Curious what your take is on this:
Ben Bernanke's Hush Money
A hell of a lot of meandering without getting to the point. Seems to be opposed to the FDIC. Seems to touch the edge of an uninformed rant about immigrants but pulls back after making at least one stupid assertion. I basically stopped reading after "Foreigners do not... buy American goods." If you could explain what the point is I can tell you what I think. Yes, banks are based on the assumption that everyone won't simultaneously withdraw their money. That only happens when there is a panic. The FDIC provides a reason not to panic, thus usually preventing bank failures. Thats perfectly logical. Its not a moral hazard, unless you are opposed to banking, which takes us over the cliff of a wide array of radical notions that are of no practical use right now.
Based on what we know about Indymac one of the problems that we have is a lot of people are depositing large sums of cash in bank accounts. In some cases more than the FDIC insures. Thats stupid, and it reopens the risk of bank runs. The right answer to it is probably stock market annuities with set upper and lower bounds for return...
RE: Subprime lending not main trigger of real estate bubble