BillsWatch Posted February 4, 2009 Share Posted February 4, 2009 All of my primary banks for my accounts are being taken over by insolvent large banks aided by government (i.e. Citi bank). None of my banks were in financial difficulties hence government was paying them to clean up mess. How are banks being aided by government able to convince solvent banks to merge with them? It appears that government money is going into mergers. Oh and I am worried that some of my assets will be combined into one bank and my combined assets will exceed the maximum amount being protected by FDIC once temporary raise limit to $250,000 expires at end of year. Ii appears to be setting me up to either lose insurance or take a penalty for early withdrawal. Link to comment Share on other sites More sharing options...
Acantha Posted February 4, 2009 Share Posted February 4, 2009 How are banks being aided by government able to convince solvent banks to merge with them? It appears that government money is going into mergers. VERY easily actually. Think about it, these banks (we'll use Citi as the example) are in trouble because they bypassed sound lending practices and bought into the government instructions to lend any amount to any person (by way of legislation and lowering of the interest rate). They do this to MAKE MONEY. Doesn't matter if people can pay off the loans, because it's the interest that they are making money off of. They fed the bubble every bit of oxygen they had, then used whatever else was available to keep it going. Meanwhile, your bank stayed within their means, lent money to worthy applicants, and made much less money along the way. They did the right thing, and if they really were holding back from striking it rich, they did so because they knew that sooner or later someone had to pay the piper. So what happens? Everything goes to hell, but instead of Citi going falling to ruin, they were bailed out and given money from the gods. Meanwhile, your bank is taking the hit from the economy (partially caused by Citi), with none of the phony money that Citi brought in over the past decade, AND without any bailout money. Why wouldn't they say F-it, give us some too? It's very similar to why FDIC is such a load of crap (even ignoring the fact that it's not even close to being funded). Every bank pays into FDIC, but only banks with the worst business practices (to make loads of quick cash) get to take money out. What incentive does this give to good banks? None. once temporary raise limit to $250,000 expires at end of year. My guess is, you won't have to worry much about that happening. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted February 4, 2009 Share Posted February 4, 2009 All of my primary banks for my accounts are being taken over by insolvent large banks aided by government (i.e. Citi bank). None of my banks were in financial difficulties hence government was paying them to clean up mess. How are banks being aided by government able to convince solvent banks to merge with them? It appears that government money is going into mergers. Oh and I am worried that some of my assets will be combined into one bank and my combined assets will exceed the maximum amount being protected by FDIC once temporary raise limit to $250,000 expires at end of year. Ii appears to be setting me up to either lose insurance or take a penalty for early withdrawal. Since you said penalty I assume you mean IRA. Roll it into a outfit you can trust, and there will be no tax or withdraw issues. Link to comment Share on other sites More sharing options...
DC Tom Posted February 4, 2009 Share Posted February 4, 2009 All of my primary banks for my accounts are being taken over by insolvent large banks aided by government (i.e. Citi bank). None of my banks were in financial difficulties hence government was paying them to clean up mess. How are banks being aided by government able to convince solvent banks to merge with them? It appears that government money is going into mergers. Oh and I am worried that some of my assets will be combined into one bank and my combined assets will exceed the maximum amount being protected by FDIC once temporary raise limit to $250,000 expires at end of year. Ii appears to be setting me up to either lose insurance or take a penalty for early withdrawal. It's not uncommon for companies to improve their liquid asset position buy buying up cash-rich companies. In the case of the banking industry...banks have to balance deposits with reserve requirements, which ultimately determines what they can loan out (to put it very hand-wavingly). And since our idiot government massively screwed up the TARP program by not buying up the "toxic assets" like they were supposed to, there's still a bunch of bad assets on the banks' books eating into their reserves...so they're using government money to buy up deposits (i.e. solvent banks) to solidify their financial positions. But Citi's a bad example to begin with, since they had serious problems before the credit markets took a nose-dive, anyway. Plus, they're so huge, they're reasonably likely to spin off parts to other financial companies and leave their relatively solvent commercial banking division...well, solvent. Link to comment Share on other sites More sharing options...
