The collapse of Washington Mutual and the FDIC-engineered fire sale to JPMorgan Chase has people worried — about Wachovia. Wachovia’s stock is down 45% for the week, and 27% today as bailout talks stalled in Washington and WaMu held a garage sale at the FDIC.
Everyone knows that your money is safe in an FDIC insured bank because if the bank fails (Hello, IndyMac!) the FDIC will step in and repay your money (generally, up to $100,000.) But what if the FDIC runs out of money? It doesn’t have an unlimited supply and enough bank failures could completely drain its fund, says ABCNews: