BankNotes ...

In a major sweeping vote the senate passed the Wall Street Welfare bill this evening providing $700 billion to the street to help solve their problems in three easy steps, first $250 billion up front; another $100 billion upon presidential approval (which will be granted I am sure) and the last $350 pending congressional approval. And, the taxpayers pick up the tab! It is like going to a fancy restaurant with 20 friends and everyone ordering the top end meal; then the hat is passed. But, in the end there isn't enough for the bill and tip, and since you were closest to where the waiter laid the down the bill you get the opportunity to figure out how to pay - while everyone is leaving with their date!

One small bright spot is that the FDIC insurance will be raised temporarily (when does the government do something temporarily?) to $250,000 from the $100,000 current limit. This will give depositors more confidence in the banks. Regional banks worked hard to get the increase in deposit insurance limit. They hope this will give consumers more confidence in the smaller banks. The banks felt that consumers believed that the bigger banks were safer places for their savings - which is untrue.

This will also increase insurance premiums the FDIC can charge the banks; so for the extra $150,000 of deposit insurance the FDIC will charge the banks approximately $105 per account (depending on the bank's premium rate of course).  This will bring in billions of additional insurance premiums into the FDIC insurance fund.

The bill also gave the FDIC the unlimited ability to borrow from the Treasury, which is a major increase from the current limit of $30 billion.  The unlimited borrowing, again, is temporary - it expires in 2009.

Maybe it is time to call your congressman!!