How do you bailout a bailout?

First you open the spigot, and then you just have to let it run.  I have been acutely aware of this for a while now, glad to see it is finally being tossed into the zeitgeist.

It won’t take many more failures before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue.  Full story here.

The only certainty in the medium term is going to be a weak dollar and higher costs of borrowing for the Treasury.

Source:
FDIC May Need $150 Billion Bailout as More Banks Fail
David Evans, Bloomberg, September 25, 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amZxIbcjZISU

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