Yes, I am aware of FDIC and SIPC protection – I am also aware that both of these programs are horribly underfunded – they operate under the principle that only a few percent of the total amount of investors will ever need to be bailed out at the same time – in a widespread meltdown both of these programs would be overwhelmed and would likely start issuing certificates with maturity dates sometime in the future (sorry your bank lost your $250K – here’s a cert that matures in 2015 covering your full loss) – anyone needing cash today for one of these certs would probably be able to get 60-70% of face value
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If you got the part above so obviously wrong, then I must cast suspicion on the rest of your post(s) as well. If the FDIC and/or SIPC run out of funds, they will borrow enough funds from the Treasury to make everyone whole, just as the FDIC did during the S&L crisis. The FDIC will raise deposit insurance premiums (as they already have) on the surviving banks to pay the Treasury back and replenish the fund (just as they did during the S&L crisis). The SIPC will increase fees to their member brokerage firms to achieve the same ends as the FDIC. That you don’t know this tells me just how little you know about how the financial world works. So do you really expect anyone to take the rest of your post seriously?
