The Bank Failures of 2008

The Run From Banks to Credit Unions
In March of 2008, Banks throuout the United States accessed the Federal Funds Window for over Seven Billion Dollars a day in total and complete secretcy. What does this mean? It means that your local bank does not have any capital and is borrowing money from the Federal Government at two percent interest only to keep the doors open. If you have money in a bank, now would be a great time to tranfer if to your local National Credit Union Administration (NCUA) Institution.
The Federal Deposit Insurance Corporation and Henry Poulson of the United States Treasury Department are playing hanky panky with the rules and the money. For example, a clarification of accounting rule SFAS 157 allows FDIC institutions to avoid writedowns of level 3 assets. What are a level 3 assets? Its none other than mortgage backed securities and derivatives, which at present are worthless. This allows banks to keep these assets on their books at full face value. Now, in addition to a bank carrying a non performing questionable asset, they have also added debt from the Fed. This slight of hand will show up in first quarter 2009 and when it does, it will make previous Savings and Loan failures seem like childs play.
Thanks to conservative oversight from the NCUA, corporate credit unions, credit union service organazations, and federally insured credit unions were discouraged from buying, investing or even thinking about level three assets. I encourage my freinds to seriously look to move checking, savings, money market, and loans to your local NCUA institution pronto. The second shoe has not yet dropped on the credit crises of 2008 and it would be a shame if it hit you on the head.
George Farrell
www.abmgts.blogspot.com