Bank depositors have long enjoyed the comfort of knowing that their savings are insured by the FDIC and, if necessary, by a $500 billion line of credit from the U.S. Treasury that is available to address systemic risks and unforeseen losses in the banking industry. In times of economic distress, the deposit insurance program has […]
Fed Guarantees Bank Savers Negative Returns
December 13, 2012 By Leave a Comment
Anyone with savings in the bank is painfully aware of the fact that they are receiving only slightly more income than someone who keeps their savings under the mattress. In an attempt to stimulate credit demand by lowering interest rates to near zero, the Federal Reserve has effectively guaranteed negative returns to savers after taking […]
Owning Bank Stocks Might Be Better Than Keeping Cash In The Bank
December 6, 2012 By Leave a Comment
The financial meltdown that began five years ago resulted in widespread financial devastation for millions of Americans. Retirement and stock portfolios were decimated while real estate values declined by 50% or more in many parts of the country. The American middle class was shocked as trillions of dollars of wealth suddenly disappeared. The collapse of […]