Monday, May 11, 2009

Why the FDIC should be dismantled

The FDIC is backstopping huge losses from commercial banks who did not control their risk appropriately with taxpayer money. They are auctioning or giving performing loans away at less than 50 cents on the dollar. I personally have seen deals where the FDIC is going back to the original debtor to buy the loan back or get refinancing from another bank for 50 cents on the dollar or lower. Congratulations, you paid for it and you better be mad.

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