The topic today is the limits of protection afforded by the FDIC in a meltdown.
From : http://www.seeingtheforest.com/
In my opinion it is urgent that everyone understand how FDIC limits work. This is a time when you need to know that your own money is safe. The limit is $100,000 per bank, $200,000 per couple, and $250,000 for retirement accounts. If you are lucky enough to have more than that in one bank, split it up. And I did say bank - not brokerage. And tell your friends and relatives to do the same.
It is possible - in a worst case scenario-that some of your money you might not be able to recover if you hold it at a bank that is hit hard from the results of the writedowns and overall losses from the subprime disaster.
NEW YORK --When the $2.5 billion NetBank was closed by federal regulators last month, some 1,500 of accounts in the online bank had balances that exceeded federal deposit insurance limits.
More over....
NEW YORK --When the $2.5 billion NetBank was closed by federal regulators last month, some 1,500 of accounts in the online bank had balances that exceeded federal deposit insurance limits.
The owners of those accounts, with deposits totaling $109 million, won't necessarily lose all their money because federal insurance may cover some, and they'll share in the proceeds of the sale of the failed bank's assets. Still, it could take time for the bank to be liquidated, and they may not get 100 percent of their money back.
Of course this is not the beginning of a run on bank money. It just means the FDIC guarantees do not apply all he time and the realities of this might be harder than you imagine.
If you make a few adjustments now, you might save yourself a headache later. This is an important article to read.
http://www.boston.com/...
Keep this in mind when squirlling money away. Again this should not be alarmist, but look at the reality.
BOSTON (MarketWatch) -- Citigroup Inc. in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management's best guess. The investment bank said its total liabilities related to level 3 assets at quarter-end were $40.36 billion, according to the Form 10-Q. Citigroup said it often hedges its level 3 positions.
http://www.marketwatch.com/...