FDIC screws community banks

fdiclogoThe Federal Deposit Insurance Corporation (FDIC), the very organization created to guarantee deposits against bank runs and failures, is instead about to guarantee that their services are in greater demand. They’re doing this by requiring all banks, large and small, to pay a one time charge of 20 cents per $100 of deposits (aka 20 “basis points”). In the process, this unbudgeted expense will likely cause some otherwise stable and profitable smaller banks to fail while larger banks, with the assistance of federal TARP funds, will likely be able to survive. Continue reading

How 'bout that multi-million percentage ROI?

“Psssst. Hey, you. Yeah, you, over there with the really fat checkbook.

“Wanna make some serious money real fast — and legal? Yeah, really — legally.

“All you gotta do is give me about $114 million. That’s all — and I’ll give you an ROI of 258,449 percent. Yep. You heard right — 258,449 percent. You’ll make $295.2 billion.

“That work for you?”
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Rove lies: Fannie, Freddie caused housing bubble

Karl Rove today wrote in the Wall Street Journal that “Mythmaking is in full swing as the Bush administration prepares to leave town.” He claims that the Bush Administration tried to rein in Fannie Mae and Freddie Mac and that these two government sponsored enterprises were responsible for the housing bubble. Further, Rove says “[t]he housing meltdown is largely a story of greed and irresponsibility made possible by government privilege.” He’s right, but almost everything you need to know about who’s making myths here and who was the benefit of government privilege can be said with two numbers:

Fannie/Freddie Bailout Amount TARP Bailout Amount1
$200 billion
$700 billion
1Troubled Asset Relief Program, the bailout program for all the other financial bodies who supported the bubble.

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