[lackbeard]

> the point of the FDIC system is for customers not to have to do this kind of risk assessment themselves

It seemed self-evident to me, based on the explicitly stated limit on FDIC insurance, that if you had an amount of money over that limit, you really need to have a plan to deal with that risk, and people who failed to do so should suffer the consequences of their poor decisions. As things stand, the people who did spend the time and/or money to provision for that risk have suffered for it.

I think what many people are having a hard time with (myself as well, sort of...) is how the rules were changed out from under everyone in yet another example of how the rules don't apply to the politically connected.

[tptacek]

As I understand it, the ordinary way FDIC resolves a situation like this is that they simply have the failing bank acquired by a peer bank (a bank of generally the same size and structure), which then takes over the depositor obligations. So it's not as if the ordinary course is that uninsured deposits get zeroed out; it's just that the mechanism FDIC is using is novel and abrupt.

[rufus_foreman]

>> they simply have the failing bank acquired by a peer bank

"Simply".

WaMu - acquired, depositors got 100 cents on the dollar

IndyMac - 50 cents on the dollar

Silver State - 11 cents on the dollar

Depositors have not always been made whole in the past. Calvinball has certainly been played in the past, for IndyMac the FDIC limit was retroactively raised from 100K to 250K.

That's what people are pissed about. The Calvinball rules.

And we know how that works out, if you're in the in group, you get paid, and if you're not in the in group, you get fucked.

As Black Flag once sang, "We're tired of being screwed. Revenge!"

[lackbeard]

I wonder why that didn't happen in this case? Perhaps fear that would just trigger a run on the acquiring bank?