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Originally Posted by hi_im_god
the fdic insures deposits.
when a bank's assets (what is owed them) significantly exceed their liability (what they owe depositors), the fdic steps in and for all intents and purposes temporarily "nationalizes" the institution. it indemnifies what would otherwise be depositor loss's.
the government has, since the last depression, stood behind the "private" banking system.
indymac was "nationalized" last fall. lehman wasn't.
do you ever wonder why an institution like citicorp with $1.75 trillion in supposed assets is currently valued by the market at around $10 billion?
that's a troubling question for someone that believes in market economies. it suggests most people in the market think the institution is insolvent. they loaned a lot of money assuming housing would keep going up. they now hold assets that aren't worth what they owe their depositor's.
same for b of a. and too many other financial institutions.
on the upside, my favorite poster is back.
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Mine too
Perhaps we should start a betting pool on how long it takes for him to get grounded to the basement
