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  • April 7, 2009 at 6:15 PM #15442
    TheBreeze
    Participant

    An excellent article over at Zero Hedge that shows us all how screwed we really are:

    As more data emerges, Zero Hedge believe the real risk to the Bailout program is in fact the liability side of the balance sheet. The bottom line is that every dollar printed by the Treasury directly goes to fund (and dilute) a dollar in deposits, bypassing M1-M3. If the $8 trillion pool in total deposits realizes that it is supported by assets which even the government is saying are worth fractions on the dollar, the risk of a wholesale systemic bank run becomes unstoppable even with all the government backstops in place, as the latter will be contingent on continued willing recipients of those rapidly devaluing pieces of paper known as U.S. Treasuries and once that assumption is questioned or outright proven false, all bets are off.

    http://zerohedge.blogspot.com/2009/04/bail-out-for-dummies-part-1.html

    April 7, 2009 at 6:36 PM #377663
    jpinpb
    Participant

    I’m a dummy, so I want to understand. How can the banks collapse if the government – I mean taxpayers – will continue to pour money in the black hole (and hearts) of the banks?

    Seems like there’s no end to how much the government (taxpayers) will give. It’s not a flesh wound. The patient is bleeding to death, but they keep pumping blood into it. The monster is not dying as long as the blood (money) keeps flowing.

    April 7, 2009 at 6:36 PM #377941
    jpinpb
    Participant

    I’m a dummy, so I want to understand. How can the banks collapse if the government – I mean taxpayers – will continue to pour money in the black hole (and hearts) of the banks?

    Seems like there’s no end to how much the government (taxpayers) will give. It’s not a flesh wound. The patient is bleeding to death, but they keep pumping blood into it. The monster is not dying as long as the blood (money) keeps flowing.

    April 7, 2009 at 6:36 PM #378120
    jpinpb
    Participant

    I’m a dummy, so I want to understand. How can the banks collapse if the government – I mean taxpayers – will continue to pour money in the black hole (and hearts) of the banks?

    Seems like there’s no end to how much the government (taxpayers) will give. It’s not a flesh wound. The patient is bleeding to death, but they keep pumping blood into it. The monster is not dying as long as the blood (money) keeps flowing.

    April 7, 2009 at 6:36 PM #378162
    jpinpb
    Participant

    I’m a dummy, so I want to understand. How can the banks collapse if the government – I mean taxpayers – will continue to pour money in the black hole (and hearts) of the banks?

    Seems like there’s no end to how much the government (taxpayers) will give. It’s not a flesh wound. The patient is bleeding to death, but they keep pumping blood into it. The monster is not dying as long as the blood (money) keeps flowing.

    April 7, 2009 at 6:36 PM #378287
    jpinpb
    Participant

    I’m a dummy, so I want to understand. How can the banks collapse if the government – I mean taxpayers – will continue to pour money in the black hole (and hearts) of the banks?

    Seems like there’s no end to how much the government (taxpayers) will give. It’s not a flesh wound. The patient is bleeding to death, but they keep pumping blood into it. The monster is not dying as long as the blood (money) keeps flowing.

    April 7, 2009 at 6:42 PM #377668
    TheBreeze
    Participant

    I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).

    April 7, 2009 at 6:42 PM #377946
    TheBreeze
    Participant

    I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).

    April 7, 2009 at 6:42 PM #378125
    TheBreeze
    Participant

    I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).

    April 7, 2009 at 6:42 PM #378167
    TheBreeze
    Participant

    I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).

    April 7, 2009 at 6:42 PM #378291
    TheBreeze
    Participant

    I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).

    April 7, 2009 at 7:00 PM #377678
    davelj
    Participant

    [quote=TheBreeze]I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).[/quote]

    Wrong. The $8 trillion represents ALL deposits in the domestic banking system. All DDA accounts now have unlimited coverage. And through CDARs, anyone (individuals or businesses) can get up to $50 million in time deposits fully covered by the FDIC. Uninsured deposits are a pretty small portion of the total at this point. (Prior to the crisis they were about 30% of the total.) Anyone that has uninsured deposits at this point isn’t paying attention.

    Now, the real question is how you can have the temerity to post such an article without even understanding what the author is trying to convey. I just don’t get it. Bizarre.

    April 7, 2009 at 7:00 PM #377956
    davelj
    Participant

    [quote=TheBreeze]I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).[/quote]

    Wrong. The $8 trillion represents ALL deposits in the domestic banking system. All DDA accounts now have unlimited coverage. And through CDARs, anyone (individuals or businesses) can get up to $50 million in time deposits fully covered by the FDIC. Uninsured deposits are a pretty small portion of the total at this point. (Prior to the crisis they were about 30% of the total.) Anyone that has uninsured deposits at this point isn’t paying attention.

    Now, the real question is how you can have the temerity to post such an article without even understanding what the author is trying to convey. I just don’t get it. Bizarre.

    April 7, 2009 at 7:00 PM #378135
    davelj
    Participant

    [quote=TheBreeze]I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).[/quote]

    Wrong. The $8 trillion represents ALL deposits in the domestic banking system. All DDA accounts now have unlimited coverage. And through CDARs, anyone (individuals or businesses) can get up to $50 million in time deposits fully covered by the FDIC. Uninsured deposits are a pretty small portion of the total at this point. (Prior to the crisis they were about 30% of the total.) Anyone that has uninsured deposits at this point isn’t paying attention.

    Now, the real question is how you can have the temerity to post such an article without even understanding what the author is trying to convey. I just don’t get it. Bizarre.

    April 7, 2009 at 7:00 PM #378176
    davelj
    Participant

    [quote=TheBreeze]I believe he’s talking about deposits above the FDIC limits (which I think are currently $250K?).[/quote]

    Wrong. The $8 trillion represents ALL deposits in the domestic banking system. All DDA accounts now have unlimited coverage. And through CDARs, anyone (individuals or businesses) can get up to $50 million in time deposits fully covered by the FDIC. Uninsured deposits are a pretty small portion of the total at this point. (Prior to the crisis they were about 30% of the total.) Anyone that has uninsured deposits at this point isn’t paying attention.

    Now, the real question is how you can have the temerity to post such an article without even understanding what the author is trying to convey. I just don’t get it. Bizarre.

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