Deposit Insurance (was greed,"slease")
james d. Del Vecchio
al...@hpdmd48.boi.hp.com (Tom von Alten) writes:
>One of the things the Harper's article brought out was that the abrupt
>change in the insurance limit for savings deposits from $40k to $100k
>(in 1980 or thereabouts) produced a great deal of cash in the form of
>"jumbo CDs", looking for a place to be invested.
One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
insured limit from $100K to $10K or less. This would still keep the masses
from worrying about their savings, and people with more $ than that are
the ones who would be willing to do their homework on banks anyway.
James Del Vecchio
Robertson James
>
>One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
>insured limit from $100K to $10K or less. This would still keep the masses
>from worrying about their savings, and people with more $ than that are
>the ones who would be willing to do their homework on banks anyway.
>
> James Del Vecchio
On this I agree with you. :-)
James A. Robertson
--
Jim Robertson, INET: jar...@warper.jhuapl.edu, jar...@aplcen.apl.jhu.edu
Johns Hopkins Univ./APL UUCP: {backbone!}mimsy!aplcen!jarober
Robert Firth
>One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
>insured limit from $100K to $10K or less.
Nice idea, but I don't think it would work. First, the limit is
per account, not per person, so the fat cats would simply open ten
times as many accounts.
Well, make the limit $10k aggregate per individual. But then, how
do you enforce that limit? The FDIC and FSLIC is currently baling
out all accounts, regardless of size (and I suspect regardless of
the legality of this procedure), for which reason the greater part
of your tax money is indeed going to fat cats rather than to struggling
widows & orphans.
Face it folks - under a political system totally dominated and
corrupted by money, the rich will always get their own way.
Kingsley Morse
>In article <1990Dec20.0...@unicorn.cc.wwu.edu> n902...@unicorn.cc.wwu.edu (james d. Del Vecchio) writes:
>>
>>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
>>insured limit from $100K to $10K or less. This would still keep the masses
>>from worrying about their savings, and people with more $ than that are
>>the ones who would be willing to do their homework on banks anyway.
>>
>
> On this I agree with you. :-)
>
> James A. Robertson
I also agree.
Kingsley Morse Jr.
Russ Anderson
How is having people dividing their $100,000 accounts into ten $10,000
accounts going to have any effect, other that maybe adding a little
accounting overhead?
--
Russ Anderson
----------------------------------------------------------------------
Disclaimer: Any statements are my own and do not reflect upon my my
employer or anyone else. (c) 1990 - All Rights Reserved
Michael L. Kaufman
>In article <1990Dec20.0...@unicorn.cc.wwu.edu> n902...@unicorn.cc.wwu.edu (james d. Del Vecchio) writes:
>>One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
>>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
>>insured limit from $100K to $10K or less.
I fail to understand how the situation would be made better if all of the banks
were to collapse. Or do you think that people with more then $10k would leave
their money in the bank?
>Face it folks - under a political system totally dominated and
>corrupted by money, the rich will always get their own way.
I know, I know. I was having lunch with Leona Helmsly, Michael Milken, and
Ivan Brodsky and we were having this exact same conversation.
Michael
Michael Kaufman | I've seen things you people wouldn't believe. Attack ships
kaufman | on fire off the shoulder of Orion. I watched C-beams glitter
@eecs.nwu.edu | in the dark near the Tannhauser gate. All those moments will
| be lost in time - like tears in rain. Time to die.
james d. Del Vecchio
JD> One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
insured limit from $100K to $10K or less. This would still keep the masses
from worrying about their savings, and people with more $ than that are
the ones who would be willing to do their homework on banks anyway.
r...@redwood26.cray.com (Russ Anderson) writes:
>How is having people dividing their $100,000 accounts into ten $10,000
>accounts going to have any effect, other that maybe adding a little
>accounting overhead?
The hassle involved. Also, remember that being above the limit does not mean
that you are uninsured, just that the additional amnount is covered by the
bank's private insurer (like %100 of deposits were covered before FDIC)
instead of the taxpayer. This would just mean that smart people with a
lot of money would shop around for sound banks, like they used to do.
If someome _wants_ to keep track of ten times as many acount numbers, and spend
ten times as much time on the phone when he moves his $ around, who cares
anyway: so lower it to $1,000 and see if he spends all day on the phone.
In neither case are "the little people" any worse off than under the current
$100K limit.
