I wish I could tell you this was a joke, and you could stop hyperventilating, but it is not. Mr. EZ Mortgage, Senator Chris Dodd, has heard the cries from the FDIC (going broke) and is charging in on his silver hair. I mean silver-haired steed.

The FDIC is trying to squeeze more money out of the banks that haven’t gone under yet, to pay their depositors when they do go under, and the banks are squealing loudly. Turbo-Tax Timmy Geithner is squealing loudly. Shelia Bair, chairman of the FDIC is squealing loudly. Ben Bernanke is stonewalling as usual, but wants an FDIC bailout too. Do not fear, Chris has a plan! Let the FDIC borrow $500 Billion dollars from the Treasury Department. WTF?!

The FDIC deposit insurance fund is currently about $19 billion; it’s been depleted by the failures of IndyMac and a host of lesser shipwrecks. Dodd’s bill could also give the FDIC more firepower to help address “systemic risks” in the economy, potentially creating ANOTHER source of bailout funds in addition to the $700 billion already appropriated by Congress. More money that Bernanke will keep hushed up!!

Mr. Bernanke said in a Feb. 2 letter to Mr. Dodd that such a “mechanism would allow the FDIC to respond expeditiously to emergency situations that may involve substantial risk to the financial system.” The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury Secretary and White House agree such money is warranted. Check, check, check, check, write the check.

The bill would allow it to borrow $100 billion absent that approval. I don’t think any of these clowns are going to turn them down. Currently, the FDIC’s line of credit with the Treasury is $30 billion. A 1991 law generally caps the amount of money the FDIC can borrow from the Treasury at $30 billion, and the FDIC hasn’t borrowed money from the Treasury in more than a decade.

Ms. Bair said a change in the law would give the FDIC more options to determine the best way to rebuild its depleted fund. In an interview, she stressed that all insured deposits were already backed by the “full faith and credit of the United States government.” So there’s that.

A change in the law would ease “the mechanics of how seamlessly we can access our lines of funding. I’m the kind of person that likes to be prepared for all contingencies,” Sheila said. Sheila isn’t blind, she sees that line for the cash is getting longer by the minute, and she’s hopping in while there is still some possibility of bagging some dough.

I’d say “bend over America”, but y’all are already in position. Sorry.

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