Instant Depression

Just when you think it's gotten about as bad as it can get ...

The Federal Deposit Insurance Corporation (FDIC), the folks that ensure you can get your money out of the bank when you need it, have just told US banks that it needs to raise the fees they pay for the coverage or else the fund will become insolvent.  Seems the brilliant idea of raising the protection limit for individual accounts from $100,000 to $250,000 turned out to be something of a miscalculation, leading to a more rapid drawing down of the fund than expected as banks have failed.

To you and me all this means our savings would be at risk should the fund be exhausted and our banks fail.  Instant Depression.

Odd thing is, why isn't this being dealt with in the gigantic stimulus package just approved?  Surely you could fit another $22 billion or so into that massive bill?

And why is this particular dirty laundry being announced publicly by the FDIC?  Is this a case of too many threads for Obama's crew to tie? Entrenched bureaucracy trying to get attention from the new boss? 

It doesn't make sense to burden the banks further just as we are adding to the bailout funds, and it surely makes no sense to shout this from the media mountaintops, unless some brinksmanship politicking is being played out, and the exposure and resultant citizen terror is a key tool.

Perhaps this is just a routine government misstep that will be quickly smoothed over? Let's hope so, or else, with Citi dropping below a buck in stock value and other banks getting close to the precipice, depositors (that's us) will be very uncomfortable letting our money stay put without confidence in FDIC protection.