Even the FDIC doesn’t think it’s ready for the next banking crisis

I'm not endorsing The Sovereign Man website or newsletter, but Simon Black is spot on in his assessment on the FDIC's under-fundedness.

http://www.sovereignman.com/offshore-banking-2/even-the-fdic-doesnt-think-its-ready-for-the-next-banking-crisis-16934/

In fact, I warned of the precarious nature of the FDIC in 2013 in several presentations, and how bank bail-ins are written into laws for most of the developed economies under the thumb of the corrupt BIS.  Depositors:  you have been warned.

Here was the presentation in 2013.  Note the mandate is 1.15% coverage on guaranteed deposits, a dangerously low reserve requirement.  And the FDIC doesn't even meet that low threshold.

https://docs.google.com/presentation/d/1QJbb7LeyTh0bbLMCr7wa_ZJHb36jAzis_zY0e53hFJA/edit#slide=id.p

FDIC Plots a Bank Heist Involving YOUR Accounts

https://www.moneymetals.com/news/2015/04/15/fdic-plots-a-bank-heist-involving-your-accounts-000694?utm_source=Liberty_Headlines_Is_Giving_Your_Site_Free_Traffic_for_Now&AID=7236

FDIC: Big banks' living wills not credible and need to be revised

So it looks like any bail-in of too-big-to-fail banks on the backs of depositors will occur after July 1, 2015.

http://www.cnbc.com/id/101896640

FDIC and Bank Deposits

Click on Image to Enlarge

Take Your Money Out of the Bank!

http://youtu.be/M-2eJQqXm7s

FDIC Deposit Insurance Fund Hits $33 Billion After 2009 Deficit

http://www.bloomberg.com/news/2013-04-11/fdic-deposit-insurance-fund-hits-33-billion-after-2009-deficit.html

FDIC and Bank of England: Resolving Globally Active, Systemically Important, Financial Institutions

This is a re-post and outlines England's and the US' plans for a bail-in of banks, as we have bail-out fatigue.  Instead of tax payers bailing out failing banks, depositors will be targeted.

http://www.fdic.gov/about/srac/2012/gsifi.pdf

 

Bail-out Is Out, Bail-in Is In: Time for Some Publicly Owned Banks

http://www.huffingtonpost.com/ellen-brown/bailout-is-out-bailin-is-_b_3178702.html

The FDIC Illusion of Insured Bank Deposits

So let me get this straight.  The FDIC is the federal government agency which insures deposits.  There is $25 billion in the FDIC.  Yet, there is $9.2 trillion in deposit accounts in US banks, and $300 trillion in derivatives exposure.  Got it--all is fine.


http://demonocracy.info/infographics/usa/fdic/fdic.html

Resolving Globally Active, Systemically Important, Financial Institutions Federal Deposit Insurance Corporation and the Bank of England

The $64 trillion question is who are the "unsecured creditors"?  If they are depositors over the guaranteed limits, expect corporations and individuals to park their money elsewhere.

http://www.fdic.gov/about/srac/2012/gsifi.pdf

US Deposits In Perspective: $25 Billion In Insurance, $9,283 Billion In Deposits; $297,514 Billion In Derivatives

http://www.zerohedge.com/news/2013-03-19/us-deposits-perspective-25-billion-insurance-9283-billion-deposits-297514-billion-de

The $25 billion in touted deposit insurance is supposed to preserve and protect (granted not in their entirety) some $9,283 billion in total US deposits. A far bigger problem, however, is when one considers the "asset" side of the US banks' ledger: remember deposits are unsecured liabilities. And for US banks, sadly, over the counter derivatives represent the vast majority of "off the books" assets. According to the latest OCC quarterly report, the total derivative notional outstanding of the Top 25 holding companies is $297,514 billion, or nearly $300 trillion. In other words there are 32 times more notional derivatives than there are total deposits, while the ratio of gross derivatives to deposit insurance is a concerning 11,900-to-1.

