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Horatio's AngryBroker BlogHoratio Whistleblower (349)    AngryBroker.com Extra Bank FDIC Insured Coverage - Two SolutionsPosted Wednesday, August 06, 2008 (1 year 110 days ago.) Viewed 24 times. $100,000 in bank FDIC coverage may be fine for many, but in Retirement Planning the need for expanded FDIC insurance on bank accounts is common. Nobody wants to end up like the hapless IndyMac depositors that were only given access to half of their uninsured deposits after the FDIC took over the bank. First thought on every depositors mind was "What happened to my money?" The next thought should have been "How to I prevent this from EVER happening again?" Here are two ways to get expanded coverage over and above the $100,000 per account (or $250,000 per self-directed retirement account). The most commonly used approach is the "multiple-accounts" method. Simply stated, you set up multiple accounts, with different names and/or different owners to expand the coverage. It sounds simple, but remember -- the government is involved here! The FDIC states that coverage is based on the account owner's "right and capacity." Any accounts for which the owner of the account has the same "right and capacity" are totalled to determine FDIC coverage. Single ownership has one right and capacity, and joint ownership represents another right and capacity. A Revocable Living Trust has another right and capacity. Ditto a corporation or partnership. A good explanation of the sometimes convoluted process of setting up multiple accounts can be found on the FDIC website's "Financial Institution Employee's Guide" which was written for bank's employees to use when setting up multiple accounts for maximum FDIC coverage. But be prepared... it's not always easy to grasp on the first (or second, or third) run-through. Is there a simpler way to get more bank FDIC coverage? Absolutely. The second, and little known, method to increase your bank FDIC coverage is by using a "Deposit Placement Agreement" through a participating institution. You make one deposit into one account and have 100% FDIC coverage on the full amount. Currently you can get full FDIC coverage up to $50 Million Dollars. Currently there are around 2,000 institutions across the country (mostly banks and brokerage firms) that offer this service, called "Certificate of Deposit Account Registry Service" or ""CDARS." You make the deposit, and then they do all the work. You'll have one rate on your investment, it will all be tracked on one statement, and you will have your savings FDIC insured for up to $50 million dollars. Simple and easy. Why hasn't your Retirement Planning Advisor told you about this? Or your banker, or stockbroker? Hmmm... could it be that their company doesn't offer the service? The Nissan salesman isn't going to send you down the street to buy a Toyota, is he? And even if a CDARS account is an available option with your financial advisor or banker, the payouts and bonuses for the salesman aren't nearly as juicy as they are for that 'in-house' certificate of deposit, mutual fund, or variable annuity. 
Permalink Comments (0) Bennigan's, Steak and Ale Bankruptcy BlowupPosted Wednesday, July 30, 2008 (1 year 118 days ago.) Viewed 181 times. Bank failure and the bankruptcy filing of a major restaurant chain may seem to be unrelated at first, but a closer look reveals a simple cause-and-effect relationship. And a much closer relationship than you might think. The investment mindset in the world - especially the United States - has been based on a fanatical belief in continuous, neverending growth. People planning for retirement have been duped into believing the stockbroker's promises of steady, consistent 12% returns, this even after the recent three-straight-years of losses. But the world doesn't always cooperate with the optimist, especially when the growth has been based on an illusion created out of thin air. First, there was the illusion of wealth created by the stock market. The late nineties saw millions of dollars created out of thin air and weak ideas. That bubble popped, so we had to come up with some way to keep the home fires burning. I know, let's use our homes! Previously, buying a house with no-money-down entailed something called "creative financing." Then the mortgage industry jumped on the bandwagon and freely offered no-money-down loans using something that can only be called "creative underwriting" coupled with "creative appraising." People bought houses they couldn't afford at unrealistic prices that could only have been based on the "continuous, neverending growth" theory. With more and more people owning what they thought were private ATM machines, the stock market recovered nicely. All those profits from the mortgage-backed securities and underwriting fees only added to the boom in the economy. People used the new illusion of wealth and 'free money' to buy the reality of a fried Monte Cristo sandwich at Bennigan's, or a 16 oz. T-Bone at Steak and Ale, along with a gas-slurping SUV and a flat-screen TV just a little bit bigger than their neighbor's. The problem with illusions is that eventually you figure out they're not real. And when reality hits, it may not always be pretty. In fact, when it comes to illusions of wealth, it's usually horrendous. And when the real estate ATM runs out of cash, there's no more funny money to buy appetizers at Bennigan's. So the bank goes under, and then Bennigan's goes under. It's time for a reality check, people. We've turned into a country that kills its grandchildren to feed ourselves. What can you do? Simple - stay in touch with reality. *Don't finance Fried Monte Cristo sandwiches. If you can't pay cash, you can't have it now. *Don't finance groceries. If you can't pay off the credit card at the end of the month, you're financing your groceries. *Get your feet back on the ground. We have completely removed ourselves from the real source of what sustains us. The average item at the grocery store travels over 1,400 miles to get there. Put your hands in the dirt and grow something in your back yard, even if it's one tomato in a pot. *Get an accurate idea of where you are financially. Not where the stockbroker says you'll be in 10 years if you do exactly what he says, but get an accurate idea of where you really are. Then, and only then, can you paint a realistic future for yourself, a future based in the reality of security and not the illusion of wealth.
Permalink Comments (1) Bank Failure Claims IndyMac... Is Washington Mutual Next on the FDIC Problem Banks List?Posted Friday, July 18, 2008 (1 year 129 days ago.) Viewed 2,146 times. The July 11th FDIC seizure of IndyMac last week came a short ten days after IndyMac denied it was close to collapse. I imagine that there were a lot of hushed tones and worried whispers in banks all across the country this week as tellers and lower-level employees wondered if their bank was on the "secret" FDIC problem banks list. It may not matter which 90 banks (up from 45 banks at the end of 2006) are on the FDIC problem banks list anyway - apparently IndyMac wasn't on the list and the FDIC was caught by surprise. This happened even as FDIC Chairman Sheila Bair had been sounding the bank failure alarm for well over a year, and has been pulling back retirees to gear up for the inevitable failures that are coming. So which bank will fail next? Hmmm... let's see... could it be Washington Mutual (aka WaMu)? Are there some telltale signs that the 119 year WaMu run is almost over? Let's look:
I'm no genius, but I'm smart enough to step around the dog-doo on the lawn. And when I hear that upper-level Wamu bankers are quietly suggesting that some of their larger, "better" customers move deposits over $100,000 to other banks, it perks up my ears, and I watch where I'm stepping. Is it true? I have no way of knowing because I didn't hear this directly, I heard it indirectly ("My buddy is a manager at WaMu, and he told me...") so take it with an extra-large grain of salt. But even if this isn't happening, I can read the writing on the wall, and I can smell the dog-doo on the lawn. If I were you, I'd step around it too. In the meantime, you should ask yourself the question "Is My Bank Safe?" Copyright 2008 Advantalo Resources, Inc.
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