Indy Mac
- Thread starter tpraceman
- Start date
SteveA
GT Owner/B.O.D
Kingman
GT Owner
They were definately the best rates in town for construction loans. It's a shame. It's gonna be a while before that market comes around again. :frown
Re IndyMac, if this article from today's WSJ Online doesn't piss you off, nothing will. Schumer should be whipped in public for this!
REVIEW & OUTLOOK
The $4 Billion Senator
July 15, 2008; Page A18
The federal takeover of IndyMac Bank over the weekend could cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion. But Senator Chuck Schumer, who helped to precipitate the collapse by publicizing a letter to the bank's regulator last month, has no remorse.
He was, he says, just doing his job in telling regulators that the bank "could face a collapse," a prophecy that quickly proved to be self-fulfilling. "It's what legislators are supposed to do," the New York Democrat told the Journal. Depositors who spent Monday trying to recover some of their money might beg to differ.
The Office of Thrift Supervision (OTS), whose job it actually was to regulate IndyMac, took a different view. "The immediate cause of the closing," the OTS wrote in a press release, "was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York." The OTS added: "In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts."
Mr. Schumer now argues that OTS was asleep at the switch, and that blaming him is like blaming "the fire on the guy who called 911." In fact, it's blaming the guy who poured on the gasoline. Very few banks, if any, would remain standing for long in the current tense financial environment after a Senator, in effect, told its depositors to run for the exits. In the 1930s, such tipsters were derided as rumormongers and often faced indictment for encouraging depositors to stampede banks.
Only last week, the Securities and Exchange Commission announced an investigation into the role of rumor-peddlers in the run on Bear Stearns. We somehow doubt that Mr. Schumer will receive similar SEC scrutiny for his very similar role in bringing about a liquidity crisis at IndyMac. But he may be more deserving.
Last week, Mr. Schumer's Senate colleague Chris Dodd took the spotlight to insist that everything was fine, just fine, at Fannie Mae and Freddie Mac. For how that turned out, see here. In its own way, Mr. Dodd's declaration was as irresponsible as Mr. Schumer's, given that its goal was to protect the companies from greater regulatory scrutiny of the kind long proposed by the Bush Administration.
Of course, it is much easier to talk a bank out of existence, as Mr. Schumer has now done, than to talk Fannie and Freddie into solvency. And no one is pretending that IndyMac was untroubled before Mr. Schumer wrote his letter. The bank had suffered heavy losses in its mortgage portfolio and was openly seeking new private capital to shore up its balance sheet.
But Mr. Schumer was not content merely to share his profound concern with regulators. He also leaked the June 26 letter to the press – which is more like shouting "fire" in a crowded bank than dialing 911.
REVIEW & OUTLOOK
The $4 Billion Senator
July 15, 2008; Page A18
The federal takeover of IndyMac Bank over the weekend could cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion. But Senator Chuck Schumer, who helped to precipitate the collapse by publicizing a letter to the bank's regulator last month, has no remorse.
He was, he says, just doing his job in telling regulators that the bank "could face a collapse," a prophecy that quickly proved to be self-fulfilling. "It's what legislators are supposed to do," the New York Democrat told the Journal. Depositors who spent Monday trying to recover some of their money might beg to differ.
The Office of Thrift Supervision (OTS), whose job it actually was to regulate IndyMac, took a different view. "The immediate cause of the closing," the OTS wrote in a press release, "was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York." The OTS added: "In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts."
Mr. Schumer now argues that OTS was asleep at the switch, and that blaming him is like blaming "the fire on the guy who called 911." In fact, it's blaming the guy who poured on the gasoline. Very few banks, if any, would remain standing for long in the current tense financial environment after a Senator, in effect, told its depositors to run for the exits. In the 1930s, such tipsters were derided as rumormongers and often faced indictment for encouraging depositors to stampede banks.
Only last week, the Securities and Exchange Commission announced an investigation into the role of rumor-peddlers in the run on Bear Stearns. We somehow doubt that Mr. Schumer will receive similar SEC scrutiny for his very similar role in bringing about a liquidity crisis at IndyMac. But he may be more deserving.
Last week, Mr. Schumer's Senate colleague Chris Dodd took the spotlight to insist that everything was fine, just fine, at Fannie Mae and Freddie Mac. For how that turned out, see here. In its own way, Mr. Dodd's declaration was as irresponsible as Mr. Schumer's, given that its goal was to protect the companies from greater regulatory scrutiny of the kind long proposed by the Bush Administration.
