Liberty MavenBank United Collapses – FDIC “Insurance” Getting Wiped Out
May 21st, 2009 11:59 pm | by Jake Towne | Published in Bailouts, Banking, Big Government, Commentary, Economics, Free Market, gold standard, government spending, inflation, Market Regulation, Money | 3 Responses
Last month I described the collapse of the American banking system as “Off a Cliff with No Airbags.” Are we already in mid-air?
by Jake Towne, the Champion of the Constitution
Originally published on Thursday, May 21, 2009 at http://www.nolanchart.com/article6448.html
Today BankUnited FSB became the nation’s 34th bank to fail this year. Bank failures are nothing new, but this one will cost the FDIC $4.9 Billion per the FDIC press release issued Thursday, May 21. BankUnited had assets of $12.8 Billion and deposits of $8.6 Billion.
The takeover group is led by the infamous Carlyle and Blackstone investment groups. The take-away for the average Joe Public – is this:
The FDIC started 2008 with $53 Billion in its insurance fund, and this number is now less than $11 Billion. This translates to mean that less than a quarter of every $100 you have in a bank account is now FDIC “insured.”
It does not take a genius to predict that the FDIC insurance fund will be depleted this year, and a public bank closing (or “bank holiday” – as if it were some sort of twisted vacation) is likely this year. (Photo courtesy Luc Viator)
As a reminder, the press often compares the Obama administration to FDR. FDR closed the nation’s banks in 1933 when he also outlawed gold. Immediately after, the dollar was devalued by 67%.
Speaking of gold, the gold price shot up to $950/oz after reaching a minimum of $865/oz in mid-April. Holders of gold will win the Gold War that is currently playing out in the world’s smallest major market of roughly $25 Trillion in 2008. Please try these recent articles I wrote:
- Gold and the “Average Man”
- Ron Paul’s rEVOLution Versus the “One Ring” of the Federal Reserve
- The Gold War – China and the US Treasury Market
- Silver and Gold ARE Money (PART 1/2)
- Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)
What to do? I do not wish to repeat myself, so take a look at the advice I offered last month in “Off a Cliff with No Airbags: The FED Banking System Quivers in Fright“.
In Liberty,
Jake Towne, the Champion of the Constitution
2010 Candidate for US Congress, PA-15th
[Reach the Author Here!] www.CampaignForLiberty.com
www.EndTheFED.us LibertyMaven.com
_______________________________________________________________________
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.
“Intelligence is quickness in seeing things as they are.” – George Santayana
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May 22nd, 2009 at 11:06 pm (#)
Where do you get the $11 billion number? Their website says an "unaudited" number of $19 billion.
http://www.fdic.gov/about/strategic/corporate/cfo…
The final audited number could in theory be lower that $19 billion if GAO mandates additional adjustments. Last year the GAO put out the 2007 FDIC financials in early February 2008:
http://www.gao.gov/new.items/d08416.pdf
Here we are in late May 2009 and they are not out yet. Something may be up??? Will be interesting when they come out in final audited form.
May 23rd, 2009 at 12:29 am (#)
Vern – You linked to the Q4 2008 stats. All I've done is subtract the preceding failures from it.
Actually the FDIC fund is toast. If you read the FDIC press release closely, basically what it says is Sheila Bair decided to back up the first 10.7 Billion in losses that Carlyle and Blackstone will take
Please see for my math… http://www.nolanchart.com/article6305.html
May 23rd, 2009 at 7:10 am (#)
There is likely double counting in that analysis as the FDIC already sets up a liability for the expected cost of failures that are probable (as defined under accounting standards). So just adding in failures since year end may involve counting institutions again that have already caused a hit to the FDIC fund.
I agree that the FDIC fund is toast and the audited financial statements will hopefully reveal more details.