Chinese the biggest holder of Fanny and Freddie bonds. I presume the US will make sure to pay off these bonds if necessary. Stiffing the Chinese might not be wise. I wonder if the Chinese will try to cash in their bonds. That would be really helpful.
When the Iraq War launched on 3/21/03, the Dow was at 8521, 2,400 points lower than it is now. Two weeks prior to that, during the run-up, it bottomed out at 7740.
What about our domestic economy, our national security, the global economy, the financial sector, or global energy security is in relatively better standing today than at the outset of the Iraq War? Nothing, other than the weight of uncertainty over Saddam's capacity to wage a better fight than he did. That uncertainty is more than compensated for by concern over a shooting war with Iran.
I can't think of a rational reason why, under current meta-conditions, we shouldn't shave off at least 2,500 points before Election Day. Anything less by my calculation is a barometric measure of equity market manipulation.
In case you missed this priceless historical moment in the previous thread...
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
Chinese the biggest holder of Fanny and Freddie bonds. I presume the US will make sure to pay off these bonds if necessary. Stiffing the Chinese might not be wise. I wonder if the Chinese will try to cash in their bonds. That would be really helpful.
jim | 07.11.08 - 4:08 pm | #
Maybe we should just offer then new T Bills & Bonds in exchange for agency and tell them its 'Payment In Kind'...
Also, there is a generation of boomers that have accumulated stock for retirement and are in no mood to ride out another storm.
Average Joe | 07.11.08 - 4:24 pm | #
The fact that the market isn't at 5000 now tells you they haven't come to that conclusion - yet.
Yeah, and what happens when the general public realizes that the Fed and the government cannot prevent the pain that's coming? The market still reacts positively to their reassurances and bailout plans, although with less conviction each time.
Watch out below when their credibility disappears entirely.
albrt - they have branches in HI, it's still 10:30 in the morning there (the Papa John's in Maui hasn't even opened yet!) We may have to wait a little londer than usual.
Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
by Kevin Phillips
"Bad money refers to a new phenomenon in wayward megafinancethe emergence of a U.S. economy that is globally dependent and dominated by hubris-driven financial services.
Bad finance" has failed the American people and pointed U.S. capitalism toward a global crisis.
Cite? I'm still showing Dodd saying it was being considered, and another anon source saying Styron & BB were talking about it today. Also, FRE and FNM are sticking to "no comment". I'm thinking the rumor foreshadows the news, in this case.
barely writes:
Fed says NO Discount window to the GSEs. So, a rumor, to juice the markets and trip my stops so others can occupy my positions.
SEC needs to hunt down these rumoristas and prosecute! Any bets whether the SEC started the rumor LOL!
barely | 07.11.08 - 4:26 pm | #
CNBC reporting 'fed declines comment o GSE window story' is that the same as denial?
I remember once Ariel Sharon was once asked a tough question by reporters regarding the March to Beruit... he walked on and didn't say a word. The reporter then asked... " I take that as a 'No Comment'?" Sharon turned and replied, "No 'No Comment' is a comment" then turned back and continued walking.
"Fannie Mae and Freddie Mac are too big to fail and must be kept alive to avoid a crisis of "unspeakable magnitude," a former top Federal Reserve policy-maker said on Friday.
"Clearly they must be supported. They (the U.S. government) cannot allow that amount of assets ... to go into limbo," said William Poole, former president of the Federal Reserve Bank of St. Louis, who retired at the end of March.
"It would produce a worldwide financial crisis of unspeakable magnitude if they were allowed to default," Poole, a long-time critic of the government-sponsored mortgage institutions, told Reuters in an interview.
Fannie Mae and Freddie Mac own or guarantee $5 trillion of debt"
It's clear that F&F won't be allowed to fail, and this fact is already "built in," despite the wild gyrations today on various rumors.
The following excerpt from NYT address this point:
The New York Times reported Friday that senior officials from the Bush administration have considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by Fannie Mae and Freddie Mac, another government-sponsored mortgage finance company that is in trouble.
But one reason that they didnt was because such a law was expected to have little effect: The markets already assumed the guarantee was there.
Guess I wasn't the only one thinking along these lines:
Poole, a 10-year Fed veteran, said the U.S. central bank would probably have the authority to open the discount window to Fannie and Freddie under the "unusual and exigent" circumstances it invoked back in March, when discount window privileges were extended to other investment banks.
But he did not think such a drastic step would be necessary, noting that the Fed could simply purchase the GSEs' debt directly and hold it on the Federal Reserve system's open market portfolio.
The Fed used to do this as as part of the normal course of its business as recently as the 1990s.
Fitch puts $7.9 billion of CDO tranches on watch
updated 32 minutes ago
NEW YORK - Fitch Ratings said Friday it put $7.9 billion of U.S. collateralized-debt obligation CDO tranches on watch for possible downgrade, due to their exposure to securities backed by certain vintages of risky home loans.
The rating action affects 160 rated tranches from 49 transactions. Thirty-six of the tranches are rated "AAA," while 101 additional classes have investment-grade ratings. The remaining 22 tranches have ratings considered to be junk status.
CDOs are complex financial instruments that combine various slices of debt, including residential mortgage-backed securities.
Of the 49 transactions placed on watch, the majority came from CDOs backed by RMBS-related assets issued between 2002 and 2006, Fitch said.
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
The man doesn't have the gravitas to manage a neighborhood MacDonald's.
4:50 p.m.
[FRE] Freddie Mac not under mandate to raise capital in near term
4:49 p.m.
[FRE] Freddie Mac says it's 'adequately capitalized'
4:49 p.m.
[FRE] Freddie Mac says cap cushion above mandated 20% surplus
4:50 p.m.
[FRE] Freddie Mac not under mandate to raise lending standards in near term
4:49 p.m.
[FRE] Freddie Mac says they 'know somone who is adequately capitalized'
4:49 p.m.
[FRE] Freddie Mac says cap cushion gone and has mandated 20% surplus paid to shareholders
The market's mini-recovery was based on the Fed window story.
Right now it seems there's a lot of confusion about what actually happened regarding the window. If this information doesn't get straightened out quickly, we're in for another bad day.
Rupert--bad day?!? Just a bad day?! C'mon! This thing is dragging worse than Riverside! Worse than Ru Paul, although he does look sweet in a bad light.
just got a call from a friend in the banking industry who used to work for Wachovia.......She said word from on high is no loans in pipeline will be approved for a while and the directive is to get deposits up at all costs.......
I've just transferred most of my $$ out of them for the time being. Just to be safe.
Update - 2008-07-11: "The FDIC is in charge" was the verbal announcement ringing through the halls of IndyMac's Pasadena offices. "Everyone show up for work on Monday."
The above information came from an inside source just minutes ago. A formal announcement will be made later today.
Fannie Mae , the largest source of U.S. home funding, said on Friday it has the highest level of surplus capital over its regulatory mandate than at any time in its history.
probert writes:
Fitch puts $7.9 billion of CDO tranches on watch
updated 32 minutes ago
Remember when that would have been big news? Now unless its $300B+... yawn.
I'm amazed how IMB is holding on.
Now, I am curious what discussions will be going on with the Chinese about Freddie and Fannie... they could be the ones dictating down payment requirements... I still think 25% down will be the requirement during the darkest days of this downturn.
MCLEAN, Va., July 11 /PRNewswire-FirstCall/ -- Freddie Mac is adequately capitalized, highly liquid and an essential part of the nation's housing system....
Here's another good line from an article theyieldcurve referenced earlier:
Mr Bush also faced criticism at the summit after Silvio Berlusconi, the Italian Prime Minister, was described in the White House press pack given to journalists as one of the "most controversial leaders in the history of a country known for government corruption and vice".
The White House apologised for what it called "sloppy work" and said an official had simply lifted the characterisation from the internet without reading it.
"As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know."
"We are hopeful that this issue appropriately abates soon."
"Fannie Mae and Freddie Mac are too big to fail and must be kept alive to avoid a crisis of "unspeakable magnitude," a former top Federal Reserve policy-maker said on Friday."
By crisis, do they mean that some I-Banker won't get as big a bonuse as usual? For us regular folks, doesn't it just mean that our kids might be able to afford a house sometime in the future?
Yeah well, these Belgian beer guys are making the biggest mistake of their lives. Bud is America's beer, and the Joe's out here are in no mood for some foreigner buying America's beer. If they go through with this, the King of Beers will be relegated to the role of the Court Jester. You can have some unknown bank fail, and Joe wouldn't know the difference. But you don't mess with the Red, White, and Blue.
If the founding fathers came back, they got up to speed on whats going on in the USA and in the world, they'd probably want to nuke the USA, not anybody else, for what we did to their country.
Scratchy writes:
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
The man doesn't have the gravitas to manage a neighborhood MacDonald's.
Scratchy | 07.11.08 - 4:51 pm | #
If he wasn't our PRESIDENT, I might laugh. He is scary dumb - his lack of common sense is unbelievable.
Weak US dollar hits papal profits
"The Vatican made a loss last year as the weaker dollar reduced the value of donations from the faithful in the United States.
"Almost a quarter of the $79.8m (£40.4m) worth of offerings it received came from collections made in US churches.
"But as the dollar lost 15% of its value against the euro, the Catholic Church's governing body made a loss of 9.1m euros (£7.3m: $14.3m) in 2007.
"That was despite receiving a single anonymous donation of $14.3m."
If you wanna see something cool, bring up <a href="http://www.stockcharts.com>Stock Charts and enter SPX.
Set the range to 3 years on a weekly period. Size: Landscape. Volume: Off. Now, the default moving averages are 50 and 200 (weekly). But add on 520 (52 weeks times 10).
Look where the SPX bounced off. It's attacking the 10 year (weekly) moving average. If SPX closes under it, I believe that will be the first violation since its conception (I'm not sure if this occurred during the secular bear market 1968 - 1982 because the SPX didn't exactly go sideways).
Speed writes:
Then an arrow comes out of nowhere and hits a guy.
"Message for you sir!"
Funny but the relevant movie scene is from "Quigley Down Under." "You idiots! He's probably been out there all morning waiting for two of you to line up like that."
"In April 2008, the CFO approved an increase in authorized staffing for the Division of Resolution and Receiverships (DRR) from 223 to 331. This increase included 39 new permanent positions and 69 non-permanent positions (for up to two years, with possible extensions based upon workload). In addition, the Chairman authorized DRR to increase its planned temporary over-hiring from 19 to 30.1 The increase in permanent staff was based on a reassessment of the appropriate size of the staffing platform needed to maintain readiness and fulfill DRRs ongoing mission in light of current conditions."
"All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution."
4822: that looks more like the symbol used for big storms on weather maps.
Apropos Syria, they do mention that Syria and Iran just made an intelligence-sharing agreement. I was wondering who Iran could count on to help in time of need.
Oh good. My wife would have killed me if I took my iPhone to the Hollywood Bowl just to track Bank Failure Friday.
Scratch IndyMac, points to me. Next is not Wachovia but WaMu. Disasterous foray into the California RRE & CRE markets along with some real expensive real estate purchases of their own as branch locations there.
So what's with IndyMac FSB deposits becoming IndyMac Federal FSB deposits? Someone can explain this? Could FDIC not immediately find a proper receiver for the assets?
Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion. IndyMac Bank, F.S.B. is the fifth FDIC-insured failure of the year.
I guess this week's bank run was more than the OTS could tolerate. How much will this set the USG back ? A lot. Amazing they allowed IMB to continue as long as they did.
"Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion. IndyMac Bank, F.S.B. is the fifth FDIC-insured failure of the year"
FDIC
"On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Conservator. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution. No advance notice is given to the public when a financial institution is closed." FDIC: Failed Bank Information - Bank Closing Information for IndyMac Bank, F.S.B., Pasadena, CA
Yeah, to be honest, the past two days have been for me akin to a Gilmore Girls marathon for the daughter.
Can't miss PC.
And yeah, I've noted teh calendar to check in about 9 PM on Sunday night.
LEH?
BTW, I still think that R2K is in the works to drop and agree with Rich. Once folks realize that the small caps are going to gasp for credit like a smoker on a run, then things will peter out.
Ironic. I checked the lifetime chart on the R2k and saw about where I got in in '98 and rode them up.
And now, I think I might be able to ride them down.
IndyMac Bank, F.S.B., Pasadena, CA, was closed today by the Office of Thrift Supervision. The Federal Deposit Insurance Corporation (FDIC) was named conservator .
Expected losses of between $4 and $8 billion? WTF? Those are billions and the best they can do is 50% estimates of our money? Either way FDIC insurance is about to go up. This alone will probably add 15% of our money as lower deposit rates and higher fees.
You can check out any time you want but you can never leave.
"This institution failed today due to a liquidity crisis, OTS Director John Reich said. Although this institution was already in distress, I am troubled by any interference in the regulatory process.
...
IndyMac was actively seeking to arrange a significant capital infusion or find a buyer. The recent release of the senators letter undermined the public confidence essential for a financial institution and took away the time IndyMac needed to pursue a recovery."
Hey Scav, get a load of this story from Ft Smith , Arkansas! Seems one Sasha Coen (Borat) is filming a new movie in America, and last night in Ft Smith, he pulled off another caper. Seems he advertised an "extreme" fighting contest with $1 beers, and got an overflowing crowd. The set-up continued with a couple of bikini-clad "round girls" leading the fighters into the ring, the usual pre-fight antics, etc...but when the fight began, the two fighter's took up some very unmanly "positions" (dry-humping) than went straight into an open mouth very graphic long, long kiss, and the riot ensued! The crowds respone was exactly what you think it would be in redneck country!
Quotes dug up by Rich Tascano over at the Voice of San Diego:
[House] price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas. Fed Chairman Ben Bernanke, Oct. 20, 2005
[The housing downturn] looks to be a very orderly and moderate kind of cooling. Fed Chairman Ben Bernanke, May 18, 2006
All the signs I look at [show] the housing market is at or near the bottom. Treasury Secretary Henry Paulson, April 20, 2007
I dont see [subprime mortgage market troubles] imposing a serious problem. I think its going to be largely contained. Treasury Secretary Henry Paulson, April 20, 2007
Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited. Fed Chairman Ben Bernanke, May 17, 2007
Syrian Storm Symbol: well, whatever it looks like, Lebanon is now semi-officially western syria again. That, together with the reports that Israel is watching northern border very nervously the last few days...
Indymac and GSE news will be old news come monday noon.
Right? Economy in crapper = war? Didn't someone figure this out already?
On the FDIC website, they say there are "about" $1 billion in uninsured deposits, they will pay them off at 50% and they expect this bank failure to cost $4-8 Billion. I don't get it. Where is FFDIC?
Expected losses of between $4 and $8 billion? WTF? Those are billions and the best they can do is 50% estimates of our money? Either way FDIC insurance is about to go up.
Rob,
I agree with you. They buried the potential losses deep in the press release and in ballpark estimates. But this is a big whack for FDIC and probably ultimately Treasury.
The FDIC is to blame for letting a lot of this crap happen. Corus is not long for this world, and losses there may be in the same ballpark.
"On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Conservator. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution. No advance notice is given to the public when a financial institution is closed.
hmm, 320 visitors online on a Friday night ... I'd say there's a good sized lunatic fringe out there who've been waiting for this one.
Now that we're past the warmup act and the 2nd band, time for the main show ...
WaMu? Or is this a quadruple billing ... the Monsters of FDIC tour, starring IndyMac, WaMu, Wachovia and headlining BoA?
O-joe - I think the FDIC will be at your house...how much have you lost calling the bottom in financials...You might want to get a cup and beg for lose change.
Guys, China is great and all, but they are not and will not be a threat to our global dominance anytime soon. They should not be feared. They should not be admired. Their only advantage has been cheap labor, and now they are facing drastic wage inflation. China is an extremely corrupt, polluted, poverty stricken nation and will not overtake us anytime soon. I am not talking U.S. poverty where you still get a color TV and cable. I am talking third world poverty where you don't have access to clean water or nutritious food.
I guess the media forgets that they are still a closed society without the free flow of information. They are communists after all, but the media seems to have forgotten that fact as well.
The FDIC is to blame for letting a lot of this crap happen...
Ah but the Office of Thrift Supervision says Indy went belly up because of a run caused by statements of a "senior legislator". You see if you keep lying to people, nothing bad will happen. When you tell the truth, it all collapses.
Currently Smoking Cannabis writes:
My dead list has Wells. Was this a bad pick? Why does WaMu get to go down first? Shit...this might cost me a beer.
WaMu has my HELOC and Wells has my 1st if that is any help.
IMO Wells wasn't near as aggressive in their loans and expansion. They also probably have a lot of good paper in their retained portfolio.
I also don't understand the part about uninsured deposits receiving 50 cents on the dollar while the failure is projected to cost the FDIC $4 to $8 billion. So uninsured deposits are kinda, sorta insured? Or it would just seem so harsh to punish depositors who chose to put more than the insured amount into a bank that was circling the drain and paying high rates to attract deposits? Talk about your moral hazard...
SMAKdown print in the WSJ :
"In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said "the immediate cause" of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
IndyMac Bank seized by federal regulators
The Pasadena-based thrift's failure is second in size only to the 1984 failure of Continental Illinois Bank.
By Tom Petruno, Los Angeles Times Staff Writer
July 12, 2008
The federal government said it took control of troubled IndyMac Bank today, in what regulators called the second-largest bank failure in U.S. history
I also don't understand the part about uninsured deposits receiving 50 cents on the dollar while the failure is projected to cost the FDIC $4 to $8 billion. So uninsured deposits are kinda, sorta insured?
The estimate generally covers what's left after accounting for non-brokered deposits, which are usually easily sold and the FDIC therefore isn't usually on the hook for.
If we had a national bank owned by the US Treasury we wouldn't have to worry about getting 50 cents back for our dollar. The thing would be bankrupt-proof.
...the immediate cause of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
Let me guess - otherwise, it would have been business as usual 'til kingdom come. Right.
Dickeylee writes:
Hey Scav, get a load of this story from Ft Smith , Arkansas! Seems one Sasha Coen (Borat) is filming a new movie in America, and last night in Ft Smith, he pulled off another caper. Seems he advertised an "extreme" fighting contest with $1 beers, and got an overflowing crowd. The set-up continued with a couple of bikini-clad "round girls" leading the fighters into the ring, the usual pre-fight antics, etc...but when the fight began, the two fighter's took up some very unmanly "positions" (dry-humping) than went straight into an open mouth very graphic long, long kiss, and the riot ensued! The crowds respone was exactly what you think it would be in redneck country!
Dickeylee | 07.11.08 - 6:44 pm | #
I'm guessing that's actually for the movie they're making for the Bruno character (the gay fashionista from Austria), not Borat.
Schumer did the unthinkable in Washington, he told the truth to the public. And look what happened. It's all, or lots of it, rotten through and through and rests on an edifice of lies.
"Economy in crapper = war? Didn't someone figure this out already?"
Very often - even usually. Not the least problem with war is that it promotes the illusion of control, at the beginning. War is like a black hole - anything can come out of it. Especially these days.
Also watch Russia and Georgia in the Caucasus.
I think it's safe to say that Russia is hopping mad about what it sees as encirclement from West to South. There was a piece in, I think, RIA Novosti a few days ago claiming that Russian mobiles are looking at vulnerability by 2013. I could mention other items, and threats by various parties.
The ME is like a big fuse - connected where, and to what?
jim writes:
If we had a national bank owned by the US Treasury we wouldn't have to worry about getting 50 cents back for our dollar. The thing would be bankrupt-proof.
jim | 07.11.08 - 7:24 pm |
If you read the FDIC press release, we now DO have a bank now owned by the Treasury.
I think BankUnited, a regional bank based in Florida may be next. My escrow account (with way less than 100k) is there and I'm moving it to Mellon. I was talking to a guy who seems to be the branch manager (has a cubicle with glass around it), and he was, like, all optomistic, claiming that since it was (relatively) small and also in bad bad Florida, it was being picked on, and yes, things were not good, but they were seeking funding in various ways and perhaps to be picked up by a hedge fund, well, by golly, they weren't going under in the SHORT run.
Don't you have a lot of those stupid pick-a-pay type loans, sez I. Yes, yes, but that problem is for the long run.
Aren't you competing with many many others for this funding/hedge fund rescue? sez I.
No real answer for me there.
I worked for the "owner" years ago. He was a . . . well, I won't say, for fear his minions will read this and he'll figure out who I am.
Borat is marvelous since he exposes the infinite hypocrisy and gullibility of the average US Joe. Bush couldn't have had two terms were it not for the hypocrisy and gullibility.
"The FDIC is to blame for letting a lot of this crap happen."
The FDIC was the backup regulator, but OTS was the primary regulator. Hard for me to think of a good reason to primarily blame the FDIC.
OTOH, I would blame a lot of the failures on FIRREA, which essentially put the regulatory agencies in competition with each other by allowing banks to easily switch charters. The regulatory agencies became soft as a result; and were reluctant to issue enforcement actions, lest they chance losing some of their institutions. JMHO
Optimistic Joe writes:
All the pessimism I'm reading in these comments is a telling sign of the bottom.
Time to double down on XLF Monday morning.
O-Joe
Optimistic Joe | 07.11.08 - 7:09 pm |
Plus with dollar cost averaging your percent return will only look HALF as terrible!!! BTW, good luck with that. The % upside from such a maneuver may be short lived.
bottom call: when the dow can be had for one ounce of gold
I think Peter Schiff made that call. God. I have Kudlow on the background, and Don Luskin just got props for his call to avoid financials, despite being a rapid bull... my dog could have made that call
Sen. Charles Schumer on Friday blamed IndyMac Bancorp Inc's failure on its main regulator, the Office of Thrift Supervision, and said it should start doing its job.
The problem is WTF Chucky, not of you mother F**kers were doing your jobs and you still aren't unless the job description is Liar, thief or con man. Short Bucky she's going for a ride.
"If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits."
I think this means that the FDIC is paying out 50% of the uninsured deposit now. Uninsured depositors may get more later.
argento: but, did your dog position himself for it?
I didn't say I was the fount of knowledge, information is like bullshit, you get the most good from it when you spread it around. Quit denigrating the truth and start sniping the idiots.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
Geoff | 07.11.08 - 7:22 pm | #
Schumer to John Reich: "Do I have to order the pizzas now too?
