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Robert Kiyosaki will appear tonight on ‘On The Record’ with Greta Van Susteren
Host: Greta Van Susteren
When: Airs on Fox
Thursday, September 25
10 - 11 PM ET (reruns three hours later for the west coast)
Robert discusses the economy and what it means for the everyday investor.
9/26 Update: Robert's appearance on "On the Record" was postponed due to breaking news. As soon as it's rescheduled, we'll let you know.
Mr. John McCorry
Executive Editor
Bloomberg News
Dear Mr. McCorry:
Bloomberg reporter David Evans' piece ("FDIC May Need $150 Billion Bailout as Local Bank Failures Mount," Sept. 25) does a serious disservice to your organization and your readers by painting a skewed picture of the FDIC insurance fund. Let me be clear: The insurance fund is in a strong financial position to weather a significant upsurge in bank failures. The FDIC has all the tools and resources necessary to meet our commitment to insured depositors, which we view as sacred. I do not foresee – as Mr. Evans suggests – that taxpayers may have to foot the bill for a "bailout."
Let's look at the real facts about the FDIC insurance fund. The fund's current balance is $45 billion – but that figure is not static. The fund will continue to incur the cost of protecting insured depositors as more banks may fail, but we continually bring in more premium income. We will propose raising bank premiums in the coming weeks to ensure that the fund remains strong. And, at the same time, we will propose higher premiums on higher risk activity to create economic incentives for poorly managed banks to change their risk profiles. The fund is 100 percent industry-backed. Our ability to raise premiums essentially means that the capital of the entire banking industry – that's $1.3 trillion – is available for support.
Moreover, if needed, the FDIC has longstanding lines of credit with the Treasury Department. Congress, understanding the need to ensure that working capital is available to the FDIC to provide bridge funding between the time a bank fails and when its assets are sold, provided broad authority for us to borrow from Treasury's Federal Financing Bank. If necessary, we can potentially raise very large sums of working capital, which would be paid back as the FDIC liquidates assets of failed banks. As per our authorizing statute, any money we might borrow from the Treasury must be paid back from industry assessments. Only once in the FDIC's history have we had to borrow from the Treasury – in the early 1990s – and that money was paid back with interest in less than two years.
Finally, Mr. Evans' suggestion that the "government" could ever be "on the hook for uninsured deposits" demonstrates a misunderstanding of FDIC insurance. To protect taxpayers, we are required to follow the "least cost" resolution, which means that uninsured depositors are paid in full only if this is the least costly option for the FDIC. This usually occurs when a bidder for the failed bank is willing to pay a higher price for the entire deposit franchise. We are authorized to deviate from the "least cost" resolution only where a so-called "systemic risk" exception is made. This is an extraordinary procedure which we have never invoked. And again, any money we borrow from the Treasury Department must be repaid through industry assessments.
I am confident in the strength of the FDIC's resources to make good on our sacred pledge to insured depositors. And, remember, no depositor has ever lost a penny of insured deposits, and never will.
Andrew Gray
Director
Office of Public Affairs
Federal Deposit Insurance Corporation
As of September 19, 2008, the Securities and Exchange Commission (SEC), acting with the U.K. Financial Services Authority, has temporarily prohibited short sales of the securities of 799 financial institutions for 10 business days. The temporary prohibition is scheduled to end Thursday October 2, 2008 at 11:59 pm Eastern Daylight Time.
It should be noted that the SEC may extend the prohibition beyond 10 business days if it is deemed necessary in the public interest and for the protection of investors. At this time, the SEC has stated that it will not extend the order for more than 30 calendar days in total duration.
If you need further clarification and information on this issue, visit http://www.sec.gov/news/press/2008/2008-211.htm
Rich Dad’s Education student Tanya Jean of Portland Oregon recently put some of her advanced training classes up for sale on her website—not because our training wasn’t good enough, but because it was so good! Here’s what she wrote in her online for sale notice:
I have 5 Rich Dad (Wealth Intelligence Academy) advanced training classes to sell at a significant discount as a package. … The classes for sale are from a large package I purchased last year. I benefited immensely from the classes I took, but no longer need the remainder because I am moving overseas to develop a property I recently acquired. Thanks to the knowledge I gained in my Rich Dad classes, I was able to strategically invest in multiple rental properties and lease-options within the first 6 months of my real estate investing career, and now I have enough passive income to follow my dream of living abroad!
We wish Tanya Jean all the best and are delighted to have played a key role in helping her realize her dreams.
Here's a great idea for new investors:
For every investment, create a checklist that will guide you. This list should include:
- Your requirements
- Your risk
- Your desired profits
As you move through the process of completing the investment, also complete the checklist to make sure you stay on track. If the investment isn't meeting your requirements, step back and figure out what's going on. If the risk level is exceeding what you're comfortable with, stop and understand why and then decide what action you need to take to get it back in line. And certainly, if the desired profits aren't there, what's the point of the investment?
Force yourself to do this exercise with every investment. Eventually it will become intuitive, but until you get to that point, write it down.