BillsWatch Posted February 4, 2009 Author Share Posted February 4, 2009 Since you said penalty I assume you mean IRA. Roll it into a outfit you can trust, and there will be no tax or withdraw issues. No I am talking about CDs and other such investments where early withdrawal results in substantial penalties but it is no longer protected by FDIC. My guess is, you won't have to worry much about that happening. I am not sure what worries me more - them not extending it or extending it. Right now I have exercised any options I had such as notices and converting of terms so I can move what I can leaving behind longer term assets. Unfortunately this is not only bank I am dealing with this type of problem since I tend to layer assets as part of my insurance. But Citi's a bad example to begin with, since they had serious problems before the credit markets took a nose-dive, anyway. Plus, they're so huge, they're reasonably likely to spin off parts to other financial companies and leave their relatively solvent commercial banking division...well, solvent. Which is exactly why I have taken all of the money I can out of Citi group in past and I am being saddled with them again. I have found changes in terms in past allowing access to information to partners and such which I told them no and closed accounts but they are getting it anyways now. Seems only solution is to take as much assets out of US. Link to comment Share on other sites More sharing options...
Tcali Posted February 4, 2009 Share Posted February 4, 2009 All of my primary banks for my accounts are being taken over by insolvent large banks aided by government (i.e. Citi bank). None of my banks were in financial difficulties hence government was paying them to clean up mess. How are banks being aided by government able to convince solvent banks to merge with them? It appears that government money is going into mergers. Oh and I am worried that some of my assets will be combined into one bank and my combined assets will exceed the maximum amount being protected by FDIC once temporary raise limit to $250,000 expires at end of year. Ii appears to be setting me up to either lose insurance or take a penalty for early withdrawal. roll you IRA into Vanguard or T Roe or some other oufit--they have minimal 500k coverage and usually much more. i dont see a real big problem there. You needn't withdrawal funds in order to switch your retirement aCCT into another institution. Link to comment Share on other sites More sharing options...
BillsWatch Posted February 4, 2009 Author Share Posted February 4, 2009 roll you IRA into Vanguard or T Roe or some other oufit--they have minimal 500k coverage and usually much more.i dont see a real big problem there. You needn't withdrawal funds in order to switch your retirement aCCT into another institution. They are NOT IRAs - did you read the thread at all. I already invest my maximum in my IRA but these are different funds, funds I did not put into stock market but fixed assets. Link to comment Share on other sites More sharing options...
Live&DieBillsFootball Posted February 4, 2009 Share Posted February 4, 2009 You can up the FDIC limit by changing the ownership of some of the cd's. You get 250k for accounts in your name. 250k for accounts in your wife's. Another 250k for a joint account with your wife, etc, etc. Link to comment Share on other sites More sharing options...
Tcali Posted February 4, 2009 Share Posted February 4, 2009 They are NOT IRAs - did you read the thread at all. I already invest my maximum in my IRA but these are different funds, funds I did not put into stock market but fixed assets. sheesh I read the thread and assumed the penalties were re IRAs-- I think you are being a bit overly 'nervous' about your accounts. I would assume that enough of your CDs would mature in time to move them without penalty by the time these mergers take place. In the longshot scenario that ALL your CDS are long termed..AND your banks get merged into one before ALL the maturity dates--Then you may want to contact the banks legal dept. and see what your protections are.--Highly unlikely scenario though. Link to comment Share on other sites More sharing options...
GG Posted February 4, 2009 Share Posted February 4, 2009 You can up the FDIC limit by changing the ownership of some of the cd's. You get 250k for accounts in your name. 250k for accounts in your wife's. Another 250k for a joint account with your wife, etc, etc. Of course, if he has over $750k in CDs, then he's rich and doesn't deserve any sympathy or advice. Link to comment Share on other sites More sharing options...
BillsWatch Posted February 6, 2009 Author Share Posted February 6, 2009 Of course, if he has over $750k in CDs, then he's rich and doesn't deserve any sympathy or advice. Sympathy no but I could afford advice. Link to comment Share on other sites More sharing options...
Recommended Posts