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Conduct your personal banking through Wall Street Company X and benefit from the special incentives available to all Wall Street Company X U.S. employees.

BANK DEPOSIT PROGRAM – Increased Protection
Now you can safely consolidate greater cash holdings in Wall Street Company X’s Bank Deposit Program with increased protection. The Program utilizes two Wall Street Company X banks to double FDIC insurance coverage – single depositors are eligible for FDIC insurance equal to $500,000 and joint depositors are eligible for FDIC insurance equal to $1,000,000 in the Program. Additionally, there may be ways to increase this coverage based on account ownership. For example, a married couple can get up to $2,000,000 in FDIC coverage, as shown in the table below.

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The bold “double FDIC insurance coverage” is in the original.

They note that the $250,000 is just temporary at the moment. Ending December 31st, 2009 unless extended by Congress.

This isn’t something that’s new. The wealthy do this all the time to get around the FDIC limits but to be so blatant about it was surprising to me. There are even companies which will perform this service for you. I’ve read of some people spreading out millions of US dollars across hundreds of banks.

The tomorrow’s wealthy taxpayer (remember the top 25% paid 85.99%) is picking up the bill right so why not?

http://www.reuters.com/…

The Federal Deposit Insurance Corporation is seeking temporary unlimited borrowing authority from the Treasury Department, according to a copy of the final Senate bailout legislation on Wednesday.

In the bill, which is expected to be voted on by the Senate later Wednesday, the FDIC is seeking the borrowing authority through the end of 2009.

The FDIC currently insures up to $100,000 per depositor and up to $250,000 per individual retirement account at insured banks.

Really just accounting tricks. The FDIC doesn’t have their own separate fund to draw from anyway so instead of the Congress borrowing they are trying to delegate the borrowing through the FDIC.

http://www.reuters.com/…

The Senate agreed to vote on Wednesday night on a $700 billion financial rescue package that will include a sharp increase in the amount of bank deposits insured by the FDIC, but also includes a package of tax breaks the House of Representatives has rejected.

A Democratic aide predicted that “the Senate will pass it.”

Under the agreement to move the bill to the floor quickly, the measure will require 60 votes to pass instead of a simple majority in the 100-member chamber.

The Senate bill would increase to $250,000 from $100,000 the amount of individual deposits the Federal Deposit Insurance Corp insures, seeking to shore up consumer and business confidence in banks and win over lawmakers trying to sell their constituents on an expensive plan funded by taxpayers and seen as benefiting wealthy financiers.

The FDIC insurance money comes from the general account which is in the red already. Any payments would have to be borrowed or printed. In addition the FDIC covers all banks equally which is a distortion of the market. Insurance rates for the banks should be based on their solvency and related factors. Treating them the same incentivizes risky investments.

I’m glad it will require 60% to pass but my feeling is it’s likely to pass. Only a third of the senators are up for reelection and the FDIC and tax breaks may be enough of a carrot to push it over.

You can find the tax components at the Senate Finance Committee site but the FDIC increase is not listed.

Regardless of what we think they may do we need to keep up the pressure. Email the senators of your state and tell them in no way do you support this bill nor anything related to it. If they are up for reelection make sure you remind them this would be an absolute deal breaker for your vote (regardless of whether you would have done so anyway.)

It’s the last thing listed on the schedule so we have all day to overwhelm them with “NO”s.

You can utilize DownsizeDC or go straight to the senators site.

http://www.washingtonpost.com/…

Citigroup has agreed to buy Wachovia bank in a deal brokered by the Federal Deposit Insurance Corporation to avoid another major corporate failure in the midst of the ongoing financial crisis.

The FDIC announced the deal on its Web site this morning. No price for the transaction was included in the announcement. But the FDIC said that the deal hinged on a loss sharing arrangement between Citigroup and the FDIC, the agency responsible for insuring bank deposits.

Wachovia has been saddled by mortgage-related losses. Under the terms of the deal, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will be responsible for any losses beyond that, but was given $12 billion in Citigroup preferred stock and warrants in return for that guaranty.

The FDIC statement emphasized that Wachovia “did not fail,” and that its branches and other offices will be open as usual.

http://www.bloomberg.com/…

European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG as tremors from the U.S. credit crisis reverberated around the world.

The U.K. Treasury seized Bradford & Bingley, Britain’s biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.

The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.

“The precarious global environment means the weakest links in Europe are now falling,” said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. “If banks continue not to lend to each other we’ll see more failures.”

More insider deals, more centralization, more government interference and control.

This is what happens when you have a system based on debt on a large scale. It’s inherently insolvent.

Update:

This is cute…

Federal Reserve Chairman Ben Bernanke said in a statement the FDIC action “demonstrates our government’s unwavering commitment to financial and economic stability.”