Friday, August 01, 2008

Don't Worry! The FDIC Has Got It Covered.

Another small bank, this one in Florida, was announced to be dissolved by the FDIC. Once again, they waited until Friday, after the stock markets closed, to make the news public. This is a small bank, with assets of a little more than a quarter billion dollars. The FDIC was able to sell off about sixty million of assets. It is left holding 200 million in questionable assets that are not currently marketable. It will make good most of the deposits.

This is better than I thought. Last week there were two banks and a much greater loss involved. I thought there might be several this Friday and a much bigger drain on the FDIC's pool of reserves.

Even at this reduced rate of failure, the FDIC's money will not last long. It's OK though, the printing presses at the Treasury stand ready to take up the slack. What deficit? Wood pulp, linen, green ink, we got plenty of money!

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