Razmear
08-18-2007, 02:03 AM
http://goldmoney.com/en/commentary.php
Not very encouraging news for the economy
Snip:
The problems at Countrywide Bank and its parent company, the largest mortgage lender in the US, are becoming headline news across the country as other papers pick up the story off the LA Times newswire. Responding to the growing crisis, the bank said: "It is very important to remember that Countrywide Bank is well capitalized, with FDIC-insured deposits, and is one of the largest banks in the United States, with assets over $107 billion." While that statement may be reassuring to depositors, I doubt if that was the reaction at the Federal Reserve.
First of all, the Fed's governors no doubt realize - in contrast to uninformed bank depositors - that the FDIC is just a fig leaf, and not a viable safety net. Its Deposit Insurance Fund only has $50 billion of assets, an amount that is less than half the size of Countrywide and that money is 'insuring' $4.2 trillion of deposits in 8,662 banks.
Not very encouraging news for the economy
Snip:
The problems at Countrywide Bank and its parent company, the largest mortgage lender in the US, are becoming headline news across the country as other papers pick up the story off the LA Times newswire. Responding to the growing crisis, the bank said: "It is very important to remember that Countrywide Bank is well capitalized, with FDIC-insured deposits, and is one of the largest banks in the United States, with assets over $107 billion." While that statement may be reassuring to depositors, I doubt if that was the reaction at the Federal Reserve.
First of all, the Fed's governors no doubt realize - in contrast to uninformed bank depositors - that the FDIC is just a fig leaf, and not a viable safety net. Its Deposit Insurance Fund only has $50 billion of assets, an amount that is less than half the size of Countrywide and that money is 'insuring' $4.2 trillion of deposits in 8,662 banks.