A heads-up for my U.S. readers

I read this and thought, if I lived in the U.S. this is something I would want to know. 

Apparently, the FDIC reserves are down and at present they only have around 10 billion dollars left.  Ninety some-odd banks have already failed.  And the losses the FDIC (that is who guarantees your bank deposits up to $250,000 per account) has taken on from those failed banks so far is running at around 25%. 

The bad news is, that according to estimates, around 1,000 U.S. banks are expected to fail.  If less than 10% of the banks expected to fail have already done so, and it’s depleted the FDIC’s reserves, just imagine what the rest of them failing is going to do to it.

And the worrisome thing to me, and I’m hoping I got it wrong, but appears to me, from reading this article, is that the FDIC at present, only has two-tenth of one cent in it’s reserves for every dollar it covers.  Yikes!  Their reserves are at a multi-year low and going fast. 

If the total of failed banks does indeed hit the 1000 level, that would make the FDIC’s dept load, around 300-400 billion dollars.  This is money they don’t have.

This is NOT good.

If you’d like to read the whole article click here.  It was on John Mauldin’s Thoughts from the Frontline.

As for what you should do about it?  I just don’t know. 

Posted by Meg Tilly on Tuesday, September 22, 2009 in Chewing the Fat