Vinny’s Blog

It has not been very long since I made a post about FDIC. Those else where outside United States if you’re wondering what is FDIC it’s called Federal Deposit Insurance Company and what it does is “ if a bank files for bankruptcy and all depositors loose their money then, this agency takes over the bank and refunds everyone’s money upto 100,000 USD.

So it’s a good thing to have FDIC on your side. Who does not want that kind of comfort ? I want my bank to be insured, just in case if it goes under, I want to know that FDIC will step in and will refund my money upto 100,000 dollars.

And look at this - FDIC has approx 50 billion dollars in it’s account. With that it guarantees approx 4.4 trillion dollars worth of deposits.

What do I make of this ? Either FDIC is very smart and every bank in US is so healthy that they don’t think there is much risk and therefore there is no need for FDIC to stack up more money. Or FDIC has overly under estimated the risks and is about to get a shocking WAKE UP CALL.

Let us see how things are with FDIC. After all this is the only insurance you have on all your deposits in a bank, on your life time savings, on your retirement plans and on your hard earned cashetc. etc.

I hope you remember my earlier post on FDIC if not please go ahead and read it, that post is sure to warm up your thinking about FDIC.

Here is the link to that FDIC post.

http://www.diwakars.com/wordpress/2008/07/friday-april-4-2008/

Now that you have read that post and understood all I had to say about FDIC.

In particular would like to draw your attention to this news article.It was mentioned in my earlier post..

Most banks are safe so is the FDIC

The IndyMac failure will take a chunk out of the fund the FDIC has to insure deposits. But bank experts aren’t worried about it running out of money.

http://money.cnn.com/2008/07/21/news/economy/fdic/index.htm?postversion=2008072104

This was published on cnn on July 21, 2008: 4:00 AM EDT. And here we are it’s not even August 21^st not even 1 month.

Remember bank experts were not worried about it (FDIC) running out of money.

And BAM ! not even 4 weeks later.

FDIC Fund Strained by Bank Failures May Lift Premiums (Update2)

Wait..waitwait a minute.What ? am I reading what I am reading ? did they not say they were NOTworried about FDIC running out of money ? and these were no ordinary people who said that.these are the ˜experts‘.

I remember very well those ˜Experts‘ ( you definitely should read my earlier post and my view on these experts http://www.diwakars.com/wordpress/2008/07/friday-april-4-2008/ )

Anyway, less than 4 weeks later.

FDIC Fund Strained by Bank Failures May Lift Premiums (Update2)

To read this article click on the link below.

http://www.bloomberg.com/apps/news?pid=20601087&sid=abahg9z7p4wU&refer=home

Please go ahead and do read this article..

If you live in US don’t worry FDIC is on your side. All banks are safe and so is FDIC. It has plenty of money (50 Billion) to guarantee every single dollar of your deposit and mine and of our neighbors and of all our friends and every other citizen of the countrya total of 4 trillion+.

[These are my view and opinions you need not agree with them. You must not make any financial decision based upon view expressed here for that you must seek professional help ]