Just do your f****** job and none of this would have happened."
:::
If I were Schumer, I'd be damned careful what 'Clubs' I belonged to from now on... NY Democrats that take too keen an interest in the 'regulatory process' seem to have bad things happen to them.
Gee, we have a debate about Fannie & Freddie being insolvent. We have the 2nd largest bank failure in US History. We have a historic housing bust, ongoing. Earnings are declining rapidly. Inflation threatening...
Yeah, makes perfect sense that S&P 500 would be at a PE over 20, as compared to the historic average of 17...
Im just the messenger - dont shoot me. But seriously, I can't believe that the OTS would pin that on Schumer as the immediate cause. It's a ridiculous cop-out and at the same time, ridiculous that Schumer wouldnt know not to say such things - not that it would actually be the cause, but that when it does happen, and he knew well it would, that he'd end up getting to be a scapegoat. Stupid is as stupid does.
Some of the best known U.S. fund firms probably suffered significant losses in this week's meltdown in the stocks of mortgage finance agencies Fannie Mae and Freddie Mac .
Rob Dawg writes:
Dryfly,
You sayin' Schumer could get Wellstoned or Bobby Kennedy'd? Damn and me short tin foil.
Rob Dawg | Homepage | 07.11.08 - 7:53 pm | #
I think you get one free 'Spitzer' then after that the gloves come off.
Geoff, it's not about the truth, it's about accountability. Any lie told loudly and long enough becomes believable. Ask Stalin. His progenitors are in charge now.
That's my point anon. Schumer is a dumb fork for sticking his neck out. He can't be unaware of what a fragile state or financial system is in. If I were anyone close to it, I wouldnt say sh*t. The time for the truth was a long long time ago. That boat has sailed.
let's see if I got this right, and I ain't saying I do
11.100/76 = 146
146 X 5 = 830
the Dow has to Go to there for market equilibrium. Of course the market is fluid and such ever changing, so these numbers will have to rise and fall with the tide of events. If so then earnings have to grow by five times in order to get to a 4,500 number, inflation adjusted perhaps.
Geoff writes:
That's my point anon. Schumer is a dumb fork for sticking his neck out. He can't be unaware of what a fragile state or financial system is in. If I were anyone close to it, I wouldnt say sh*t. The time for the truth was a long long time ago. That boat has sailed.
Geoff | 07.11.08 - 7:58 pm | #
My sis used to work inside DOJ - she doesn't even like to post here or other blogs ANONYMOUSLY. If that doesn't send a chill wind down your blouse I don't know what will.
Sorry, I wasn't meant to be snide at you. Was having a stream of consciousness moment, and the thoughts just ran together. I was calling Luskin a dog, not you.
Some of the best known U.S. fund firms probably suffered significant losses in this week's meltdown in the stocks of mortgage finance agencies Fannie Mae and Freddie Mac .
PIMCO/Gross's flagship Total Return Fund (PTTAX) is holding up so well? I look at Yahoo Finance and its show them at 83% Cash as on Dec 07. Are'nt these guys supposed to be the bond guys, thick with GSE bonds, or do they get the inside scoop and bail out early?
I'll overlook the insult. Portugal has a national bank, the Caixa Geral de Depositos and it works very well. Japan has the Postal Savings bank and it works well too. I wouldn't be scared of something from the time of Andrew Jackson; he's dead and gone you know. Nor would I be scared of "socialism" as are so many stupid Americans who have been brainwashed to their detriment.
If bank solvency rests on a pack of lies, I would think it a good thing that somebody (Schumer) tells the truth. The whole rotten edifice needs to be cleansed.
Jim, it might have advanced IMBs expiration date a few days, but it didnt materially change much when Schumer mentioned them. He just gave them a nudge Id think. Now, I will agree with you somewhat, that when the financial system is in such a precarious position (and it could yet get much more so) rumors can have much more power, and it is theoretically possible that a only slightly weakened victim could come under a major assault and be slaughtered. But I think at this point it still requires a material and well established fact that the weakness is substantial and already in place. Will we get to the point that any institution could be toppled by rumor - heck, I dunno. I would have said no a while back, but now Im not so sure. With level 3 what it is (or is not), you can't really know.
Jim, consider the historical allusion and you might get my point. Those of us who forget history are destined to repeat it. Andy 'By God' Jackson was against a national bank because it was un fucking constitutional. You people need to get a good solid grip on a copy of the constitution and read it. That's what Ron Paul has been trying to get thorough to us for years now. You morons who equivocate and accept the premise of, well maybe we can have a ppp in this set of circumstances, or maybe we can accept tjhis if that happens are the same weenies that got us here in the first place.
Nice point, Jim. Why criticize the guy who told the truth and act like the liars were the ones acting properly?
Now, about Fannie and Freddie have sufficient capital...
Yeah, dry, the Neocons have ruined radical rightism for sensible people. Some idiots like Cheney, McCain, Bush and their ilk of course still are true believers. But I trust they soon will all be gone, gone with the wind of change.
Hey Jim, nice try, but if you think a national bank is going to be better, you must have more confidence in our elected officials than I do. Might not have the same problems, but there'll problems just as big and more insidious.
I happen to be a professional historian so I have to laugh at your "history" lesson. A national bank would not be unconstitutional; it could easily be created. The US Treasury could take deposits as well as take money for notes and bonds. There is nothing in the Constitution that makes government owned businesses unconstitutional. Don't be so stupid and silly.
This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement.Although this institution was already in distress, I am troubled by any interference in the regulatory process.''
This is BS! They chroaked because of lending practices and were caught in the bubble.
You and that traitor and power monger Alexander Hamilton would make for some good company
Your version of history is skewed to the central planning federal elite and not the dirty unwashed populace, so there! And that goes for your fucking cat too!
Yes, nationalize the big banks and pay their employees on federal pay scale.
The problem is not that these bankers did dumb things. No, it is exactly the opposite, these people are too smart. They know that you can screw with the system as much as you like, take your cash, go home before shit hits the fan, and you are essentially safe from reprisals.
You want dull, boring, mediocre bureaucrat-types who like to dot i's and cross t's in your finance industry. You want your smart, competitive people to go into medicine, science, engineering, etc. We have it all backwards.
"In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said "the immediate cause" of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
Say what you want about Chuck, but the fellow can play politics. He makes Reich look every bit like a massive schmuck, and draws first blood on Shrubby in the Blame Game Sweepstakes.
Say what you want about Chuck, but the fellow can play politics. He makes Reich look every bit like a massive schmuck, and draws first blood on Shrubby in the Blame Game Sweepstakes.
You get the feeling the delay game is being played in earnest. Let Pres. Obama deal with it.
Is the housing market going to degrade to hard money lending and a cash market ? Looking that way. Who is going to step up and rescue it? FHA FRE & FNM ?
$750,000 loans with cash out to add to the tipping balance sheets! I think not. LOL!
anon, the first one: if you would read the Wikipedia articles on the First and Second National Banks you would see that both were largely private, not government, institutions. So you don't understand what I was saying. You seem to think apples are oranges. I advocated a bank with no private investors; it would be 100% owned by the US government (Treasury or whatever). Why are you so addlebrained?
Let's be clear here. the only reasons rumors have any power whatsoever is because we no longer fully trust what we are being told. Look at the stock market today. Rumor correct drove down the DJIA below 11,000 and rumor incorrect drove it to positive territory where the floor cheered, actually cheered only to see the average finish way down 90 minute later. This is no longer investing, this is all speculation. Substitute glod or oil for DJIA in the events above and the story still rhymes.
Sadly anon the first you seem to think that insults are a substitute for knowledge. Rather like Limbaugh. You have yet to tell me where the Constitutions says a national bank is unconstitutional. Just because you don't like the idea is hardly of any consequence.
Jim, that's why there are fifty states that voluntarily agreed to be a part of this experiment. Free men are best left unfettered. You imagine it differently? That's your right. We are engaged in the playing out of all this in the marketplace of ideas. You want a concentration of power and authority? Well ask yorself, how's that going?
You want someone other than someone you know in charge (ask the Vermonter from an earlier post)? I don't
These people have proven themselves to be nothing more or less than what they are, people. And as such, I would hold that it would serve us all to the greater common good to disperse that authority and mallow the system another opportunity to become something other than what we currently have, which is rapidly devolving. And, just as greater minds than mine have predicted, it is devolving, more rapidly than any could anticipate.
You got it Rob. The whole system works on confidence in a way, such is the nature of reserve banking. But when confidence turns out to have been placed in a confidence game, it quickly recoils into revulsion, fear, and eventually panic. The more of us realize what a joke our financial system has become, the more fragile it becomes by definition. This is the perfect way to get yourself into another great depression. We've known here for a while, but when the general public no longer has any faith, we've got big problems.
Your "arguments" are simply your personal opinion. I asked you to cite any clause in the US Consitution that made or makes a national bank owned by the US government unconstitutional and you can't. So why don't you, respectfully, shut up?
You and that traitor and power monger Alexander Hamilton would make for some good company
Your version of history is skewed to the central planning federal elite and not the dirty unwashed populace, so there! And that goes for your fucking cat too!
anon, the first one | 07.11.08 - 8:18 pm | #
I think that kind of rant is supposed to end with one of these... yes/no?
Met the Indy boys about a year ago. They were looking to fund large condo deals east coast. Bunch of knucklehead accountant types. By the numbers . no business sense. This is no surprise.
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States;
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
To provide for the punishment of counterfeiting the securities and current coin of the United States;
To establish post offices and post roads;
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
To constitute tribunals inferior to the Supreme Court;
To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;
To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;
To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;
To provide and maintain a navy;
To make rules for the government and regulation of the land and naval forces;
To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;
To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;
To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings;--And
To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.
Not much there I can see prohibiting OR endorsing a central bank... sort of leaves it up to improvisation.
Ok, since their are no serious barriers to entry for starting your own bank, I'm going to open one that will lend dolors, but will only accept hard assets like food and beer and penicillin as deposits.
Sound like a plan? Don't even need to print money for this. We can credit your debit card.
Uncle Billy, you cannot have my beer. That's mine and according to my own constitution, frail tough it is, I must retain it for my own personal pursuit of happiness.
The constitution does not speak to the powers of the federal government to establish a national bank.
The Tenth Amendment does not prohibit the formation of a national bank (allowed under Article 1 Section 8)......
Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Note that Article 1 Section 8 does not MANDATE a national bank - just allows for one. Big difference.
please keep the comments under 400 on each thread so I can read them over the next year,thanks.
Prediction: IMB today. Deposits to go to WFC.
Perry capitulated to his exec team this morning.
marginally related but of interest:
Chinese the biggest holder of Fanny and Freddie bonds. I presume the US will make sure to pay off these bonds if necessary. Stiffing the Chinese might not be wise. I wonder if the Chinese will try to cash in their bonds. That would be really helpful.
IMB is done! Book it!
Can I get some of this "fed window" action?
"B-52" Ben is holding another cash for trash auction. This oughta be good.
It's quiet out there... too quiet.
It is almost like this blog writes itself.
Any pics of IMB bank runs with lines around the block ?
On the fed window open to FNM and FRE, How did some of the other schemes these clowns tried work out?
Two Words - Super SIV!