Of course, it is much easier to talk a bank out of existence, as Mr. Schumer has now done, than to talk Fannie and Freddie into solvency. And no one is pretending that IndyMac was untroubled before Mr. Schumer wrote his letter. The bank had suffered heavy losses in its mortgage portfolio and was openly seeking new private capital to shore up its balance sheet.
But Mr. Schumer was not content merely to share his profound concern with regulators. He also leaked the June 26 letter to the press – which is more like shouting "fire" in a crowded bank than dialing 911.
shelbyelite
PERMANENTLY BANNED
- May 10, 2007
- 1
I for one think that 90% of the bad economy is caused by the media focusing on all the negative. Just my .02
Empty Pockets
ex-GT Owner
That doesn't change the fact that on Wall St. "perception IS reality". The Dow, et al, illustrates that.
And, frankly, actual "reality" ain't that good either right now.
Silverbullitt
GT Owner
I'm a former bank examiner.
#1. It is against the law in the State of TX to badmouth a bank. The penalty could be jailtime. I think there is also a federal statute about this.
#2. If it was a commercial bank (which it is not) they could purchase fed funds from the fed to assist in a liquitity problem. This system was setup in the 30s to prevent this from happening. I am talking to a national bank client as I am typing this and they are in agreement with this 100%.
#3. If they actually had a crap portfolio that would cause the bank's capital account to be depleted it is time to say goodbye to that bank. If their loan portfolio was at least of average quality an assumption of the assets would have happened by an existing bank... That didn't happen.
An assumption or acquisition usually fully protects the depositors since the bank technically didn't fail.
I was talking to Spirit about this this morning. If you have over $100,000 in any bank you need to spread it across several banks. I know this could be a pita, but if you have enough cash you can take the hit go ahead and leave your deposit balance above $100,000. If you like your cash as much as I do then move it.
If someone says a bank is about to go down this may or may not be accurate. The actual problem bank list is not public.
The good news is there are about ten to eleven thousand banks in the US. If 90 are problem banks we are generally still in fairly good shape.
#1. It is against the law in the State of TX to badmouth a bank. The penalty could be jailtime. I think there is also a federal statute about this.
#2. If it was a commercial bank (which it is not) they could purchase fed funds from the fed to assist in a liquitity problem. This system was setup in the 30s to prevent this from happening. I am talking to a national bank client as I am typing this and they are in agreement with this 100%.
#3. If they actually had a crap portfolio that would cause the bank's capital account to be depleted it is time to say goodbye to that bank. If their loan portfolio was at least of average quality an assumption of the assets would have happened by an existing bank... That didn't happen.
An assumption or acquisition usually fully protects the depositors since the bank technically didn't fail.
I was talking to Spirit about this this morning. If you have over $100,000 in any bank you need to spread it across several banks. I know this could be a pita, but if you have enough cash you can take the hit go ahead and leave your deposit balance above $100,000. If you like your cash as much as I do then move it.
If someone says a bank is about to go down this may or may not be accurate. The actual problem bank list is not public.
The good news is there are about ten to eleven thousand banks in the US. If 90 are problem banks we are generally still in fairly good shape.
BlackICE
GT Owner
I'm for getting out the whip!!! On a different note have you heard of CDARS? There are many banks associated with it around here. It allows the 1st 100,000 to be FDIC by your bank but allows additional money to be farmed out by your bank thru the Certificate of Deposit Account Registry Service to other banks never to exceed $100,000 per bank thus all funds FDIC insured. Wondering your thoughts on this....:willy My other thought is that if the FDIC has around fifty some billion in reserve...and this little venture could cost up to eight billion....that's a pretty big bite out of the reserve!!! One bank ate around 16%!! :frown
MK2_GT
GTX1 Owner
- Mar 25, 2006
- 795
shelbyelite
PERMANENTLY BANNED
- May 10, 2007
- 1
S592R
GT Owner
- Dec 3, 2006
- 2,800
Mr. Schumer's actions where grossly irresponsible, negligent and I believe caused damage to business that existed beyond that of his district. So where was it in his constituents best interests for him to pass along this little tidbit of private information and where was it solely his decision to release secured information?
