Busted: Bankers and The Global Economy

August 4, 2008

U.S.: What Banking Fraud Means to Depositors

There have been a number of bank failures and the recent accumulation is increasing in pace. The FDIC sees many bank failures down the road. If you are uncertain why banks should fail, you are at the right place. “Busted: Bankers” highlights corruption and fraud in the global banking industry without the restrictions of mainstream media and politics.

The public word is that regulators are bracing for 100-200 bank failures over the next 12-24 months. If the FDIC is anywhere near right, the United States has what could be considered to be an alarming increase in the number of U.S. commercial bank failures. This debacle, despite props from the Federal Reserve, has been caused by creative banking instruments and outright fraudulent activities in the name of profits for bankers and investors. The resulting contraction of the housing market and credit squeeze on a global basis are of their making, a hefty portion at taxpayer expense.

FDIC insurance is the ultimate standard for protecting the assets of banking depositors in the United States. The FDIC has raised their mandatory banking insurance rates to cover the expected expense of bailout. The government claims that the FDIC has ample resources. While this reality is debatable if several shoes drop at once, the U.S. federal government backs the FDIC. Deposits that meet requirements under the $100,000 account limit are fully protected, as good as the government that backs them.

How do you protect your money and keep that money in a safe bank? To begin, always look for the FDIC logo at your bank branch. If you are using online services or a bank, look for the logo as well. However, don’t assume that the FDIC label is accurate in the name of safety and healthy skepticism.

Simply go to the fdic.gov and locate “bank find“. In this way, you can be certain that the bank that you selected is FDIC insured. The FDIC also has a list of bank rating agencies on its Web site that can evaluate the financial stability of a bank. To get a free evaluation, check out bankrate.com, remembering where your loyalty lies. Banking information is generally set up to secure confidence. The information you are given is designed to that end. However, regardless of bank strength, FDIC insurance will secure compliant deposits. That is what you really need to know about.

As an individual, personal deposits are insured up to $100,000 in an FDIC-insured institution, including savings, checking, certificates of deposit and money market accounts. This assumes that your accounts are non-brokered. When you register with the bank directly, make sure that your deposits are non-brokered and will reside with the institution instead of being handled by a third-party. This will ensure your financial safety.

While banking fraud has meant plenty as far as creating a troubled economy, as a depositor, you are fully protected with FDIC insurance. The protection is as good as the government protection that is trusted in, which in essence, comes straight out of taxpayer pockets. Bank runs and panic aren’t a necessary part of your reactions.

In the meantime, investing and spending with a certain amount of prudence is importance. If you are involved in large financial transactions, plan ahead without waiting until the last moment. Some depositors with IndyMac put off dealing with large transactions until the last moment, putting a financial kink in meeting their obligations. The problems could have been prevented by securing a cashier’s check a few days ahead instead of at the last minute. A good rule of thumb is to avoid putting off anything that you can do today, especially where your financial life is concerned. ~ E. Manning

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July 22, 2008

Batten the Hatches, Reverse Course on Inflation

The Federal Reserve is unhappy. Inflation is not on course. Prices are not stable. Charles Plosser, president of the Philadelphia Fed, expects the Federal Reserve to take action before any signs of recovery are seen. While this may seem to be news, the Fed has already expected this turn of events in their policy.

The Fed’s is concerned that (more…)

July 21, 2008

FDIC: Let the Innocent Cast the First Stone

Back in 2001, FDIC employees supervising day-to-day operations of failed bank Superior FSB funded more more than $550 million in subprime loans. According to a recent lawsuit by Beal Bank, who eventually purchased Superior FSB, a significant portion of 5,315 subprime mortgages are non-performing. The FDIC has even bought back 247 of the original loans, priming the pump for their blame. The problem is that the FDIC made the decision to continue to operate the failed bank under the banking monikker, churning out an additional 6,700 subprime loans.

Based on the FDIC’s own report, at least 19% of the loans are fully fraudulent or “contained significant (more…)

July 17, 2008

IndyMac, FDIC Guarantees and Brokered Deposits

The FBI has been on the trail of the subprime mortgage debacle since February of 2007, whether you have heard about that truth or not. They have been ferreting behind the scenes to find the fraud that has tainted the lives of Americans and the global economy. IndyMac is the latest big chunk of fraud that is under investigation, even as the bank folded last week. The FBI is currently examining 21 corporate targets for fraud, IndyMac being one of them. Otherwise, the FBI and the FDIC are keeping details hushed.

Surely, you know the game by now. Denials of trouble are ALWAYS (more…)

July 15, 2008

Lending Crisis and Fingers of Blame

It is true that very few people actually want to be responsible in the public eye for scandal of any kind. The lending and mortgage crisis that started in the U.S.A. is one more example. Considering that a man or woman in America is supposed to be innocent until proven guilty, you’d never know it to hear the mood in good old U.S.A. Finger pointing is all the rage, trial by public accusation.

Charles Schumer, a ranking member of the Senate Banking Committee, recently penned a letter which created a panic sensation for the bank and the FDIC. IndyMac was focus of a June 26 letter announcing Schumer’s concern about financial deterioration at the bank that was formerly a hingepin for Countrywide Mortgage in the mortgage market. Schumer claims that his letter was old news. That depends who you ask.

The FDIC was inflamed by leaked news that stirred panic overtones. The Office of Thrift Management immediately began fuming. They admitted that the bank was in distress, but (more…)

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