When the Iraq War launched on 3/21/03, the Dow was at 8521, 2,400 points lower than it is now. Two weeks prior to that, during the run-up, it bottomed out at 7740.
What about our domestic economy, our national security, the global economy, the financial sector, or global energy security is in relatively better standing today than at the outset of the Iraq War? Nothing, other than the weight of uncertainty over Saddam's capacity to wage a better fight than he did. That uncertainty is more than compensated for by concern over a shooting war with Iran.
I can't think of a rational reason why, under current meta-conditions, we shouldn't shave off at least 2,500 points before Election Day. Anything less by my calculation is a barometric measure of equity market manipulation.
That was a quick round of golf, CR.
Glad that you are back on the job!
In case you missed this priceless historical moment in the previous thread...
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
President George Bush: 'Goodbye from the world's biggest polluter' - Telegraph
I can't think of a rational reason why
I can think of M3 reasons.
Wow! FED saying they haven't even discussed opening the discount window to GSE's...
Who'd that rumor help?
It's quiet out there... too quiet.
Then an arrow comes out of nowhere and hits a guy.
Fffffft!
Uuuuuuh!
The only thing that's different is a generation who thought the dotcom collapse was a once in a genertion sell-off were fooled twice.
Also, there is a generation of boomers that have accumulated stock for retirement and are in no mood to ride out another storm.
Chinese the biggest holder of Fanny and Freddie bonds. I presume the US will make sure to pay off these bonds if necessary. Stiffing the Chinese might not be wise. I wonder if the Chinese will try to cash in their bonds. That would be really helpful.
jim | 07.11.08 - 4:08 pm | #
Maybe we should just offer then new T Bills & Bonds in exchange for agency and tell them its 'Payment In Kind'...
Fed says NO Discount window to the GSEs. So, a rumor, to juice the markets and trip my stops so others can occupy my positions.
SEC needs to hunt down these rumoristas and prosecute! Any bets whether the SEC started the rumor LOL!
Also, there is a generation of boomers that have accumulated stock for retirement and are in no mood to ride out another storm.
Average Joe | 07.11.08 - 4:24 pm | #
The fact that the market isn't at 5000 now tells you they haven't come to that conclusion - yet.
No confirmation on the IndyMac rumors yet? Precious minutes are slipping by.
CR:
i'll help out with seb's equal time, fair&balanced rhetoric.
this is a goodle search of newly opened banks.
new banks chartered - Google Search
crispy & cole,
Yeah, and what happens when the general public realizes that the Fed and the government cannot prevent the pain that's coming? The market still reacts positively to their reassurances and bailout plans, although with less conviction each time.
Watch out below when their credibility disappears entirely.
@The fact that the market isn't at 5000 now tells you they haven't come to that conclusion - yet.
I hear ya.
albrt - they have branches in HI, it's still 10:30 in the morning there (the Papa John's in Maui hasn't even opened yet!) We may have to wait a little londer than usual.
So is Cramer/Dimon going to advocate prosecuting long rumors?
Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
by Kevin Phillips
"Bad money refers to a new phenomenon in wayward megafinancethe emergence of a U.S. economy that is globally dependent and dominated by hubris-driven financial services.
Bad finance" has failed the American people and pointed U.S. capitalism toward a global crisis.
Anyone go to IndyMac today to make a withdrawal ?
barely,
Cite? I'm still showing Dodd saying it was being considered, and another anon source saying Styron & BB were talking about it today. Also, FRE and FNM are sticking to "no comment". I'm thinking the rumor foreshadows the news, in this case.
crispy&cole writes:
Can I get some of this "fed window" action?
Simple - by Countrywide and walk over all that paper and return home w/ bundles of Ts
barely writes:
Fed says NO Discount window to the GSEs. So, a rumor, to juice the markets and trip my stops so others can occupy my positions.
SEC needs to hunt down these rumoristas and prosecute! Any bets whether the SEC started the rumor LOL!
barely | 07.11.08 - 4:26 pm | #
CNBC reporting 'fed declines comment o GSE window story' is that the same as denial?
I remember once Ariel Sharon was once asked a tough question by reporters regarding the March to Beruit... he walked on and didn't say a word. The reporter then asked... " I take that as a 'No Comment'?" Sharon turned and replied, "No 'No Comment' is a comment" then turned back and continued walking.
report on bubble-vision that a fed spokesman denied any discussions between the fed & GSEs.
Is now a good time to remind everyone that the Clinton's publicly went all cash in June of 07, about as close to the top as possible.
Their reason:
To avoid conflict of interest in Hillary's Presidential Campaign.
Hmmmmm, let's see, so Bill's two terms as President and her run for the Senate never prompted this move.
Coincidence?
Convince the average joe.
Just another nugget to restore faith in the fairness of the stock market.
BG: Don't have a link but it's on my Dow ticker; a Fed spokeswoman says there have been no talks with GSEs regarding discount window access.
"report on bubble-vision that a fed spokesman denied any discussions between the fed & GSEs."
Tell that to the treasury market and the dollar, I think they are screaming BS.
"Fannie Mae and Freddie Mac are too big to fail and must be kept alive to avoid a crisis of "unspeakable magnitude," a former top Federal Reserve policy-maker said on Friday.
"Clearly they must be supported. They (the U.S. government) cannot allow that amount of assets ... to go into limbo," said William Poole, former president of the Federal Reserve Bank of St. Louis, who retired at the end of March.
"It would produce a worldwide financial crisis of unspeakable magnitude if they were allowed to default," Poole, a long-time critic of the government-sponsored mortgage institutions, told Reuters in an interview.
Fannie Mae and Freddie Mac own or guarantee $5 trillion of debt"
Is the USG steps in, what happens to the USD?
I could use some discount window cash to short the market some more.
"fed spokesman denied any discussions between the fed & GSEs"
I guess they didn't have much to say to one another today.
There are rumors and there are certainties.
The rumors: Who said what to whom will never be truly known, admitted, or investigated.
The certainty: Whatever the motive by anyone involved, it's certainly not the best interest of the average joe investor.
Inconceivable!
I think Karl Rove started this rumor and I am sure the PResident will fire anyone involved!
Per McDonalds the fed window was opened up to them also...
Per Whimpy (Fed Head) he will gladly take a hamburger today and pay for it on Tuesday...
"I am shocked, shocked to find there are rumors going on here!" LOL
It's clear that F&F won't be allowed to fail, and this fact is already "built in," despite the wild gyrations today on various rumors.
The following excerpt from NYT address this point:
The New York Times reported Friday that senior officials from the Bush administration have considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by Fannie Mae and Freddie Mac, another government-sponsored mortgage finance company that is in trouble.
But one reason that they didnt was because such a law was expected to have little effect: The markets already assumed the guarantee was there.
Fannie’s Unofficial Safety Net: the U.S. - DealBook Blog - NYTimes.com
Guess I wasn't the only one thinking along these lines:
Poole, a 10-year Fed veteran, said the U.S. central bank would probably have the authority to open the discount window to Fannie and Freddie under the "unusual and exigent" circumstances it invoked back in March, when discount window privileges were extended to other investment banks.
But he did not think such a drastic step would be necessary, noting that the Fed could simply purchase the GSEs' debt directly and hold it on the Federal Reserve system's open market portfolio.
The Fed used to do this as as part of the normal course of its business as recently as the 1990s.
Fannie, Freddie must not be allowed to fail: Poole
| Markets
| US Markets
| Reuters
Seems like a red herring to me, but it was good for a quick 150 points or so, so what do I know.
Fitch puts $7.9 billion of CDO tranches on watch
updated 32 minutes ago
NEW YORK - Fitch Ratings said Friday it put $7.9 billion of U.S. collateralized-debt obligation CDO tranches on watch for possible downgrade, due to their exposure to securities backed by certain vintages of risky home loans.
The rating action affects 160 rated tranches from 49 transactions. Thirty-six of the tranches are rated "AAA," while 101 additional classes have investment-grade ratings. The remaining 22 tranches have ratings considered to be junk status.
CDOs are complex financial instruments that combine various slices of debt, including residential mortgage-backed securities.
Of the 49 transactions placed on watch, the majority came from CDOs backed by RMBS-related assets issued between 2002 and 2006, Fitch said.
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
The man doesn't have the gravitas to manage a neighborhood MacDonald's.
It's quiet out there... too quiet.
Then an arrow comes out of nowhere and hits a guy.
Fffffft!
Uuuuuuh!
Wall Street IS starting to remind me of the end of "Aguirre, the Wrath of God..."
Then an arrow comes out of nowhere and hits a guy.
"Message for you sir!"
Rumors are not true until officially denied... and the Fed just denied The Bailout.
What's another $5 trillion between friends? Hello $5+ a gallon gas and worthless dollars!
4:50 p.m.
[FRE] Freddie Mac not under mandate to raise capital in near term
4:49 p.m.
[FRE] Freddie Mac says it's 'adequately capitalized'
4:49 p.m.
[FRE] Freddie Mac says cap cushion above mandated 20% surplus
@mal
" "Aguirre, the Wrath of God...""
"Fitzcarraldo" is another great filmic example of
a hero hoisted to the top of an economic dream,
only to be confounded by primal forces.
"Life is only a characture of Grand Opera" -
Brian Sweeney Fitzgerald
Fitzcarraldo? You don't have to go that far afield. We have "Wall Street," and it comes with fries.
"Freddie Mac says conservatorship talk not accurate"
Freddie Mac says conservatorship talk not accurate
| Reuters
4:50 p.m.
[FRE] Freddie Mac not under mandate to raise lending standards in near term
4:49 p.m.
[FRE] Freddie Mac says they 'know somone who is adequately capitalized'
4:49 p.m.
[FRE] Freddie Mac says cap cushion gone and has mandated 20% surplus paid to shareholders
Looks like I picked the wrong week to quit Oxycontin.
The market's mini-recovery was based on the Fed window story.
Right now it seems there's a lot of confusion about what actually happened regarding the window. If this information doesn't get straightened out quickly, we're in for another bad day.
Fed to FRE--would you like to super size that for an extra fifty basis points?
LEH, IMB, and WM this weekend!
Pizza town!
Rupert--bad day?!? Just a bad day?! C'mon! This thing is dragging worse than Riverside! Worse than Ru Paul, although he does look sweet in a bad light.
just got a call from a friend in the banking industry who used to work for Wachovia.......She said word from on high is no loans in pipeline will be approved for a while and the directive is to get deposits up at all costs.......
I've just transferred most of my $$ out of them for the time being. Just to be safe.
Is the USG steps in, what happens to the USD?
Barley | 07.11.08 - 4:43 pm | #
Who cares what happens to the USD... where would we find enough pizzas?
"the directive is to get deposits up at all costs......."
If the govt. would let me have retirement funds with no penalties, I make could a deposit or two...
Tom Stone writes:
please keep the comments under 400 on each thread so I can read them over the next year,thanks.
Tom Stone | 07.11.08 - 4:07 pm | #
Though I'm fine with 200 of those comments being from Anonymouse. He has been spot-on lately.
When i read "Making Money" by Terry Pratchett earlier this year I though it was satire.Live and learn.
From mortgage implode-o-meter:
Update - 2008-07-11: "The FDIC is in charge" was the verbal announcement ringing through the halls of IndyMac's Pasadena offices. "Everyone show up for work on Monday."
