And you thought we had problems with FSCS questions...

Paul_Herring

Seems people over in the US are merrily speculating about their own version of it: http://www.snopes.com/business/bank/fdic.asp

Lokolo

Yes but they're americans.... Do you really expect much better?

SouthCoast

IMO the FSCS was never designed to cope with a UK bank failure.

Bank failures in the USA are relatively common and the FDIC reflects this.

edwinac_2

Paul_Herring wrote: »

Seems people over in the US are merrily speculating about their own version of it: http://www.snopes.com/business/bank/fdic.asp

What value is Snopes though? It is essentially just a disinformation operation.

Snopes is used to push the stuffing back into the Official Version of Events. It is a crude propaganda tool. It is used to confuse people who are waking up to the reality that the System is full of conspiracies and corrupt to the core.

Whenever there is an allegation of top-level wrongdoing, Snopes is always there, smoothing over the cracks. That is its raison d'etre - to suppress the truth.

Snopes is notorious for its gratuitous use of "straw men" arguments. The "straw man" is a classic propaganda weapon. Straw men are ludicrous false claims which can easily be demolished or discredited.

Through the use of straw men, Snope is able to feign authority, allowing it to posture on the intellectual high ground - while deliberately avoiding the broader picture...

Furthermore, Snopes always sets the terms of the argument... In this case, it sets itself the challenge of answering the absurd claim that...

"the FDIC could take up to 99 years to pay depositors"

Naturally, Snopes weighs in with the authoritative reassurance that this is "completely false".

Sure, but why is Snopes avoiding the more pressing question that even the mainstream media has been mooting lately?.....

"Does the FDIC have sufficient reserves to pay out on the failure of one very large bank or on several smaller banks that fail at the same time?

In answer to that, the experts say no, definitely not, don't rely on FDIC to insure your savings..

But Snopes, true to form, simply avoids that substantive question altogether.

turbobob

Snopes is a good source of info relating to urban legends. So I would be inclined to believe them if they say that there is no evidence of hypodermic needles being strategically placed in public toilets with the note " welcome to the world of AIDS" attached to them. But I wouldn't be inclined to rely on them for anything relating to financial matters

Paul_Herring

edwinac wrote: »

What value is Snopes though? It is essentially just a disinformation operation.

<snip rest of off-topic stuff, with largely nothing to do with savings what so ever>

You mean that article is wrong and it does take the FDIC 99 years to repay? Oh noes!!!

If you'd like to take your Snopes-bashing agenda else-thread please, TYVM.

I posted the link as some light hearted relief from all the usual FSCS questions we get on here, then you come on and take it totally off-topic and hijack the thread.

Money Savers Arms is over there

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>

Please feel free to complain about Snopes there.

edwinac_2

I didn't realise this is YOUR thread, Paul! Silly me for thinking this was a public forum! I linked to a lengthy Bloomberg article on FDIC. How is that "totally off-topic"? Did you even read it? Below are a few excerpts from Bloomberg. Any comments?.....

By the end of 2009, about 100 U.S. banks with collective assets of more than $800 billion will fail, predicts Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based firm that sells its analysis of FDIC data to investors.

``It's not going to be Armageddon,'' says Mark Vaughan, a financial economist at the Federal Reserve Bank of Richmond, Virginia and a senior lecturer in economics at Washington University in St. Louis. ``But it's going to be bad.''

FDIC's Secret List

The FDIC knows which banks are at risk; it has a watch list with 117 institutions. The agency won't disclose their names because doing so could cause depositors to panic and pull out all of their funds.

It won't take many more failures before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue by lending money to the FDIC.

Regardless of who wins control of the White House and Congress in November, no politician is likely to vote in favor of leaving federally insured depositors out in the cold.

A taxpayer bailout of the FDIC would come on the heels of intervention by the U.S. Treasury Department and Federal Reserve to save investment bank Bear Stearns Cos., mortgage giants Fannie Mae and Freddie Mac and the world's largest insurer, American International Group Inc.

Uninsured Deposits

Emergency federal lending to the FDIC could swell the cost of government rescues of failed financial institutions to more than $400 billion -- not including the $700 billion general Wall Street bailout now under discussion in Congress. Under federal statute, the FDIC must pay back any loans from the Treasury.

That number would be even higher if the government were on the hook for uninsured deposits -- which amount to $2.6 trillion, 37 percent of the total of $7 trillion held in the U.S. branches of all FDIC member banks....

FDIC May Need $150 Billion Bailout as More Banks Fail (Bloomberg.com)