CHART OF THE DAY: The FDIC Is Going Broke
The clusterstock headline is inaccurate. Between the bank failures over the last two months (that last datapoint is March 31) and loan guarantees, the FDIC fund is empty. Unfortunately, we won’t actually be told of this until September, when the July datapoint is made available.
In the interest of preventing panic, remember that the FDIC can borrow from the Treasury to make up any shortfalls.
What should be upsetting is that the FDIC is still planning on providing a few hundred billion dollars in loans as part of the PPIP. This is being done to avoid the appearance that the Treasury is doubling the size of the TARP program. Congress will certainly approve the money for FDIC, even though it has nothing to do with deposit guarantees and everything to do with TARP.
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jeffmiller reblogged this from crazynutjob and added:
almost all of my financial news these days. If you’re not reading his blog, you should.
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