The above information came from an inside source just minutes ago. A formal announcement will be made later today.
Appears the rumor mill is spinning up, three or four already today, one with the effect of adding 100 to the Dow.
Since a little butterfly told me that everything was on topic lately:
Any confirmation on the reports that Israeli Jets are flying around in Iraq?
Fannie Mae , the largest source of U.S. home funding, said on Friday it has the highest level of surplus capital over its regulatory mandate than at any time in its history.
Fannie Mae: highest capital surplus in its history
| Reuters
I need a new keyboard and a new monitor.
"Any confirmation on the reports that Israeli Jets are flying around in Iraq?"
Nice way to start a war with Iran following
Israel back through Iraq with some suicide pilots.
Anon: they meant "human capital"
If we did a head count at their headquarters it would crash the employ-o-meter servers.
ipodius and ahead-of-the-curve, our steadfast voices of reason...
Do you think the latest developments with Fannie & Freddie represent cause for concern yet?
Are the doom-and-gloomers here still a bunch of wack jobs?
Is this just another run-of-the-mill economic hiccup?
Snow Says Fannie Mae, Freddie Mac Followed `Hedge Fund' Model
Jesse's Café Américain
probert writes:
Fitch puts $7.9 billion of CDO tranches on watch
updated 32 minutes ago
Remember when that would have been big news? Now unless its $300B+... yawn.
I'm amazed how IMB is holding on.
Now, I am curious what discussions will be going on with the Chinese about Freddie and Fannie... they could be the ones dictating down payment requirements... I still think 25% down will be the requirement during the darkest days of this downturn.
Got Popcorn?
Neil
Freddie Mac is sitting in dark pools of liquidity:
Expired
MCLEAN, Va., July 11 /PRNewswire-FirstCall/ -- Freddie Mac is adequately capitalized, highly liquid and an essential part of the nation's housing system....
Here's another good line from an article theyieldcurve referenced earlier:
Mr Bush also faced criticism at the summit after Silvio Berlusconi, the Italian Prime Minister, was described in the White House press pack given to journalists as one of the "most controversial leaders in the history of a country known for government corruption and vice".
The White House apologised for what it called "sloppy work" and said an official had simply lifted the characterisation from the internet without reading it.
President George Bush: 'Goodbye from the world's biggest polluter' - Telegraph
"As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know."
"We are hopeful that this issue appropriately abates soon."
Bosch, when they write this chapter in the history books, that's going to be the title.
Rumors...
Iraq denies reports of IAF using its airspace | Iranian - Iran News | Jerusalem Post
Is this a war of rumors? Bernanke & Paulson, angered by the power of "short" rumors are now releasing their own "pump" rumors?
Margin Call: and the epitaph of Dubya's time in office: Goodbye from the world's biggest polluter.
"Fannie Mae and Freddie Mac are too big to fail and must be kept alive to avoid a crisis of "unspeakable magnitude," a former top Federal Reserve policy-maker said on Friday."
By crisis, do they mean that some I-Banker won't get as big a bonuse as usual? For us regular folks, doesn't it just mean that our kids might be able to afford a house sometime in the future?
Oh yeah...this is IT folks!
Prepare to live like gypsies! Get your food!
What's the scrap value of the Statue of Liberty?
I've been wondering about Wachovia, since my checking is there, but I wouldnt take money out unless its over $100k.
Now if INGdirect is going to go under then I might get concerned.
Yeah well, these Belgian beer guys are making the biggest mistake of their lives. Bud is America's beer, and the Joe's out here are in no mood for some foreigner buying America's beer. If they go through with this, the King of Beers will be relegated to the role of the Court Jester. You can have some unknown bank fail, and Joe wouldn't know the difference. But you don't mess with the Red, White, and Blue.
"What's the scrap value of the Statue of Liberty?"
Hopefully more than the scrap value of the document formerly known as the Constitution.
albrt:
That thing is hemp, man. You could probably eat it for 3 grams of protein.
The statue will have to be melted into ammo.
If the founding fathers came back, they got up to speed on whats going on in the USA and in the world, they'd probably want to nuke the USA, not anybody else, for what we did to their country.
Wealth Destruction continues. These are the best of times for those of us on the sidelines with plenty of cash.
Yeah, yeah, some will go ahead and bash the dollar. But I live in America. And both real estate and the stock market here is bought with in dollars.
The dollar may be falling but nowhere near as fast as those other 2 asset classes. And that's where my long term intention for my "cash" is.
I want my primary residence at a huge discount and I want to return all my retirement money back into Spiders and Diamonds.
KEEP GOING DOWN!!!!!!!! WAY DOWN!!!!!!!! GO GO GO
Uncle Billy Vs. Mt. Pelerin | Homepage | 07.11.08 - 5:34 pm | #
This could be bad.
Got gold?
That thing is hemp, man. You could probably eat it for 3 grams of protein.
and hemp seed oil can be used to make bio-diesel. btw, thats industrial hemp, not the hemp that gets people arrested
"If the founding fathers came back, they got up to speed on whats going on in the USA and in the world, they'd probably want to nuke the USA"
Why?
Because they could no longer own slaves?
Because they could no longer commit geoncide on the natives?
Because woman had the same rights as them?
.......
Scratchy writes:
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: "Goodbye from the world's biggest polluter."
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
The man doesn't have the gravitas to manage a neighborhood MacDonald's.
Scratchy | 07.11.08 - 4:51 pm | #
If he wasn't our PRESIDENT, I might laugh. He is scary dumb - his lack of common sense is unbelievable.
good analysis of the "Israel in Iraq" report:
In From the Cold
My dog, we're taking down the pope!
Weak US dollar hits papal profits
"The Vatican made a loss last year as the weaker dollar reduced the value of donations from the faithful in the United States.
"Almost a quarter of the $79.8m (£40.4m) worth of offerings it received came from collections made in US churches.
"But as the dollar lost 15% of its value against the euro, the Catholic Church's governing body made a loss of 9.1m euros (£7.3m: $14.3m) in 2007.
"That was despite receiving a single anonymous donation of $14.3m."
The Founding Fathers would move to Africa, kill anyone they met, and start growing hemp.
Or they'd move to Afghanistan, start growing Opium, and...oh crap.
Damn, I am suffering failure withdrawal! We haven't had a major failure announcement in weeks!
Crispy, have you at least got a rumor link for your earlier post?
No. I am just going off the chatter from the implode-o-meter message boards
When would the FDIC issue a notice for a bank with branches in SoCal?
4822: The omission of any discussion whatsoever on this site (http://www.debka.com) tells me that something is indeed up.
Kishrei Chootz?
"Goodbye from the world's biggest polluter."
If Noam Chomsky concluded a speech with this line, the crowd would solemnly nod at his righteous anger.
But when Bush says it, well... what the hell?
funny how context matters, don't it nanook?
If you wanna see something cool, bring up <a href="http://www.stockcharts.com>Stock Charts and enter SPX.
Set the range to 3 years on a weekly period. Size: Landscape. Volume: Off. Now, the default moving averages are 50 and 200 (weekly). But add on 520 (52 weeks times 10).
Look where the SPX bounced off. It's attacking the 10 year (weekly) moving average. If SPX closes under it, I believe that will be the first violation since its conception (I'm not sure if this occurred during the secular bear market 1968 - 1982 because the SPX didn't exactly go sideways).
Joe Six Pack writes:
...the Joe's out here are in no mood for some foreigner buying America's beer.
Perfooey. What fraction of the Joe's sucking down Dr. Pepper at a NASCAR event know it's a Cadbury Schwepps brand.
Speed writes:
Then an arrow comes out of nowhere and hits a guy.
"Message for you sir!"
Funny but the relevant movie scene is from "Quigley Down Under." "You idiots! He's probably been out there all morning waiting for two of you to line up like that."
What fraction of Joe's suck down Dr. Peppers?
Only slightly off topic:
"In April 2008, the CFO approved an increase in authorized staffing for the Division of Resolution and Receiverships (DRR) from 223 to 331. This increase included 39 new permanent positions and 69 non-permanent positions (for up to two years, with possible extensions based upon workload). In addition, the Chairman authorized DRR to increase its planned temporary over-hiring from 19 to 30.1 The increase in permanent staff was based on a reassessment of the appropriate size of the staffing platform needed to maintain readiness and fulfill DRRs ongoing mission in light of current conditions."
FDIC: Chief Financial Officer's (CFO) Report to the Board
Actually, why don't I just post <a href="http://img387.imageshack.us/my.php?image=holyshitcz3.png>an image of it.
Bloomberg just reported OTS shuts IMB.
investor guy: there was an article a month or two ago about fdic bringing back the old timers that handled rtc.
I think we all should partake in some ethanol-laden liquidity tonight while we anticipate a couple of days of simmering in gloom.
Enjoy the weekend everyone!
@Uncle Billy
Yes, I also checked Debka.com and
found no mention of that story.
Did you notice the
design of the Lebanese
Syrian Social Nationalist Party (SSNP)
emblem, a stylized swastika?
Just to verify I went to the SSNP's
main site: Syrian Social Nationalist Party
DONE!!!!!!!!!
WAtch list updated!!!!!
We have our friday failure boys (& girls)
FDIC: Failed Bank Information - Bank Closing Information for IndyMac Bank, F.S.B., Pasadena, CA
weird:
Yahoo! Finance - Business Finance, Stock Market, Quotes, News
has changed its page layout. Never seen that before. It's almost like they don't want anyone to look at where the Dow ended up...
Check the failed bank link.
indymac is there.
Well, there goes the first FDIC bank, a big one.
NOT TBTF!!!!!!
Someday this war's gonna end....
"All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution."
Der wha?
I guess congratulations are in order - you all brought down a bank!...or something...
PIZZA!!!!!!!
why pizza? I wanted ponies!
4822: that looks more like the symbol used for big storms on weather maps.
Apropos Syria, they do mention that Syria and Iran just made an intelligence-sharing agreement. I was wondering who Iran could count on to help in time of need.
Iranian stock exchange must be on fire right now.
Geoff, I think you meant to say you wanted unicorn ponies with sparkly wings
Party at Angelo's out in Palm Desert.
So those high-yield IndyMac CDs at 4% lasted all of what, a couple weeks?
Mal -- I think that's just the layout Yahoo Finance uses over the weekend.
Ouch:
At the time of closing, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors.
"I'm shocked, shocked to find there is moral hazard going on here!"
I wanted my bank to fail first.... to make sure I got paid.
Oh good. My wife would have killed me if I took my iPhone to the Hollywood Bowl just to track Bank Failure Friday.
Scratch IndyMac, points to me. Next is not Wachovia but WaMu. Disasterous foray into the California RRE & CRE markets along with some real expensive real estate purchases of their own as branch locations there.
So what's with IndyMac FSB deposits becoming IndyMac Federal FSB deposits? Someone can explain this? Could FDIC not immediately find a proper receiver for the assets?
La Times has a story up now with come details...
At the time of closing, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors.
Hmmm. That looks kinda deflationary to me.
@Uncle Billy
Yes, it does look like a hurricane, but the weather symbol has two nor four spikes.
It uses red, black and white, like some versions of the Nazi flag.
