The Back Alley Archives

Because they are on the way:

The provisions, introduced by Republican Senator Mike Crapo of Idaho, would increase the FDIC's borrowing authority to $100 billion from the current $30 billion to deal with banks and increase the NCUA's limit to $6 billion from $100 million for nonprofit credit unions.

The provisions also allow the agencies to exceed the new limits through the end of next year for up to $500 billion for the FDIC and $18 billion for the NCUA in the event of extraordinary circumstances.

http://www.reuters.com/article/politicsNews/idUSTRE52U6D020090331

From Mish:

Congress is out of its collective mind to put such a provision in a bill because "extraordinary circumstances" can mean damn well anything the FDIC wants it to mean.

So please be prepared for $500 billion in "extraordinary circumstances" as it's a near certainty those funds will be tapped.

http://globaleconomicanalysis.blogspot.com/2009/04/be-prepared-for-extraordinary.html

When you give a power to the government, it will be used one way or another, even if it is couched in conditional terms.

what's good for the goose, is good for the gander.


on a somewhat related note - my wife rosemary's the president of the schools PTO...they help raise funds for the children so that they might be able to fund events, supplies, etc for the kids that might not otherwise be covered by the state or the fed...one teacher asked for some additional funding from the PTO for busing...the teacher needed transportation for her class to get to a field trip to the museum....rosemary's organization picked up the tab for the remainder of the cost that was not covered by the school...totalled a lil over 100 bucks...everyone thought it was a great use of funds...now ALL the teachers are coming out of the woodworks (even some who are not part of the PTO) and asking for funding

what's good for the goose, is good for the gander.

Oh, I don't doubt that it's a good thing the FDIC is about to get a huge increase in their credit line. One big bank goes down and the entire FDIC fund would be gone...good thing they have more backup now.

Just posting this as a warning during the current lull/bear market rally...don't want folks to get too complacent. Big risks are still out there even if folks are starting to talk about the light at the end of the tunnel.