*IndyMac Bank Seized by US Amid Intensifying Crisis*
DriftingByTheStorm
Posts: 8,684
*IndyMac Bank Seized by US Amid Intensifying Crisis*
American Free Press
6 hours ago
LOS ANGELES (AFP) — Federally-seized IndyMac Bank was due to reopen Monday after suffering one of the biggest bank closures in US history, as the troubled US mortgage industry struggles to stem further meltdown.
The regulatory Office of Thrift Supervision (OTS) announced Friday it had placed the California-based bank, worth an estimated 32 billion dollars, under the control of the Federal Deposit Insurance Corporation (FDIC).
The mortgage lender, which will reopen as IndyMac Federal Bank, marked the largest bank failure in a year of mortgage and foreclosure crisis highlighted by a surge in defaults and a plunge in housing prices which are rippling through the US economy.
The FDIC stressed Saturday that it was seeking to return the bank to private operation within a few months.
"When we reopen Monday, we will begin the process of marketing this bank to try to get it back into the private sector. We expect that to take about 90 days," FDIC spokesman David Barr said on CNN television.
Barr said the FDIC had already fielded more than 9,000 calls from panicky customers wondering if their money was safe.
FDIC guarantees 100 percent of personal investments up to 100,000 dollars.
The bank was the fifth FDIC-insured failure of the year, and is expected to cost the FDIC between four and eight billion dollars, wiping out as much as 10 percent of its 53-billion-dollar Deposit Insurance Fund.
OTS regulators said the closure was prompted by withdrawals of 1.3 billion dollars made by the bank's customers since June, when doubts were raised publicly about the bank's long-term viability.
"The institution failed today due to a liquidity crisis," OTS director John Reich said Friday.
The decision had been anticipated after IndyMac's share price collapsed. The bank's stock, which traded at more than 28 dollars per share one year ago, closed Friday at just 28 cents per share.
The company announced in the past week it had halted lending and was planning to shed 3,800 jobs, more than half of its work force.
At its peak in 2006, the company, which had been reeling under the foreclosure crisis, employed 10,000 people. The latest layoffs would have reduced the work force to around 3,400.
IndyMac's woes came as US mortgage finance giants Fannie Mae and Freddie Mac were being pushed to the brink as a meltdown in their share prices in the past week raised fears of a government bailout.
The government-chartered, shareholder-owned Fannie Mae and Freddie Mac underpin some five trillion dollars in home loans.
In volatile trade Friday, shares plunged some 50 percent for both firms before a partial recovery. Freddie Mac ended with a loss of three percent and Fannie was down 22 percent, but both have lost around 75 percent since the start of the year.
The two firms said separately that they were "adequately capitalized" and had ample liquidity despite swirling market fears, while Treasury Secretary Henry Paulson on Friday offered no indication of imminent intervention.
"Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission," Paulson said.
IndyMac bank had been sent into freefall after comments by Democratic Senator Charles Schumer last month concerning the bank's health prompted a flood of withdrawals by panicked customers.
Schumer had sent letters to federal regulators, quoted in the Wall Street Journal, saying he was "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac."
The OTS's Reich said in the newspaper that Schumer's comments gave the bank "a heart attack."
Schumer quickly responded: "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today," the Journal quoted him as saying.
Reports said IndyMac's collapse was the second biggest in US history behind the 1984 failure of the 40-billion-dollar Continental Illinois Bank.
Of course, you know i hate being a "fearmonger", but do the math:
ONE bank cost the FDIC nearly TEN PERCENT of its total available funds.
So, Fortis bank is predicting 6,000 bank failures in the US ...
how is that going to work?
What happens when the FDIC is wiped out?
:(
American Free Press
6 hours ago
LOS ANGELES (AFP) — Federally-seized IndyMac Bank was due to reopen Monday after suffering one of the biggest bank closures in US history, as the troubled US mortgage industry struggles to stem further meltdown.
The regulatory Office of Thrift Supervision (OTS) announced Friday it had placed the California-based bank, worth an estimated 32 billion dollars, under the control of the Federal Deposit Insurance Corporation (FDIC).
The mortgage lender, which will reopen as IndyMac Federal Bank, marked the largest bank failure in a year of mortgage and foreclosure crisis highlighted by a surge in defaults and a plunge in housing prices which are rippling through the US economy.
The FDIC stressed Saturday that it was seeking to return the bank to private operation within a few months.
"When we reopen Monday, we will begin the process of marketing this bank to try to get it back into the private sector. We expect that to take about 90 days," FDIC spokesman David Barr said on CNN television.
Barr said the FDIC had already fielded more than 9,000 calls from panicky customers wondering if their money was safe.
FDIC guarantees 100 percent of personal investments up to 100,000 dollars.
The bank was the fifth FDIC-insured failure of the year, and is expected to cost the FDIC between four and eight billion dollars, wiping out as much as 10 percent of its 53-billion-dollar Deposit Insurance Fund.
OTS regulators said the closure was prompted by withdrawals of 1.3 billion dollars made by the bank's customers since June, when doubts were raised publicly about the bank's long-term viability.
"The institution failed today due to a liquidity crisis," OTS director John Reich said Friday.
The decision had been anticipated after IndyMac's share price collapsed. The bank's stock, which traded at more than 28 dollars per share one year ago, closed Friday at just 28 cents per share.
