kool aid or downright fraud? In hindsight it is so amazing how much information was possibly being held back. I took out a heloc in june 2006 to pump up my business. i used the same mortgage guy I had used before. I was wondering why there was a delay and I could’t get answers. Plus my business bank had turned me down flat. I got funded(doggoneit). I just then came across this site that painted a not-so-rosy picture of things to come. Now it appears the fdic had some misgivings 2 years prior to that. Are Twist and Gang so far ahead of even our own government? That heloc I took out seemed so strange at the time. Like I had less than stellar credit. Seems like they might have had a glimpse into the future also. Kool aid or Fraud? I love the anti-spam word(coverup)

For some reason my HTML editor wasn’t working properly- so I had to do the link manually. I was so proud of myself for having done it right for a change. After all this time, you’d think I’d have learned how to do it properly. Thanks for catching that.

Yes Igor- that investment in an HTML manual is long “overdue”.

“The page you requested is no longer here [error 404]”

Link: http://housingdoom.com/2006/07/05/housing-bubble-10/%22

Removing the “/%22″ from the end seems to correct that.

The other flaw with the “not as bad as last time” argument-

L and I went to hear Jay Butler speak over a year ago, the title of his speech being “Why Arizona Real Estate Will Not Crash”. Butler said that this time around isn’t near as bad as the S&L crisis.

Things were just starting to heat up at the time Butler made the comment. It’s like comparing the first inning to an entire ball game. [Sure the team scored more last time- but they had eight innings to do it in!]

“Ha! my good doctor, we have found the flaw in their argument.”

“But my dear Sherlock, what could possibly be amiss with that innocuous statement.”

“You must recall, for the last two weeks commentators have been repeating the mantra ‘last time around hundreds of banks per year failed, whereas this time around that would be unthinkable!‘ “

“Ah, I think I see now. You mean we will have only a few failures, but today even the regional banks are mostly huge by earlier standards.”

“You’ve got it Watson!”

Whether the fallout will be contained for the taxpayer depends on the strength of the Federal Deposit Insurance Corporation’s (FDIC) safety net. By law, the FDIC maintains a banking insurance fund equal to 1.25 percent of the level of insured deposits . Today, a $53bn fund of ultra-safe treasury bonds stands behind $4.2 trillion in insured deposits . The failure of IndyMac alone will deplete the FDICs reserve fund by $4-8bn (or 15%), thus lowering the reserve ratio to 1.01% according to government estimates. This shortfall could trigger an increase in insurance premiums as early as September at the board’s next premium setting meeting. Analysts predict that premiums could rise to 10 to 15 cents per $100 of domestic deposits from the current 5 to 7 basis points premium for most institutions, which is still well below the 23bp in the wake of the S&L crisis.

Despite the introduction of risk-based premiums in 2007, recent FDIC research suggests that the insolvency risk to the bank insurance fund has increased significantly due to industry consolidation, and in particular due to the concentration of deposits in the ten largest U.S. banking companies.