IndyMac Bank shut down by Federal Government

lexicon · Tar Sands Joined: Mar 08, 2005 Posts: 86

U.S. Shuts Big Bank As Crisis Intensifies
By Damian Paletta and David Enrich

IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators in one of the largest bank failures in U.S. history.

The Pasadena, Calif., thrift was one of the largest savings and loans in the country with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank and Trust Co., which failed in 1984 with $40 billion of assets.

IndyMac specialized in Alt-A loans, a type of mortgage that can often be offered to borrowers who don't fully document their incomes or assets. ...

http://online.wsj.com/article/SB121581435073947103.html?mod=hpp_us_whats_news
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Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1971

Huge. On many levels.

Big, big warning sign.

Credit crisis over? Not on your life. Just getting going.
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.

roccman

Only 5950 to go.

Got bunker?
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"... hope is a rotten-thighed whore" Niko Kazantzakis

We are going back to roccland - me

eastbay

Wiping out 10% of FDIC's cash. Wow. One swing.

So, what happens when the remaining 90% is paid out, which should happen later this year. Then what? Will the government simply print money to pay account holders? Will a percentage be paid instead?

You can't simply allow people with bank accounts lose their money. If people thought that might happen bank accounts would quickly empty. And that would cause some nasty problems for everyone.
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jbrovont · Intermediate Crude Joined: Jun 16, 2006 Posts: 701

True. Even if people thought they would get 95% back, because of interest rates vs. inflation, it makes more sense to pull it out in that senario. If people lose confidence in the FDIC, it's a whole new bucket of crud on the slop pile.

lentilsmine · Tar Sands Joined: Jul 09, 2008 Posts: 20

Another article at http://money.cnn.com/2008/07/11/news/companies/indymac_fdic/

Here are some select tidbits:

According to the FDIC, IndyMac's failure will result in up to $500 million in lost deposits out of $1 billion in uninsured deposits held by 10,000 customers. The agency says the failure will cost the Deposit Insurance Fund between $4 billion and $8 billion, based on preliminary estimates.

"It's possible this will be the most costly bank failure in history, but it's too soon to say," FDIC Chairman Sheila Bair said in a conference call late Friday night. The failure "could also affect premiums paid by all banks for deposit insurance," she added. [...]

IndyMac, with assets of $32.01 billion and deposits of $19.06 billion, is the fifth bank to fail this year. Between 2005 and 2007, only three banks failed. In the past 15 years, the FDIC has taken over 127 banks with combined assets of $22 billion, according to FDIC records. [...]

The head of the FDIC is looking to hire 25 staffers to deal with an anticipated increase in failures, a move that would increase its staff by 11%. Among those it hopes to hire are recent retirees who worked through the S&L crisis.

...

Now combine this with the talk of the government nationalizing Freddie Mac AND Fannie Mae or at least involving the FDIC in their operations due to a severe need to raise capital NOW ........ well. I'll be upping my stockpile again this weekend.

lentilsmine · Tar Sands Joined: Jul 09, 2008 Posts: 20

Oh, BTW:

http://money.cnn.com/news/newsfeeds/articles/apwire/59e390d542252e7203ad581c1ba997fa.htm

Lehman Brothers Holdings Inc. shares continued to slide Friday, at one point falling more than 15 percent amid speculation the investment bank is struggling financially.

Lehman shares slid $1.83 or 10.6 percent, to $15.47 in late afternoon trading. Earlier in the session, shares hit a nine-year low of $13.29.

Shares had already declined more than 24 percent this week.

"There is concern and speculation that Freddie, Fannie and Lehman won't be around on Monday," said Phil Orlando, chief equity market strategist at Federated Investors, referring to problems at the nation's largest mortgage purchasers Freddie Mac and Fannie Mae, which both were rocked again Friday, along with Lehman, the fourth-largest investment bank in the U.S. [...]

lorenzo · Fission Joined: Jan 01, 2005 Posts: 2231

So any right wing loonie explain this to me:

-if I start up my own business, invest my own cash in it, and I go bankrupt. Will the state give me money to save my a$$? Will it give me your money? Will it give me enough of your money so I can just continue my business as if nothing happened?

-and if not, then why does it bail out Northern Rock, Freddie Mac and Fannie Mae, to name but a few capitalists - private companies like all other private companies - who should have gone bankrupt.

-why are these losers more important than me?

-and why should I give bankrupt capitalists a single one of my hard earned greenbacks?

Capitalism is fake. It doesn't work. It's bankrupt. The system is one big scam.

So capitalists, neoliberal market fundamentalists, and other right wing ayatollahs, I want some answers to these questions. Now.

If you don't give them, I see no reason why I should give up my membership of the communist party.
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Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1971

Lorenzo - I have no answer for you, but I'll say that the last 70 years have been more about cheap energy exponential growth than anything else, so I don't yet equate capitalism with what is currently happening.
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.

eastbay

roccman

Heineken

Was this announced before or after the stock market closed? Anyone know? I can't tell from the WSJ article.
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seldom_seen · Fission Joined: Apr 12, 2005 Posts: 2062

joewp

jdmartin

It was announced after market close. FDIC people starting passing out flyers to customers at about 3PM Pacific Time which would be 6PM EST. I know the news release wasn't out until I got home after 6.

This is some scary crap that's for sure.
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After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.