The federal agency insuring bank deposits learned that it can't afford to ignore the blogs following its seizure this month of IndyMac Bank, the largest bank failure since the 1980s.
"The blogs were a bit out of control," Sheila Bair, chairman of the Federal Deposit Insurance Corp., told the San Francisco Business Times after a speech in San Francisco this week.
That's putting it mildly. Following the FDIC's takeover of IndyMac on July 11, widely followed blogs were speculating on bank runs on some of California's largest banks based on nothing more than people waiting for their branch to open or large deposits moving between financial institutions.
The FDIC plans to pay closer attention to the blogosphere in the future.
"We're very mindful of the media coverage and blogs in controlling misinformation. All I can say is were going to continue to stay on top of it," Bair said. "The misinformation that came out over the weekend fed a lot of depositors' fears."
"Pay closer attenton," that doesn't sound promising. Sounds like they would like to regulate bloggers if they could.
My bit of concern is that government thinks it is God, is all knowing and gets everything right. Thus, as far as the government is concerned, they would lke to watch everything and control everything.
Of course, in truth, they are only human, obnoxious controlling humans, but just humans. They will bring us such debacles as the FDIC's embarrassing management of Superior Bank and the crème de la crème of bad forecasting, the New York Federal Reserve economists Jonathan McCarthy and Richard W. Peach 2004 analysis that we were then not in a housing bubble.
All government regulators do is regulate out options. It's their way or the highway. Thus when mistakes happen they are super jumo in size, because alternatives are regulated out of existence.
