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Newest Version of Bailout Bill May Raise FDIC Insurance Limits to $250,000
The version of the bailout bill that the Senate is scheduled to vote on tomorrow raises the FDIC insurance limit from $100,000 to $250,000 for one year.
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When People Start Running on the Bank, Virtually Every Bank is an Inch from Zero
Even the banks that saw this coming months ago couldn't prepare for this.
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Looks Like Something Other than a Financial Crisis to Me
I don't invest in bank stocks and I don't think that I ever will. But, this market fall is taking my portfolio to its knees.
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Bailout Denied - Significant Consequences Likely
Our Congress has cut off their nose to spite their faces, and now a depression is imminent.
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Capitalism Will Survive - Bailout or No Bailout
It may seem like the capitalist economic model is falling apart but this is just a natural part of the ebb and flow of an economic system. It may be a painful part but that's the nature of capitalism.
Read →On Friday, the FDIC made a significant change to the way that FDIC insurance is extended on revocable trusts. The change makes it easier to add beneficiaries and simplifies the process. It also means that the FDIC has significantly expanded what it will insure.
Read →There's an interesting Bloomberg article from John M. Berry that argues that the bailout will actually generate a profit from the government. He calls it a massive carry trade. What's a carry trade? It's a trade where the cost of raising capital for an investment is lower than the return provides by the purchased assets. The difference is profit. In this case, the government is borrowing money from the public and foreign governments via Treasuries at 3-4% and purchasing assets that should yield 8-10%. Based on this, he predicts positive cash flow for the government and an overall gain. The $700 billion is invested capital, not lost money.
Read →It looks like the hammer finally fell. The Wall Street Journal and Bloomberg are reporting that the Fed has brokered a deal for JP Morgan to take over the bulk of WaMu's deposits, branches, and other operations. Of course, there is no mention of who is going to take the bad loans on WaMu's books.
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FDIC May Need $150 Billion to Pay for Rising Bank Failures
As the economic environment looks worse and worse for banks, many believe that the FDIC will need more money to continue insuring the bank deposits of failed institutions.
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Unless You Own Berkshire Hathaway, You Are not Getting Warren Buffett's Deal on Goldman Sachs
Warren is getting a hell of a deal on Goldman. You aren't if you are buying Goldman on this news at 135.
Read →Many analysts and economists think that the US bank problems and bailout are going to weaken the dollar in at least the short to medium term. The Treasury has printed 1 trillion in new dollars over the last week. Combine that with the war in Iraq, growing entitlements, etc. and you have a lot of dollar bills circulating through the world.
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Morgan Stanley and Goldman Sachs in Radical Shift to Become Bank Holding Companies
The NY Times is reporting that both Morgan Stanley and Goldman Sachs are planning to change their corporate structure and become bank holding companies. This will significantly reduce their risk and increase oversight. It will also allow them to seek customer deposit dollars to fund their business.
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Bankers Lobbying to Get Best Terms on Government Bailout
It's outrageous. The bankers, who have royally screwed up the system are now lobbying Congress hard to get the very best terms they can on the deal. It's a free county and that's there right, but Congress should realize whose money it's playing with.
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Dow Down 1000, Then Up 1000 - For the Week!
Is this the new paradigm?
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Powershares SKF is Halted
Christopher Cox, Chairman of SEC, has banned short-selling in financials until October 2. Through previous bans, investors were still able to trade the Powershares SKF, the 2x levered short financial fund. Today, however, it was halted.
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