Posted by Ron Coleman on July 12, 2008
IndyMac will reopen fully on Monday as IndyMac Federal Bank under Federal Deposit Insurance Corp supervision, but tensions ran high as customers at a branch at its Los Angeles-area headquarters read a notice in the window saying it was closed.
At another branch down the road, a man who said he had more than $200,000 in an account — twice what is normally FDIC guaranteed — argued with a security guard who was closing up.
Of course. The security guard could have exercised his discretion and pulled out a wad of $200K for the guy. Why stop at arguing with him when you could hit him in the face with a pie?
But these are desperate times for people with too much money in the wrong bank, and such irrationality is not really funny. I wish I could have $200,000 to put in a bank, but if I did, I bet I’d be pretty distraught over the prospect of half of it perhaps going underwater with the speculative real estate market.
He need not worry, however: Our Congress is forever committed, bipartisan like and with great humility, solemnity and profundity, to perpetuating, nay, ratcheting up its policy of classic moral hazard, and will make sure that more money from the trough is found to fork over and above any stated FDIC insurance limit.
Because it is only money. Your money.
Cross-posted on Right-Wing News.
UPDATE: “Too big not to fail”!