well, i heard that even if you have fdic insurance
FDIC insurance is a somewhat different issue, but
as I pointed out in an earlier post in this thread, the FDIC only has enough assets to cover about 0.5% of what they claim to insure. If a big enough bank collapses, either FDIC's assets will run out or the government will just have to print even more to cover all the losses.
Not accurate for several reasons.
1) You are assuming that the banks hold $0 when they go under so they FDIC has to cover everything. Most of the time the banks have MOST but not ALL of the money.
2) Even now with Signature and others that were closed, the other banks are taking over the FDIC did cover some but the new banks have enough to cover the rest. That is the point.
3) The FDIC also gets the profitable debt that they can then resell if needed.
AND also keep in mind, it's also a little like care insurance. You car is worth $30000. You hit a tree. It's going to cost $15000 to fix it. The insurance company totals and takes your car and cuts you a check for $30000 minus you deductible and then takes you wrecked car. And then proceeds to part it out to scrap yards and such for $20000.
They actually come out with more money then if they fixed your car.
This is also happening here. The banks WERE profitable. They just, at the moment had a lot of issues. There are plenty of people wiling to buy the scrap parts of the banks because they do have a lot of value.
-Dave