, Pat B seems to like Yoda speak... you know,
Just kidding, I was, Pat... hah