BTW, I happend to pick up a bank flier today on how to structure your family's
accounts to cover up to $1.4 mil. (I wonder how many people would go to the
trouble for $140K, or $14K, {or $14, one dollar per account :-)}
I'll post more on the flier later.
Jim Del Vecchio
~XT6561210~Rick Clark~C24~H15~6011~
>>n902...@unicorn.cc.wwu.edu (james d. Del Vecchio) writes:
>>> al...@hpdmd48.boi.hp.com (Tom von Alten) writes:
>>>One of the things the Harper's article brought out was that the abrupt
>>>change in the insurance limit for savings deposits from $40k to $100k
>>>(in 1980 or thereabouts) produced a great deal of cash in the form of
>>>"jumbo CDs", looking for a place to be invested.
>>One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
>>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
>>insured limit from $100K to $10K or less. This would still keep the masses
>>from worrying about their savings, and people with more $ than that are
>>the ones who would be willing to do their homework on banks anyway.
That keeps the young masses from worrying about their savings.
The about to retire masses are likely to have closer to $100,000 in their
accounts and still be biting their nails about how to make ends meet in
the last 20 years of their lives (100,000 / 20 = 5,000/year plus pension
and social security).
>How is having people dividing their $100,000 accounts into ten $10,000
>accounts going to have any effect, other that maybe adding a little
>accounting overhead?
We received a notice of rules change from our bank which I understood
to mean you are insured for $100,000 at their institution now, not
per account. That works out OK if the assumption is that banks go
belly up one at a time.
--
=Richard B. Clark
Lisle, IL ...!{att,lll-crg}!cuuxb!rbc OR cuuxb!r...@arpa.att.com
Thant Tessman
n902...@unicorn.cc.wwu.edu (james d. Del Vecchio) writes:
[...]
|> One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
|> and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
|> insured limit from $100K to $10K or less. This would still keep the masses
|> from worrying about their savings, and people with more $ than that are
|> the ones who would be willing to do their homework on banks anyway.
|>
|> James Del Vecchio
There are people that make good arguments that the whole thing
wouldn't have happened if the insurance (even at $100k) would
have been *per person* instead of *per account*.
thant
tim...@public.btr.com
|In article <1990Dec20.0...@unicorn.cc.wwu.edu> n902...@unicorn.cc.wwu.edu (james d. Del Vecchio) writes:
|>
|>One good move to alleviate the pending bank-failure-taxpayer-subsidy cost
|>and the ongoing S&L failure t.s. cost, would be to lower the taxpayer
|>insured limit from $100K to $10K or less. This would still keep the masses
|>from worrying about their savings, and people with more $ than that are
|>the ones who would be willing to do their homework on banks anyway.
Why not just have FDIC, FSLIC charge premiums based on riskiness of a
bank/s&l's investments? And premiums would have to be high enough to
cover all costs without subsidy.
Banks might even be able to purchase various amounts of insurance
(ad: "other banks only purchase $100000 of FDIC insurance, we at
ShittyBank purchase $200000 of FDIC insurance, so you rich people
are twice as safe with us ...").
james d. Del Vecchio
>There are people that make good arguments that the whole thing
>wouldn't have happened if the insurance (even at $100k) would
>have been *per person* instead of *per account*.
>thant
It's per person/ per institution. You can get around this by
geting one in your name, one in your wife's, and additional ones
as joint accounts with your wife and kids.
Most of the deposits lost are under the limit anyway, so it
doesn't make much difference whether it's per person or per account.
Jim Del Vecchio
Robertson James
>jarober@aplcen (Robertson James ) writes:
Note: I NEVER replied to this thread. have no idea why my name is here.
James A. Robertson
Robert Firth
>Most of the deposits lost are under the limit anyway, so it
>doesn't make much difference whether it's per person or per account.
Could somebody please post fairly reliable numbers? My only information
is from a couple of articles in US News (which i can't remember too well),
and they left me with the definite impression that while most of the
ACCOUNTS were well under the limit, most of the MONEY was going to
accounts at or above the limit. (Usual problem of difference between
mean and median.)
Contrived example: Armadillo S&L has 100 accounts: 99 have a balance
of $1000 and one has a balance of $1 million. All are bailed out,
regardless of the limit (which I still think is the current policy).
Clearly, 99% of the accounts are well below the limit, but 90% of the
bailout money goes to the one fatcat.