The banks are in trouble; as everyone who can read and write knows but so are we. I mean, where do we, the average American, keep our money? And, why shouldn’t we, the banks are all insured by the federal government up to $250,000 in deposits, right? Well … ah … yeah but … see there’s a problem … the FDIC … the Federal Deposit Insurance Corporation that insures the banks is … ah … um … well, it’s bankrupt.

But … you guessed it … they’re going to get a bailout, right? Well, sort of. See, here’s their plan; they’re going to try to get the banks … you know the ones who have already been bailed out to bail out the FDIC. Yup, that’s right sports fans, the banks that are insured are going to bail out their insurer; see that way they can be insured again, as they have been for so many years, by the Federal Government.
How are they going to do that, you ask? They’re going to have the banks prepay their annual assessments that were not coming due until 2012. Before the banking crisis they had over $50 billion in the fund and they are expecting to take in about $45 billion in this prepaid plan. Since they have reported about $2 billion in income up until July 1, this will certainly wipe out any earnings they may have made this year.

There’s been over 100 bank failures so far in 2009, and the FDIC is in the worst crisis since the savings and loan debacles of two decades ago. Five months ago, officials projected $70 billion dollars in losses to the fund to rescue failed banks and just yesterday they increased that estimate to $100 billion in losses for the remainder of this year and into 2010.

The FDIC began this year, after losing $20 billion in 2008, with $30 billion-plus dollars but they now have a negative worth; thus the above needed bailouts are being proposed.

Ah … what happens, when, I mean if, ah … there is a run on the banks? Hmm, ah, well we better keep this information to ourselves then … huh? Wouldn’t want a run on the banks … I mean what would that do for this system that is … well … crumbling right before our very eyes?

May our friends respect us, trouble neglect us, angels protect us and heaven accept us.