I am with Bullet on this one ... lets look at the federal statutes here and insist on prosecution. Acts as such are not only damaging to the individual investors, depositors, and associates but to the overall economy in general. If you notice there where several regional banks that took substantial hits to their stock values and as reported a week or so in the WSJ regional banks NEED capital infusion to offset any weak loans that they have in their holdings. Have we lost sight that in the middle of the real estate boom the federal government was shoving banks down the chute to write mortage paper to less than qualified individuals with the wink and a nod that we'd (gov.) would cover their butts for the risk? Now the gov. is looking around and pointing fingers. Where was it rational to do a 120% first mortage zero cash down? Thats not normal banking ... now companies, individuals etal in good standing with great scores and traditional qualifiying packages can't get financing due to capital problems at the regional and local level. This contraction of lending is causing a longer lasting problem than this short term bad paper mess that will likely be taken care of in the form of short term loans to or high yeild bonds being issued by FM/FRM backed by federal action. (buy that paper if it is issued) But this tightening of credit has a ripple down effect that contracts business in major ways ... which tightens jobs which tightens cashflow ... which shortens spending ... which raises cost of products. Recession brings (historically speaking) inflation caused by the contraction of credit then cash .. since Americans as a general whole save less than any other society on earth we are debt heavy and liquidity short (as a society)
Shelby and all have it largely right .. its about perception ... for now, but perception can become reality, if you are told the lie long enough. Remember that they use to teach that lightening fell from the sky? Well.. they did for 1000's of years until someone invented the high speed camera and proved that it came from the ground up. My point? Like lightening there needs to be a polar change in the way things are handled (civic responsibility) ... and it starts at ground level. Schumer (and many others in DC) need to learn this... your actions are not in the best interest of the people and you serve at the pleasure of the people ... not inspite of them.
Off soapbox .... going to get a beer. :bored
I am with Bullet on this one ... lets look at the federal statutes here and insist on prosecution. Acts as such are not only damaging to the individual investors, depositors, and associates but to the overall economy in general. If you notice there where several regional banks that took substantial hits to their stock values and as reported a week or so in the WSJ regional banks NEED capital infusion to offset any weak loans that they have in their holdings. Have we lost sight that in the middle of the real estate boom the federal government was shoving banks down the chute to write mortage paper to less than qualified individuals with the wink and a nod that we'd (gov.) would cover their butts for the risk? Now the gov. is looking around and pointing fingers. Where was it rational to do a 120% first mortage zero cash down? Thats not normal banking ... now companies, individuals etal in good standing with great scores and traditional qualifiying packages can't get financing due to capital problems at the regional and local level. This contraction of lending is causing a longer lasting problem than this short term bad paper mess that will likely be taken care of in the form of short term loans to or high yeild bonds being issued by FM/FRM backed by federal action. (buy that paper if it is issued) But this tightening of credit has a ripple down effect that contracts business in major ways ... which tightens jobs which tightens cashflow ... which shortens spending ... which raises cost of products. Recession brings (historically speaking) inflation caused by the contraction of credit then cash .. since Americans as a general whole save less than any other society on earth we are debt heavy and liquidity short (as a society)
Shelby and all have it largely right .. its about perception ... for now, but perception can become reality, if you are told the lie long enough. Remember that they use to teach that lightening fell from the sky? Well.. they did for 1000's of years until someone invented the high speed camera and proved that it came from the ground up. My point? Like lightening there needs to be a polar change in the way things are handled (civic responsibility) ... and it starts at ground level. Schumer (and many others in DC) need to learn this... your actions are not in the best interest of the people and you serve at the pleasure of the people ... not inspite of them.
Off soapbox .... going to get a beer. :bored
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So What I am hearing is that my rather large quanity of shares will never be worth enough to buy fuel to the GT rally:confused
GT Tech
Ford GT Team Alumni
My mortgage holder is Indymac bank. Does this mean I don't have to make anymore payments and that my debt will be forgiven? :rofl:banana
Some answers from the FED's
I just got this website that might help bank customers.:rolleyes
No news for us stock loosers.:slap
http://www.fdic.gov/bank/individual/failed/IndyMac.html
I just got this website that might help bank customers.:rolleyes
No news for us stock loosers.:slap
http://www.fdic.gov/bank/individual/failed/IndyMac.html
Empty Pockets
ex-GT Owner
'Depends. Are you a minority and is that mortgaged house of your's located in New Orleans? (NOT Ill...New Orleans?)
B O N Y
MODERATOR & FGT OWNER
Just saw a very attractive short term CD rate from INDY MAC in today's LA Times... oh well, need to build up deposits
S592R
GT Owner
- Dec 3, 2006
- 2,800