Economy

FDIC has received approval from the Treasury to extend temporary deposit insurance from the end of this year to 2013. Originally, the amount of moneycovered when deposited in a FDIC-insured bank was $100,000. However, the temporary extension allows for funds to be insured up to $250,000 during this period.

This extension is due in part to Congress approving higherborrowing limits for the FDIC. Now, the $30 billion line of credit the FDIC receives from the Treasury has been increased permanently to $100 billion. Even more, until 2010, the FDIC will be able to borrow as much as $400 billion more from the Fed, if needed.

But while these numbers can createa sense ofrelief in individuals who are interested in making sure their money is safe somewhere ... anywhere ... in the financial world, some believe that money is no more secure than in the stock market. Here are a few reasons:

• The number of deposits insured by the Deposit Insurance Fund (DIF) is around $6.4 trillion according to OA, as opposed to the official number thrown out by FDIC, which is $4.8 trillion. Critics say the number released is lower to allow them to stand behind the extension being called "temporary" and is dishonest, making them maybe not so trustworthy.
• The Treasury is already in its own deficit. So while itsaid that the DIF can't go bankrupt because it is borrowing from the Treasury, is this really true?

Everyone is looking for some form of security after losing hundreds, thousands, and maybe even millions of dollars in stocks, bonds, 401k funds, and much more.

Will the FDIC deposit insurance extension save the day? No. But it can help a few more people feel more comfortable about sitting their money somewhere for a few more years.

US home prices in the first quarter fell a record 19.1% compared to the previous year, and is a record-setting drop. Prices in 20 cities fell 2.2% for the month of March, were down 18.7% in the past year according to the Case-Shiller. Thus far, analysts have not seen any signs of an economic rebound, and housing remains unstable for most of the country.

Because most people now owe more than their homes are worth, they are unable to borrow from their home equity in order to finance purchases or pay off bills. This is further causing a drag on the greater economy, which is fueled mainly by consumption. People looking to buy homes for the first time are having trouble securing mortgages with low rates - most require sizable down payments in stark contrast to the loose lending that occurred during the most recent housing boom.

Price declines over 20 cities in the past year:

How much have home prices dropped in your area? Are you having any difficulty securing a low-interest mortgage rate due to tighter lending standards?

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