The points of the "hurricane" are in similar orientation to the legs of the Nazi symbol.
I found this website that explains the emblem in peaceful terms, but they seem like BS.
for example: Yahoo! GeoCities: Get a web site with easy-to-use site building tools.
We are entering dark times.
Well, I thought all we had here tonight was beer, but if the sparkle ponies come with single malt, I may change my order. Weekend all.
Where is CR?? Does someone have his password to update this post?
Mmmmm. Conjure is probably salivating over the the prospect of beer fed pony bawls sprinkled with fairy dust.
scotch, please!
254 visitors seems a bit low. I think we may set a record on Sunday night though.
You're poor and it's hot--where else do you have to be?
4822: I'm more worried about the fascism we face right here (or the fascism we will be facing soon if we don't play our cards right).
Looks like they're promising at least 50 cents on the dollar for uninsured deposits - seems generous to me.
Uncle Billy - WORTH VIEWING. I AGREE ABOUT THE FACISM (she is NOT a bimbo!):
YouTube - Talk - Naomi Wolf - The End of America
from the press release:
Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion. IndyMac Bank, F.S.B. is the fifth FDIC-insured failure of the year.
Anonymouse:
Love the file name.
Thanks.
American Banker talked about what the FDIC is going to go through with Indymac last night:
Huge FDIC Hit Seen If IndyMac Collapses - American Banker Article
Interesting that the FHLB have priority over the FDIC as far as assets.
I guess this week's bank run was more than the OTS could tolerate. How much will this set the USG back ? A lot. Amazing they allowed IMB to continue as long as they did.
"Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion. IndyMac Bank, F.S.B. is the fifth FDIC-insured failure of the year"
FDIC
"On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Conservator. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution. No advance notice is given to the public when a financial institution is closed."
FDIC: Failed Bank Information - Bank Closing Information for IndyMac Bank, F.S.B., Pasadena, CA
Yeah, to be honest, the past two days have been for me akin to a Gilmore Girls marathon for the daughter.
Can't miss PC.
And yeah, I've noted teh calendar to check in about 9 PM on Sunday night.
LEH?
BTW, I still think that R2K is in the works to drop and agree with Rich. Once folks realize that the small caps are going to gasp for credit like a smoker on a run, then things will peter out.
Ironic. I checked the lifetime chart on the R2k and saw about where I got in in '98 and rode them up.
And now, I think I might be able to ride them down.
BTW, is it too late to short IMB?
That SSNP flag could be a ninja throwing star. Hmm, Nazi Ninja? Time to invade.
IndyMac Bank, F.S.B., Pasadena, CA, was closed today by the Office of Thrift Supervision. The Federal Deposit Insurance Corporation (FDIC) was named conservator .
FDIC: Press Releases - PR-56-2008 7/11/2008
Expected losses of between $4 and $8 billion? WTF? Those are billions and the best they can do is 50% estimates of our money? Either way FDIC insurance is about to go up. This alone will probably add 15% of our money as lower deposit rates and higher fees.
You can check out any time you want but you can never leave.
http://americanbanker.com/media/pdfs/OTS_Closes_IndyMac.pdf
Apologies if the OTS letter was posted before:
"This institution failed today due to a liquidity crisis, OTS Director John Reich said. Although this institution was already in distress, I am troubled by any interference in the regulatory process.
...
IndyMac was actively seeking to arrange a significant capital infusion or find a buyer. The recent release of the senators letter undermined the public confidence essential for a financial institution and took away the time IndyMac needed to pursue a recovery."
Hey Scav, get a load of this story from Ft Smith , Arkansas! Seems one Sasha Coen (Borat) is filming a new movie in America, and last night in Ft Smith, he pulled off another caper. Seems he advertised an "extreme" fighting contest with $1 beers, and got an overflowing crowd. The set-up continued with a couple of bikini-clad "round girls" leading the fighters into the ring, the usual pre-fight antics, etc...but when the fight began, the two fighter's took up some very unmanly "positions" (dry-humping) than went straight into an open mouth very graphic long, long kiss, and the riot ensued! The crowds respone was exactly what you think it would be in redneck country!
So, if this is going to cost the FDIC 4-8 billion dollars, why are the uninsured depositors getting anything back at all?
4822:
Ummm . . . How do you make that into a "stylized" swastika? Why not a stylized circular saw blade? Looks to me like rip-off of the US DOT emblem.
IndyMac Bloomberg piece
You all realize CR wrote this post this morning and configured it to appear at market close, right?
He is always smart, but this was absolutely brilliant.
Wow. Just... wow.
Nothing up on the highly popular IMB report (PRAVDA) yet, but hey, it's still up.
http://www.theimbreport.com/
Indymac is down!
Housing Depression
Nemo writes:
You all realize CR wrote this post this morning and configured it to appear at market close, right?
He is always smart, but this was absolutely brilliant.
Wow. Just... wow.
Yeah, that was because he was canvassing the pizza joints in Pasadena.
Checkered flags for IndyMac.
Never, never forget:
Quotes dug up by Rich Tascano over at the Voice of San Diego:
[House] price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas. Fed Chairman Ben Bernanke, Oct. 20, 2005
[The housing downturn] looks to be a very orderly and moderate kind of cooling. Fed Chairman Ben Bernanke, May 18, 2006
All the signs I look at [show] the housing market is at or near the bottom. Treasury Secretary Henry Paulson, April 20, 2007
I dont see [subprime mortgage market troubles] imposing a serious problem. I think its going to be largely contained. Treasury Secretary Henry Paulson, April 20, 2007
Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited. Fed Chairman Ben Bernanke, May 17, 2007
Syrian Storm Symbol: well, whatever it looks like, Lebanon is now semi-officially western syria again. That, together with the reports that Israel is watching northern border very nervously the last few days...
Indymac and GSE news will be old news come monday noon.
Right? Economy in crapper = war? Didn't someone figure this out already?
On the FDIC website, they say there are "about" $1 billion in uninsured deposits, they will pay them off at 50% and they expect this bank failure to cost $4-8 Billion. I don't get it. Where is FFDIC?
CNN .. just crawling across the bottom of the screen ... IndyMac is toast!!
CRs bankerdome may not haz de internetz but it muzt havz a red phone to de FDIC.
Go long pizza joints and turkish coffee roasters.
Maybe CR's appointment today was in Pasadena...he's moonlighting for FDIC.
FDIC: Failed Bank Information - Bank Closing Information for IndyMac Bank, F.S.B., Pasadena, CA
Booom!
Rob,
I agree with you. They buried the potential losses deep in the press release and in ballpark estimates. But this is a big whack for FDIC and probably ultimately Treasury.
The FDIC is to blame for letting a lot of this crap happen. Corus is not long for this world, and losses there may be in the same ballpark.
Background music for FDIC while they shut down Indymac:
<a href="http://www.youtube.com/watch?v=9gPK_vZRDnM>Shut it down
(Goes good with pizza, too!)
"Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion"
Do I hear 16 ? Can I get a 16 ?
Hey the feds are early. I expected 5pm PST, since IndyMac is on the west coast.
"Hey the feds are early"
They had another meeting to go to at the HQ of FNM...
Corus is not long for this world
I fervently hope so, I've got some QBAUA riding on that puppy.
All the pessimism I'm reading in these comments is a telling sign of the bottom.
Time to double down on XLF Monday morning.
O-Joe
Chuck Schumer is now famous!
"On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Conservator. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA ("assuming institution") a newly chartered full-service FDIC-insured institution. No advance notice is given to the public when a financial institution is closed.
Oh wow...just wow
Schumer is like that cat in the news a couple of years ago, that lived in the hospital, and would curl up next to patients just before they die.
hmm, 320 visitors online on a Friday night ... I'd say there's a good sized lunatic fringe out there who've been waiting for this one.
Now that we're past the warmup act and the 2nd band, time for the main show ...
WaMu? Or is this a quadruple billing ... the Monsters of FDIC tour, starring IndyMac, WaMu, Wachovia and headlining BoA?
"Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion"
4*8= 32 big ones.
Keep telling yourself that OJ
O-joe - I think the FDIC will be at your house...how much have you lost calling the bottom in financials...You might want to get a cup and beg for lose change.
"Maybe CR's appointment today was in Pasadena...he's moonlighting for FDIC"
I think CR went to look at that 51%-off foreclosure in Fontana--the blue one with the chain link fence for $189,900.
Guys, China is great and all, but they are not and will not be a threat to our global dominance anytime soon. They should not be feared. They should not be admired. Their only advantage has been cheap labor, and now they are facing drastic wage inflation. China is an extremely corrupt, polluted, poverty stricken nation and will not overtake us anytime soon. I am not talking U.S. poverty where you still get a color TV and cable. I am talking third world poverty where you don't have access to clean water or nutritious food.
I guess the media forgets that they are still a closed society without the free flow of information. They are communists after all, but the media seems to have forgotten that fact as well.
53B - 8B = 44B [?](remaining funds@fdic).
I hope 8B includes whocouldhaveknown estimates as well.
China, communists? How do you figure?
My dead list has Wells.
Was this a bad pick?
Why does WaMu get to go down first?
Shit...this might cost me a beer.
The FDIC is to blame for letting a lot of this crap happen...
Ah but the Office of Thrift Supervision says Indy went belly up because of a run caused by statements of a "senior legislator". You see if you keep lying to people, nothing bad will happen. When you tell the truth, it all collapses.
Currently Smoking Cannabis writes:
My dead list has Wells. Was this a bad pick? Why does WaMu get to go down first? Shit...this might cost me a beer.
WaMu has my HELOC and Wells has my 1st if that is any help.
IMO Wells wasn't near as aggressive in their loans and expansion. They also probably have a lot of good paper in their retained portfolio.
Wow, we printed a new low on the NYSE summation index this week...
NYSE McClellan Oscillator and Summation Index - StockCharts.com
McClellan would be proud. Time for a rally?
Shnaps writes:
at 2:15 the telephone at the Papa John's in Pasadena exploded.
Shnaps | Homepage | 07.11.08 - 2:50 pm | #
Looks like the Schnapster has an inside source at Papa John's
I also don't understand the part about uninsured deposits receiving 50 cents on the dollar while the failure is projected to cost the FDIC $4 to $8 billion. So uninsured deposits are kinda, sorta insured? Or it would just seem so harsh to punish depositors who chose to put more than the insured amount into a bank that was circling the drain and paying high rates to attract deposits? Talk about your moral hazard...
Other than WM, which major bank fails?
I am guessing that Wells Fargo is safe. Bank of America and Citigroup will weather the storm.
I say Wachovia goes down, but thats only because they have a funny name.
And the TED spread continues pushing north...
http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND
Ted would be proud.
SMAKdown print in the WSJ :
"In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said "the immediate cause" of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
IndyMac Bank seized by federal regulators
The Pasadena-based thrift's failure is second in size only to the 1984 failure of Continental Illinois Bank.
By Tom Petruno, Los Angeles Times Staff Writer
July 12, 2008
The federal government said it took control of troubled IndyMac Bank today, in what regulators called the second-largest bank failure in U.S. history
Federal regulators seize crippled IndyMac Bank - Los Angeles Times
I also don't understand the part about uninsured deposits receiving 50 cents on the dollar while the failure is projected to cost the FDIC $4 to $8 billion. So uninsured deposits are kinda, sorta insured?
