So much for the FDIC

Got Sealy?

FDIC’s Bair Says Insurance Fund Could Be Insolvent This Year

An actual Bank of Sealy (thimk about it - go on, click it!)

The Actual Bank of Sealy (Thimk about it)March 4 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Sheila Bair said the deposit insurance fund could dry up amid a surge in bank failures.

“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative.”

“Banks, not taxpayers, are expected to fund the system,” Bair said

[BB]

Yeah right. Remember that children’s game called telephone? How about hot potato? Hide and seek? Kick the can?

Can I get an adult in here please?

The only thing backstopping depositors is taxpayers, Sheila. Typical Washington blindness, forgetting where your funding originates. As if the government is a discrete entity, instead of  a wealth redistribution mechanism (with high overhead) considering they don’t even bother with even the pretense of good governance anymore.

SheBair, the time to raise fees has passed. The vig you charge banks for ‘oversight’ (insert Hah! here) has been woefully inadequate for years. A period of time during which many prudent people saw this disaster coming. So, no soup for you.

A single big bank collapsing (C, BAC, WFC) would wipe out the FDIC overnight. The rest of us are shit outa luck.

Remember folks- those first through the door usually are the ones who get to keep most of their money.

It’ll be be down to Turbo Timmeh to sell more bonds to raise the necessary capital to pay the punters their deposits back. But then he’ll have his own problems like finding some poor douchebag sucker SWF to double down (i.e throw good money after bad) and buy more friggin’ Treasuries.

Yessss, thass right, borrowing from the future to buy a hamburger today.

Have a nice day!

…

***UPDATE***

Jimmy Cayne calls Sheithner a clerk and questions his sexuality (not that there’s anything wrong with that). [Dealbreaker]

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More and more these days it is looking like guarantees most folks have counted on probably are not worth much more than the paper they are printed on.