FDIC GOES FOR BROKE?

The Federal Deposit Insurance Corp may ask healthy U.S. banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, the New York Times reported, citing senior regulators.

Does anyone else see a problem with this? Yes it is true, the link is posted below. The FDIC who is responsible for insuring that our funds in the banking system are safe needs to borrow money. The fact that the FDIC needs a loan is not all the worrisome to me, what worries me is that they are asking the banks for the loans. With this I have I would like to point out:

If the FDIC borrows money from the banks that the federal government bailed out it is going to be like the government taking their money back but instead they are going to get charged interest on the money that was theirs in the first place. Ok here would be the flow of money:

China---> US Government---> Banks ---> FDIC.

Let’s keep in mind that the FDIC is the agency that insures our financials in our monetary system. If they cannot protect their cash flows, who can. As a business person I know cash flows are the indicator of the stability of a company, as a investor I would never invest in a company with hazardous cash flows, so something is not right at the FDIC.

Furthermore, read the statements below:

FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.

The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks, Bair said.

I hope you see the problem here. A federal agency is going to squeeze the industry it has spent millions to help. It is also going to punish banks for taking part in the programs of risky lending that they encouraged some years ago. I wonder if they, them, us, or who ever knows what is going on??

The Link

Too Big to Fail??

Hearing the words “too big to fail makes me sick”! Why don’t we just say “not smart enough to succeed”? The government has changed their job description to: running the country and (bailing out CEO’s of companies who mismanaged their organization). I hate to see the government taking ownership in large corporations it’s unfair to the others that are trying to compete in our capitalism based society. Now the corporations that accepted the bailouts have a stacked hand with a wild card (the federal government) and now no one can ever play a fair card game. I am not worried about the political side of this argument, what makes me curious is: when is a company small enough to let fail? Does it stop with car manufactures and bankers or does it go on and how do I get my name on that list?

Any thoughts??

Welcome To All

I wanted to create a blog where young business people can come and vent their problems with the business world, no matter what their problems are. Let's face it one day soon the business world is going to be ours for the taking. When that day comes do we want our image to be scared by the images our predecessors have left behind. An image or mistrust, greed, lack of focus on sustainability, and corporate disgust. I plan to enter the business world with a MBA in less then two years and I want to work for a business that understands:

Without society their would be no need for business.

Wake up Corporate America!!!