Crisis Update

Deep breath.  Ok.  First, I'd like to apologize for too few posts in the past week.  As you can imagine, it has been quite hectic around here.  Add the end of the quarter which requires massive reporting to clients and I am simply swamped.  Excuses, excuses, I know.  So without further adieu, let's talk crisis.

Congress finally passed the Paulson Plan.  We will call just that, the "Paulson Plan" or rescue package and not a bailout as previously discussed.  The fear as of late last week was that perhaps it was too late.  Indeed the credit markets are deeply frozen.  Student loans thought to be approved, failed to consummate.  Some students were sent scrambling as were schools trying to find alternative sources of financing.  So much for this being "just" a Wall St problem huh?

Crisis Coverage: FDIC Rumors

It appears today's market activity and the news regarding Merrill, Lehman and AIG has spiked an interest in my earlier post about the safety of financial institutions.  I read on the tape today that one economist was emphasizing bank failures and the possibility of the FDIC running out of the reserves used to insure deposits up to $100,000.  Let us examine this possibility from a rational perspective:

Financial Institutions- Is Your Money Safe?

The headlines have been full of bank troubles and failures like Indy Mac.  The FDIC recently stepped in to save Indy Mac depositors in July and this action is expected to cost the FDIC some $4 to $8 billion.  This is in addition to the approximately $1.2 billion in other FDIC bank rescues so far in 2008.  Given such news, it is timely to discuss how assets are protected and why you should not worry about it.