Monday, March 3, 2008

Dominoes Doing What Dominoes Do

The Federal Deposit Insurance Corporation (FDIC), the government entity created by Congress during the Great Depression to insure bank deposits, expects a busy year in 2008. The FDIC keeps a list of banks at high risk of failure. If necessary, it will take a troubled bank into receivership to protect depositors.

The FDIC is looking for more staff, viz. no-nonsense individuals with, shall we say, a certain skill set. These are guys who arrive for work at a target location at closing time on a Friday afternoon, freeze a bank's assets, and re-open on Monday morning prepared to babysit nervous customers. If you have no more than $100,000 with an insured bank, you're fine. Otherwise, you need to be very careful about where you park all your hard-earned dough.

The FDIC's "help wanted" ads bode ill for the coming year. There were three bank failures in 2007, and before that none since 2004. Fed Chairman Ben Bernanke warned last week that 2008 will be different.
The ultimate sell signal: Part II - MarketWatch

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