The company announced in the past week it had halted lending and was planning to shed 3,800 jobs, more than half of its work force.
At its peak in 2006, the company, which had been reeling under the foreclosure crisis, employed 10,000 people. The latest layoffs would have reduced the work force to around 3,400.
IndyMac's woes came as US mortgage finance giants Fannie Mae and Freddie Mac were being pushed to the brink as a meltdown in their share prices in the past week raised fears of a government bailout.
The government-chartered, shareholder-owned Fannie Mae and Freddie Mac underpin some five trillion dollars in home loans.
In volatile trade Friday, shares plunged some 50 percent for both firms before a partial recovery. Freddie Mac ended with a loss of three percent and Fannie was down 22 percent, but both have lost around 75 percent since the start of the year.
The two firms said separately that they were "adequately capitalized" and had ample liquidity despite swirling market fears, while Treasury Secretary Henry Paulson on Friday offered no indication of imminent intervention.
"Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission," Paulson said.
IndyMac bank had been sent into freefall after comments by Democratic Senator Charles Schumer last month concerning the bank's health prompted a flood of withdrawals by panicked customers.
Schumer had sent letters to federal regulators, quoted in the Wall Street Journal, saying he was "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac."
The OTS's Reich said in the newspaper that Schumer's comments gave the bank "a heart attack."
Schumer quickly responded: "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today," the Journal quoted him as saying.
Reports said IndyMac's collapse was the second biggest in US history behind the 1984 failure of the 40-billion-dollar Continental Illinois Bank.
Of course, you know i hate being a "fearmonger", but do the math:
ONE bank cost the FDIC nearly TEN PERCENT of its total available funds.
So, Fortis bank is predicting 6,000 bank failures in the US ...
how is that going to work?
What happens when the FDIC is wiped out?
:(
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
Post edited by Unknown User on
0
Comments
Is the FDIC likely to pick up the tab for every bank?
What would happen if some were actually allowed to fail?
I am waiting for the next bank to fail here, to see if the tax payer will foot the bill again like we have with northern rock.
The economy has polarized to the point where the wealthiest 10% now own 85% of the nation’s wealth. Never before have the bottom 90% been so highly indebted, so dependent on the wealthy.
The FDIC does not "pick up the tab" for the bank per se.
That is, it doesn't cover liabilities outside of customer deposits.
FDIC is the Federal Deposit Insurance Corporation,
and it is the arm of the Federal Reserve that is responsible for guaranteeing ALL banking customer desposits up to $100,000 per account.
All banks enrolled in the FDIC program (and ALL commercial banks are enrolled) are required to deposit a portion of their daily monies in to the Federal Reserve on a nightly basis.
This money is supposed to go to the "reserves" of the Federal Reserve System and in theory keeps the system from any chance of collapse.
Unfortuantely the FDIC is ALWAYS woefully under capitalized.
That is what i am saying.
That is what you are asking.
If another dozen large banks fail,
the FDIC will be wiped out.
After that, it's anyone's guess what the next play is.
Probably, the Federal Reserve starts printing up money directly, making some sort of loan to the FDIC, so that it can continue to guarnatee deposits.
The thing is, this is all uncharted territory.
Nothing this catastrophic has ever occured.
Here are a bunch of pretty charts regarding money supply and available credit in the system ... its all contracting:
Monetarists warn of crunch across Atlantic economies -- Telegraph UK
:(
If I opened it now would you not understand?
Shit was at 28 CENTS on friday.
Shit close out at SEVENTEEN CENTS today.
Motherfucker.
I'm not one to bet on banks,
but say i put down $500 on that fucker.
Thats like 3000 shares.
Say it goes up to $3 a share some day.
THATS TEN FUCKING GRAND.
$6 bucks?
Thats like TWENTY GRAND.
Say it goes down to THIRTEEN CENTS first,
motherfucker.
Damn.
Dare me.
Double dare me.
If I opened it now would you not understand?
I TRIPLE dog dare you!
http://bankimplode.com/
and reveling in it's loyalty. It's made by forming coalitions
over specific principles, goals, and policies.
http://i36.tinypic.com/66j31x.jpg
(\__/)
( o.O)
(")_(")
That's not a bad investment. Besides, Phil graham says everything is fine with the economy -- the bank was just a big whiny baby.
lol.
Check out what Bob Chapman has to say about Phil Graham ... it cracks me up.
the best quote ever:
WHOA!
You think he likes the guy?
If I opened it now would you not understand?
That shit is down to 9 CENTS a share!
WHOA!
If I opened it now would you not understand?
buy it up... shit, you might be able to become controlling owner with a $300 investment
Damn.
If i had put EVERYTHING in to Indymac,
i could have realized a 33% increase in my net asset OVERNIGHT!
Up to 12 CENTS a share today.
lol.
If I opened it now would you not understand?
THATs funny.
Today, amidst the monster rally (almost +300 for our little DJIA buddy) (OMFG! The crash is over, we're saved! we're saved!)
around 3pm the Fed minutes from the last FOMC meeting were released.
As soon as it hit the wires the market plunged pretty steep.
ONE minute later the market was in a RALLY.
a minute later it was down.
a minute after that it was up.
ROFL.
THAT was funny too.
If I opened it now would you not understand?