The estimate generally covers what's left after accounting for non-brokered deposits, which are usually easily sold and the FDIC therefore isn't usually on the hook for.
$4B is a whole lot of wiggle room, though.
If we had a national bank owned by the US Treasury we wouldn't have to worry about getting 50 cents back for our dollar. The thing would be bankrupt-proof.
...the immediate cause of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
Let me guess - otherwise, it would have been business as usual 'til kingdom come. Right.
@Hmmmmm, let's see, so Bill's two terms as President and her run for the Senate never prompted this move.
Uh, Average Joe, Cheney went short the dollar well over a year ago, so I call bullshit on the partisan rant.
Dickeylee writes:
Hey Scav, get a load of this story from Ft Smith , Arkansas! Seems one Sasha Coen (Borat) is filming a new movie in America, and last night in Ft Smith, he pulled off another caper. Seems he advertised an "extreme" fighting contest with $1 beers, and got an overflowing crowd. The set-up continued with a couple of bikini-clad "round girls" leading the fighters into the ring, the usual pre-fight antics, etc...but when the fight began, the two fighter's took up some very unmanly "positions" (dry-humping) than went straight into an open mouth very graphic long, long kiss, and the riot ensued! The crowds respone was exactly what you think it would be in redneck country!
Dickeylee | 07.11.08 - 6:44 pm | #
I'm guessing that's actually for the movie they're making for the Bruno character (the gay fashionista from Austria), not Borat.
Schumer did the unthinkable in Washington, he told the truth to the public. And look what happened. It's all, or lots of it, rotten through and through and rests on an edifice of lies.
"Economy in crapper = war? Didn't someone figure this out already?"
Very often - even usually. Not the least problem with war is that it promotes the illusion of control, at the beginning. War is like a black hole - anything can come out of it. Especially these days.
Also watch Russia and Georgia in the Caucasus.
I think it's safe to say that Russia is hopping mad about what it sees as encirclement from West to South. There was a piece in, I think, RIA Novosti a few days ago claiming that Russian mobiles are looking at vulnerability by 2013. I could mention other items, and threats by various parties.
The ME is like a big fuse - connected where, and to what?
Calm must prevail - speaking of the unspeakable.
jim writes:
If we had a national bank owned by the US Treasury we wouldn't have to worry about getting 50 cents back for our dollar. The thing would be bankrupt-proof.
jim | 07.11.08 - 7:24 pm |
If you read the FDIC press release, we now DO have a bank now owned by the Treasury.
Where's Hank "it's going to tank" Paulson?
I think BankUnited, a regional bank based in Florida may be next. My escrow account (with way less than 100k) is there and I'm moving it to Mellon. I was talking to a guy who seems to be the branch manager (has a cubicle with glass around it), and he was, like, all optomistic, claiming that since it was (relatively) small and also in bad bad Florida, it was being picked on, and yes, things were not good, but they were seeking funding in various ways and perhaps to be picked up by a hedge fund, well, by golly, they weren't going under in the SHORT run.
Don't you have a lot of those stupid pick-a-pay type loans, sez I. Yes, yes, but that problem is for the long run.
Aren't you competing with many many others for this funding/hedge fund rescue? sez I.
No real answer for me there.
I worked for the "owner" years ago. He was a . . . well, I won't say, for fear his minions will read this and he'll figure out who I am.
Damn. So Wells was a bad bet.
At least I nailed Freddie, Fannie, IndyMac, and Countrywide. I missed Bear completely and will probably pony up the beer.
I hope a beer doesn't cost $500 or 10 cents by the time this is played.
Borat is marvelous since he exposes the infinite hypocrisy and gullibility of the average US Joe. Bush couldn't have had two terms were it not for the hypocrisy and gullibility.
Pavel Chichikov: Spot on, dude. Russia has been ignored by most folks and they are itching to reclaim their former glory.
Watch China too. They are the world's policeman of the future.
"The FDIC is to blame for letting a lot of this crap happen."
The FDIC was the backup regulator, but OTS was the primary regulator. Hard for me to think of a good reason to primarily blame the FDIC.
OTOH, I would blame a lot of the failures on FIRREA, which essentially put the regulatory agencies in competition with each other by allowing banks to easily switch charters. The regulatory agencies became soft as a result; and were reluctant to issue enforcement actions, lest they chance losing some of their institutions. JMHO
If you read the FDIC press release, we now DO have a bank now owned by the Treasury
Yeah but it's not going to keep it; it's going to put lipstick on the pig and sell it again to greedy fools.
I'm putting money on WAMU to win, Nat City to place and Wachovia to show.
Optimistic Joe writes:
All the pessimism I'm reading in these comments is a telling sign of the bottom.
Time to double down on XLF Monday morning.
O-Joe
Optimistic Joe | 07.11.08 - 7:09 pm |
3102
For any FDIC folks reading, I highly recommend Petrillo's. Best pizza anywhere:
833 E Valley Blvd
San Gabriel, CA 91776
(626) 280-7332
IndyMac seized by U.S. Regulators Amid Cash Crunch
IndyMac Seized by U.S. Regulators Amid Cash Crunch (Update4) - Bloomberg.com
Forget years of bad loans - its all Schumers fault cuz he said they would fail last week!
SCHUUUUUUUUUUMMMMMMMER!!! shakes fist
Jim writes that we need a national bank
once more, what a moron
the most idiotic statement made since the first administration of Andrew Jackso
bottom call: when the dow can be had for one ounce of gold
What's the Wright B say about all this credit market collapse stuff ?
Optimistic Joe writes:
All the pessimism I'm reading in these comments is a telling sign of the bottom.
Time to double down on XLF Monday morning.
O-Joe
Optimistic Joe | 07.11.08 - 7:09 pm |
Plus with dollar cost averaging your percent return will only look HALF as terrible!!! BTW, good luck with that. The % upside from such a maneuver may be short lived.
bottom call: when the dow can be had for one ounce of gold
I think Peter Schiff made that call. God. I have Kudlow on the background, and Don Luskin just got props for his call to avoid financials, despite being a rapid bull... my dog could have made that call
Sen. Charles Schumer on Friday blamed IndyMac Bancorp Inc's failure on its main regulator, the Office of Thrift Supervision, and said it should start doing its job.
Sen. Schumer blames OTS for IndyMac's failure
| Reuters
The problem is WTF Chucky, not of you mother F**kers were doing your jobs and you still aren't unless the job description is Liar, thief or con man. Short Bucky she's going for a ride.
Goodbye, Indymac, good friend...
That was my first big payoff on puts, or was it KBH? I think I did two rounds with IndyMac.
Any idea how to find the list of banks operating under MOU's?
Hey ease up guys, I think O-Joe was actually making a joke. An O-Joke....
Glad to see he's keeping his sense of humor while watching the carnage in his portfolio...
anon, the first one writes:
bottom call: when the dow can be had for one ounce of gold
anon, the first one | 07.11.08 - 7:42 pm | #
Wow, my portfolio would look great if that was the case!! But I hope you're wrong, nonetheless.
From FDIC press release:
"If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits."
I think this means that the FDIC is paying out 50% of the uninsured deposit now. Uninsured depositors may get more later.
argento: but, did your dog position himself for it?
I didn't say I was the fount of knowledge, information is like bullshit, you get the most good from it when you spread it around. Quit denigrating the truth and start sniping the idiots.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
Geoff | 07.11.08 - 7:22 pm | #
Schumer to John Reich: "Do I have to order the pizzas now too?
Just do your f****** job and none of this would have happened."
:::
If I were Schumer, I'd be damned careful what 'Clubs' I belonged to from now on... NY Democrats that take too keen an interest in the 'regulatory process' seem to have bad things happen to them.
Weekly update on the P/E ratios of the major indexes (from the $WSJ Market Data Center):
Dow = 75.95
Nasdaq = 27.76
Russell 2K = 72.35
S&P 500 = 20.35
This is based on Trailing Twelve Months earnings.
Gee, we have a debate about Fannie & Freddie being insolvent. We have the 2nd largest bank failure in US History. We have a historic housing bust, ongoing. Earnings are declining rapidly. Inflation threatening...
Yeah, makes perfect sense that S&P 500 would be at a PE over 20, as compared to the historic average of 17...
Dryfly,
You sayin' Schumer could get Wellstoned or Bobby Kennedy'd? Damn and me short tin foil.
only a certified functional illiterate would stake an equity position before the S & P PE went to five!
Im just the messenger - dont shoot me. But seriously, I can't believe that the OTS would pin that on Schumer as the immediate cause. It's a ridiculous cop-out and at the same time, ridiculous that Schumer wouldnt know not to say such things - not that it would actually be the cause, but that when it does happen, and he knew well it would, that he'd end up getting to be a scapegoat. Stupid is as stupid does.
Some of the best known U.S. fund firms probably suffered significant losses in this week's meltdown in the stocks of mortgage finance agencies Fannie Mae and Freddie Mac .
Top funds may have lost $4 bln on Freddie, Fannie this week
| Reuters
Say it ain't so. Boys you better dump those oil stocks and double down on Fanny and her fat little bro Freddie. HAAAaaaaaaaaaaaaaaaaa
Rob Dawg writes:
Dryfly,
You sayin' Schumer could get Wellstoned or Bobby Kennedy'd? Damn and me short tin foil.
Rob Dawg | Homepage | 07.11.08 - 7:53 pm | #
I think you get one free 'Spitzer' then after that the gloves come off.
Geoff, it's not about the truth, it's about accountability. Any lie told loudly and long enough becomes believable. Ask Stalin. His progenitors are in charge now.
Dryfly, RobDawg, excuse me? Wasn't that ET?
"Ell-ee-ott, phone home,..."
Damned rumors... you just can't trust 'em.
Ha ha ha ha ha ha ha ha.
Next time let's start a 'pizza pool' and bet which local joint will sell the most on takeover weekend.
That's my point anon. Schumer is a dumb fork for sticking his neck out. He can't be unaware of what a fragile state or financial system is in. If I were anyone close to it, I wouldnt say sh*t. The time for the truth was a long long time ago. That boat has sailed.
let's see if I got this right, and I ain't saying I do
11.100/76 = 146
146 X 5 = 830
the Dow has to Go to there for market equilibrium. Of course the market is fluid and such ever changing, so these numbers will have to rise and fall with the tide of events. If so then earnings have to grow by five times in order to get to a 4,500 number, inflation adjusted perhaps.
I doubt my numbers and welcome discussion.
Geoff writes:
That's my point anon. Schumer is a dumb fork for sticking his neck out. He can't be unaware of what a fragile state or financial system is in. If I were anyone close to it, I wouldnt say sh*t. The time for the truth was a long long time ago. That boat has sailed.
Geoff | 07.11.08 - 7:58 pm | #
My sis used to work inside DOJ - she doesn't even like to post here or other blogs ANONYMOUSLY. If that doesn't send a chill wind down your blouse I don't know what will.
anon, the first one:
Sorry, I wasn't meant to be snide at you. Was having a stream of consciousness moment, and the thoughts just ran together. I was calling Luskin a dog, not you.
Some of the best known U.S. fund firms probably suffered significant losses in this week's meltdown in the stocks of mortgage finance agencies Fannie Mae and Freddie Mac .
