Glad We’ve Got That Straight: IndyMac’s Funeral

Nearly as much fun as a shoot-out at a wedding, the figurative handbags were flying at IndyMac’s (IMB) funeral Friday.

 

The director of the Office of Thrift Supervision, John Reich, blamed IndyMac’s failure on comments made in late June by Sen. Charles Schumer [D, NY], who sent a letter to the regulator raising concerns about the bank’s solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a “heart attack.”

 

 

“Would the institution have failed without the deposit run?” Mr. Reich asked reporters. “We’ll never know the answer to that question.”

 

Senator Press Conference?

 

“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,” Sen. Schumer said. “Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.”

 

IndyMac’s failure, with assets of $32 billion, is expected to cost the Federal Deposit Insurance Corp between $4 billion and $8 billion. It was, nominally, the second-largest failure of an FDIC-insured institution since the $40 billion Continental Illinois checked out in 1984. A record sure to topple, and in inflation-adjusted terms, before this is all over.

Crisis Deepens as Big Bank Fails
IndyMac Seized In Largest Bust In Two Decades
by Damian Paletta and David Enrich
The Wall Street Journal Jul. 12 2008

Earlier on NakedShorts:

Obviousness strikes GSEs
Jul. 11 2008

Comments

[notsosmart:]

we have entered a new phase in our goldilock situation-consevative socialism.

2008 Jul 14 10:59 AM

[G-Money:]

This is a cycle. We are again at the beginning of 1976. Problem is the executives were allowed to enjoy the benefits of this downfall. Why are the investors getting the blame when our investment managers were in charge and knowingly allowed to continue purchasing in the face of overwhelming problems looming on the horizon? I gave my money to a manager, I shouldn't be punished because my faith in my manager was miss placed. Not that I knew about it ahead of time, unlike Martha Stewart who had inside information, it would be nice to have that info during these crisis. More banks will fall and now that Washington Mutual has been mentioned, good or not, that will cause undue pressures and have people lining up outside their door wanting their money.

This is not the time to sit by. We need to have these managers be accountable. Their assets should be seized as it was got with ill gotten gains. Anyone caught defrauding should be put to death. Stop the madness, and put the blame were it should be-management, upper management-Executives. They get paid good money to f**K people. I fail to tell the difference between an executive and a whore.

2008 Jul 14 06:25 PM

[User 227477:]

New York Times reported that hedge fund managers have a new champion in their effort to keep legally dodging the taxes the rest of us pay: none other than New York Senator Charles Schumer. Now you know who is Schumer's friend and why he caused the bank run on Indymac. He truly support hedge fund and private equity because they truly support him.

www.nytimes.com/2007/0...

"Large Investor decided to pay a few bucks to a Senator in New York to force the issue."(Prospect Mortgage Backed By Sterling Fund--Private Equity Acquired The Mortgage Branches from Indymac before FDIC takeover)
www.housingwire.com/20.../

"And do remember that there are many investment bankers located in New York, making them pretty influential constituents of Sen. Schumer."
www.pasadenastarnews.c...

"In a Sunday news conference, he said everything in his letter was already known to the public."
If it was already known to the public, what is the reason for his public letter? It is contradict to what he said previouly :"I just bring private message to the public. Do not kill the messanger." What a great liar from time to time!
www.cnn.com/2008/POLIT...

Same thing he did for FRE and FNM, he forced FRE and FNM to buy $145 billion bad loans last September. So his hedge fund friend could short the stock, then his private equity friend could take huge discount to acquire the properties. So obvious criminal acts, but he is still out law and do whatever to harm the American and benefit himself and his friends.

2008 Jul 17 02:54 AM