Because Perich isn't reading the news for me anymore...

[nafe]

Recent events have gotten me thinking about, amongst other things, the FDIC guarantee of qualifying deposits up to $100,000. I quickly realized I had no idea how that worked. So I educated myself. Thanks Wikipedia

Comments

[hawver]

If my memory is correct, the DIF won't be on the hook for Merril's toxic paper even after it's purchased by BofA. DIF is just for demand deposits (checking, savings, stuff like that).

[nafe]

But isn't BofA securing all that debt with its deposit assets? If not, where is that money coming from? It bears investigation, certainly.

[r_ness]

hawver is right.

Moreover, there are fairly detailed restrictions on what a depository institution can do with bank deposits. Covering the losses in an investment arm with bank deposits isn't one of them.

Also, see my other comment for what happens if your bank goes bust. :)

[silk_roses]

in the words of dr. horrible: "...balls!"

[nafe]

I'm at least comforted in having some sense how the mechanism by which we'll all be screwed works.

Slighty OT

[eeyorecol]

My brother now works for BofA; one of his best friends works for Merrill Lynch. Monday morning, Mike called his friend (also Mike) and said "I need you to come to 50 Rock and bring me a footstool now."

Other Mike replied "I'm going to hang up this phone in about 4 seconds"

Re: Slighty OT

[bedfull_o_books]

OMG, that is awesome.

Funny you should ask about that!

[r_ness]

One of my friends just asked a similar question in my LJ. Here's my answer:It's true that if WaMu goes bust, the FDIC will likely run through its $45 billion deposit insurance fund paying out deposits they've guaranteed