In major policy shift, scores of FDIC settlements go unannounced

http://www.latimes.com/business/la-fi-fdic-settlements-20130311,0,5882355,full.story

Regulatory Capital Rules: Standardized Approach for Risk-Weighted Assets; Market Discipline and Disclosure Requirements

Gold bugs have gotten it right all along.

http://www.fdic.gov/news/news/financial/2012/fil12027.html

A. Zero Percent Risk-Weighted ItemsThe following exposures would receive a zero percent risk weight under the proposal:

• Cash;

• Gold bullion;

• Direct and unconditional claims on the U.S. government, its central bank, or a U.S. government agency;

• Exposures unconditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency;

• Claims on certain supranational entities (such as the International Monetary Fund) and certain multilateral development banking organizations

• Claims on and exposures unconditionally guaranteed by sovereign entities that meet certain criteria (as discussed below).

For more information, please refer to sections 32(a) and 37(b)(3)(iii) of the proposal. For exposures to foreign governments and their central banks, see section L below. 

Q. Treatment of Collateralized TransactionsThe proposal allows banking organizations to recognize the risk mitigating benefits of financial collateral in risk-weighted assets, and defines financial collateral to include:

• cash on deposit at the bank or third-party custodian;

• gold;

In all cases the banking organization would be required to have a perfected, first priority interest in the financial collateral.
1. Simple approach: A banking organization may apply a risk weight to the portion of an exposure that is secured by the market value of financial collateral by using the risk weight of the collateral – subject to a risk weight floor of 20 percent. To apply the simple approach, the collateral must be subject to a collateral agreement for at least the life of the exposure; the collateral must be revalued at least every 6 months; and the collateral (other than gold) must be in the same currency.

Fix income inequality with $10 million loans for everyone!

Now that's she doesn't hold a government post anymore, former FDIC Chairwoman Sheila Bair is free to inject some snarky criticism--and boy, does she take advantage of it.

http://www.washingtonpost.com/opinions/fix-income-inequality-with-10-million-loans-for-everyone/2012/04/13/gIQATUQAFT_story.html

Joint Statement By The Fed, The FDIC, NCUA And OCC

Time to gin up the spin machine. 

http://www.zerohedge.com/news/joint-statement-fed-fdic-ncua-occ

In other words, "All is well--nothing to see here."

FDIC warns on moral hazard for money market funds

The operative word is "outgoing" FDIC Chairwoman.  The truth always comes out when they are about to leave office.

http://www.reuters.com/article/2011/05/10/funds-moneymarket-idUSWAT01510720110510

A salute to Sheila Bair, outgoing FDIC Chairwoman

http://problembanklist.com/when-the-fdic-says-not-to-worry-its-time-to-worry/

http://www.fdic.gov/consumers/consumer/news/cnfall09/safe_place.html

All FDIC insured deposits are backed by “the full faith and credit” of the United States government.    Therefore,  according to the FDIC Chairman Bair, “In short, we cannot run out of money“. - Sheila Bair, FDIC Chairwoman, Fall, 2009

http://blog.cleveland.com/business/2009/03/fdics_chairman_warns_bank_depo.html

"Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative."- Sheila Bair, FDIC Chairwoman, March, 2009

Looks like she covered all her bases.

Bair Steps Down At A Crucial Time For FDIC

One more lifeboat taken in this Titanic.


http://blogs.forbes.com/halahtouryalai/2011/05/09/bair-steps-down-at-a-crucial-time-for-fdic/

Temporary Unlimited Coverage for Noninterest-bearing Transaction Accounts

All is well.

http://www.fdic.gov/deposit/deposits/insured/temporary.html

Sheila Bair on the bond bubble

Wow--did I hear that right? Sheila Bair of the FDIC just admitted interest rates will back up eventually and there does exist a "bit of a bond bubble." I will post the video up if/when Bloomberg does.