PIMCO/Gross's flagship Total Return Fund (PTTAX) is holding up so well? I look at Yahoo Finance and its show them at 83% Cash as on Dec 07. Are'nt these guys supposed to be the bond guys, thick with GSE bonds, or do they get the inside scoop and bail out early?
Well, given the driveby of fannie and freddie and the failure of indymac, I think the housing bill is a lock to pass.
Whatever they need to prop the finances of housing, they are going to get.
Now, shrub ain't gonna veto anything.
TAF open for fannie and freddie on monday to driveby the shorts.
Nothing but cruelty in this market.
As for Shumer, gee state the obvious, get in trouble.
CR had better shut down this blog pronto.
We have successfully predicted most of this.
Now, repeat after me, Fannie and Freddie will not fail, for if they do, money printing will ensue on a scale that can not be fathomed.
Someday this war's gonna end...
once more, what a moron
I'll overlook the insult. Portugal has a national bank, the Caixa Geral de Depositos and it works very well. Japan has the Postal Savings bank and it works well too. I wouldn't be scared of something from the time of Andrew Jackson; he's dead and gone you know. Nor would I be scared of "socialism" as are so many stupid Americans who have been brainwashed to their detriment.
If bank solvency rests on a pack of lies, I would think it a good thing that somebody (Schumer) tells the truth. The whole rotten edifice needs to be cleansed.
Sebastian
my cat read your post from 4 threads down about how CR is so unfair.
she reads everything you write and wants to have your baby
Nor would I be scared of "socialism" as are so many stupid Americans who have been brainwashed to their detriment.
jim | 07.11.08 - 8:04 pm | #
The neocons were the best thing to ever happen to 'socialism'. It'll be the new black.
Oh and we won't be fooled again... yadda yadda.
Was today''s discount window a stick save, and then coach Ben pulled the goalie?
Jim, it might have advanced IMBs expiration date a few days, but it didnt materially change much when Schumer mentioned them. He just gave them a nudge Id think. Now, I will agree with you somewhat, that when the financial system is in such a precarious position (and it could yet get much more so) rumors can have much more power, and it is theoretically possible that a only slightly weakened victim could come under a major assault and be slaughtered. But I think at this point it still requires a material and well established fact that the weakness is substantial and already in place. Will we get to the point that any institution could be toppled by rumor - heck, I dunno. I would have said no a while back, but now Im not so sure. With level 3 what it is (or is not), you can't really know.
Jim, consider the historical allusion and you might get my point. Those of us who forget history are destined to repeat it. Andy 'By God' Jackson was against a national bank because it was un fucking constitutional. You people need to get a good solid grip on a copy of the constitution and read it. That's what Ron Paul has been trying to get thorough to us for years now. You morons who equivocate and accept the premise of, well maybe we can have a ppp in this set of circumstances, or maybe we can accept tjhis if that happens are the same weenies that got us here in the first place.
Schumer. Yeah, that's why. If it weren't for Schumer, they'd be OK. Right.
"If bank solvency rests on a pack of lies,
Nice point, Jim. Why criticize the guy who told the truth and act like the liars were the ones acting properly?
Now, about Fannie and Freddie have sufficient capital...
Yeah, dry, the Neocons have ruined radical rightism for sensible people. Some idiots like Cheney, McCain, Bush and their ilk of course still are true believers. But I trust they soon will all be gone, gone with the wind of change.
"Pavel Chichikov: Spot on, dude. Russia has been ignored by most folks and they are itching to reclaim their former glory."
Or survive. The former glory wasn't glorious.
Now, about Fannie and Freddie have sufficient capital...
Yeah I saw that one and am just now picking myself up from the floor.
Hey Jim, nice try, but if you think a national bank is going to be better, you must have more confidence in our elected officials than I do. Might not have the same problems, but there'll problems just as big and more insidious.
I happen to be a professional historian so I have to laugh at your "history" lesson. A national bank would not be unconstitutional; it could easily be created. The US Treasury could take deposits as well as take money for notes and bonds. There is nothing in the Constitution that makes government owned businesses unconstitutional. Don't be so stupid and silly.
sdtfs, finally a voice of reason
and as for former DOJ personnel afraid to post anything, well fuck them too, they are just a different sort of weenie
re Indymac:
This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement.Although this institution was already in distress, I am troubled by any interference in the regulatory process.''
This is BS! They chroaked because of lending practices and were caught in the bubble.
Jim--right back at ya
You and that traitor and power monger Alexander Hamilton would make for some good company
Your version of history is skewed to the central planning federal elite and not the dirty unwashed populace, so there! And that goes for your fucking cat too!
Now who honors the generous severance package IMB agreed to offer its employees only this past Monday ? I think they SOL.
professional historian, is that like being a permanent barnacle?
"? IMB agreed to offer its employees only this past Monday"
Maybe the IMB employees become civil servants and fall under new guidelines.
o wait, it ranks with being a certified golf ball checker
Yes, nationalize the big banks and pay their employees on federal pay scale.
The problem is not that these bankers did dumb things. No, it is exactly the opposite, these people are too smart. They know that you can screw with the system as much as you like, take your cash, go home before shit hits the fan, and you are essentially safe from reprisals.
You want dull, boring, mediocre bureaucrat-types who like to dot i's and cross t's in your finance industry. You want your smart, competitive people to go into medicine, science, engineering, etc. We have it all backwards.
"In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said "the immediate cause" of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich."
Say what you want about Chuck, but the fellow can play politics. He makes Reich look every bit like a massive schmuck, and draws first blood on Shrubby in the Blame Game Sweepstakes.
In the past, the FDIC has effecitvely implicitally guarenteed all uninsured deposits. This time, they are only guarenteeing 50%.
The only way an uninsured depositor will see more than 50% is if the FDIC takes no loss in the matter.
Say what you want about Chuck, but the fellow can play politics. He makes Reich look every bit like a massive schmuck, and draws first blood on Shrubby in the Blame Game Sweepstakes.
You get the feeling the delay game is being played in earnest. Let Pres. Obama deal with it.
We're all historians now.
Is the housing market going to degrade to hard money lending and a cash market ? Looking that way. Who is going to step up and rescue it? FHA FRE & FNM ?
$750,000 loans with cash out to add to the tipping balance sheets! I think not. LOL!
On the Clock--Chuckie never saw a microphone he didn't grab and use.
anon, the first one: if you would read the Wikipedia articles on the First and Second National Banks you would see that both were largely private, not government, institutions. So you don't understand what I was saying. You seem to think apples are oranges. I advocated a bank with no private investors; it would be 100% owned by the US government (Treasury or whatever). Why are you so addlebrained?
Very funny Goldie!!
Right now hard money lenders are that's left to work with in South Florida.
Jim, why do you ignore the constitution?
Wikipedia? Give me a break.
Constitution??? Tell me where the Constitution says a bank owned by the US government is illegal or unconstitutional.
Let's be clear here. the only reasons rumors have any power whatsoever is because we no longer fully trust what we are being told. Look at the stock market today. Rumor correct drove down the DJIA below 11,000 and rumor incorrect drove it to positive territory where the floor cheered, actually cheered only to see the average finish way down 90 minute later. This is no longer investing, this is all speculation. Substitute glod or oil for DJIA in the events above and the story still rhymes.
Sadly anon the first you seem to think that insults are a substitute for knowledge. Rather like Limbaugh. You have yet to tell me where the Constitutions says a national bank is unconstitutional. Just because you don't like the idea is hardly of any consequence.
dryfly wrote:
Nor would I be scared of "socialism" as are so many stupid Americans who have been brainwashed to their detriment.
The neocons were the best thing to ever happen to 'socialism'. It'll be the new black.
...as in "black shirts"...National Socialist Workers Party". Seems they had a savior or "messiah too".
Jim, that's why there are fifty states that voluntarily agreed to be a part of this experiment. Free men are best left unfettered. You imagine it differently? That's your right. We are engaged in the playing out of all this in the marketplace of ideas. You want a concentration of power and authority? Well ask yorself, how's that going?
You want someone other than someone you know in charge (ask the Vermonter from an earlier post)? I don't
These people have proven themselves to be nothing more or less than what they are, people. And as such, I would hold that it would serve us all to the greater common good to disperse that authority and mallow the system another opportunity to become something other than what we currently have, which is rapidly devolving. And, just as greater minds than mine have predicted, it is devolving, more rapidly than any could anticipate.
forgive the typos
You got it Rob. The whole system works on confidence in a way, such is the nature of reserve banking. But when confidence turns out to have been placed in a confidence game, it quickly recoils into revulsion, fear, and eventually panic. The more of us realize what a joke our financial system has become, the more fragile it becomes by definition. This is the perfect way to get yourself into another great depression. We've known here for a while, but when the general public no longer has any faith, we've got big problems.
Your "arguments" are simply your personal opinion. I asked you to cite any clause in the US Consitution that made or makes a national bank owned by the US government unconstitutional and you can't. So why don't you, respectfully, shut up?
You and that traitor and power monger Alexander Hamilton would make for some good company
Your version of history is skewed to the central planning federal elite and not the dirty unwashed populace, so there! And that goes for your fucking cat too!
anon, the first one | 07.11.08 - 8:18 pm | #
I think that kind of rant is supposed to end with one of these... yes/no?
SLAP!!!*
[glove slap across face]
"In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said,
"the immediate cause" of the failure was...the last straw that was placed on the camels back and the previous gazillions straws didn't matter so much.
Tinker belle clapped her hands and agreed.
Uh, I'm going to run away now to the next post's comments.
Met the Indy boys about a year ago. They were looking to fund large condo deals east coast. Bunch of knucklehead accountant types. By the numbers . no business sense. This is no surprise.
Jim, because anybody who resorts to such rude behavior is a moron. Tell me to shut up? Fuck you.
As far as constitutionality of a national bank or central bank or FRB...
Article 1, Section 8:
Not much there I can see prohibiting OR endorsing a central bank... sort of leaves it up to improvisation.
Jim, read the tenth amendment
The constitution does not speak to the powers of the federal government to establish a national bank.
So there. And that goes for your wimp assed cat too!
Ok, since their are no serious barriers to entry for starting your own bank, I'm going to open one that will lend dolors, but will only accept hard assets like food and beer and penicillin as deposits.
Sound like a plan? Don't even need to print money for this. We can credit your debit card.
Uncle Billy, you cannot have my beer. That's mine and according to my own constitution, frail tough it is, I must retain it for my own personal pursuit of happiness.
... and Wells Fargo taking Indy's deposits and associated customers 100% free & clear of the mortgage portfolio ... priceless!
huh, whuh? did you just make that up?
well that will help Wells Fargo get capitalized and get them closer to being solvent.
Jim, read the tenth amendment
The constitution does not speak to the powers of the federal government to establish a national bank.
The Tenth Amendment does not prohibit the formation of a national bank (allowed under Article 1 Section 8)......
Note that Article 1 Section 8 does not MANDATE a national bank - just allows for one. Big difference.
Uncle Billy, yes I did. So there. Sue me.
dryfly, on the farm where I was raised we'd call that used hay.
Oh God. Constitution debate.
Please don't make me brief SCOTUS cases.
o.. the bit about wells fargo. far too much bad information floating around here today.
Toodles. Off to start bank.