Gearhead Jim
Full time employment: Posting here.
(2007) "Wow, these mortgage-backed securities are rated AAA, they're really safe."Hmmmm, lets see, insured deposits are paid from multi-billion dollar deposit insurance funds of the FDIC or NCUA (both of which are solvent by any measure), which can be recapitalized by a credit facility from the Federal Financing Bank or the Secretary of Treasury (using public debt transactions like treasury notes and bonds). And each insured deposit is backed by the Full Faith & Credit of the United States, which is, in turn, backed by the taxing power of the Federal Government. Oh, and when the FDIC or NCUA pays an insured deposit, normally by transferring the insured deposit to a solvent insured bank or credit union, the Government then has a priority claim against the assets of the failed bank. So, the Government's claim exposure is never the total face value of the insured deposit.
Yep, there's a lot of risk to an insured deposit (excessive sarcasm intended) -- it's less of a risk than a T-bill.
My sarcastic point is that problems are not always predictable.
For a very small investment in time, and no money, I can get a small measure of increased security. I feel it's worth the minor effort, others are not required to agree.
Spreading the accounts around is also a natural part of my laddering.