Sorry, but I have to respond to a serious accusation from a previous thread:
ac sounds like he's channeling Jas.
You born and bred American dopes are all the same.
You're programmed to reject the wisdom I offer because anything that might wake you up out of your stupor is a threat to your masters on Wall Street and Capitol Hill.
Keep telling yourself everything is just fine in your feeble American minds. Nothing can save America from the Greatest Depression that's coming after more than two years of unrestrained Bernankepanky.
Plus you Americans are weak. Not only have your minds atrophied but American men lack the physique to wear clothing that emphasizes (rather than hides) their masculine features. Nothing gives me greater pleasure than the inferiority complex of those who laugh at my skin tight attire and my exposed chest and arms. Apparently my rippling thighs and heaving chest make them feel better about their own flaccid hanging flesh. Sometimes I press my hefty sculted thighs into the flank or buttocks of an adversary that's making an especially absurd or tiresome argument.
This usually sends them into hysterics bringing about the end of the useless dialog.
One day I promise I will have an American for a pet. But I'm wating for them to get a bit smarter so I can teach them a few tricks like fetch and get them to sit on command.
The Kremlin elite will join in sanctions against Iran when it is literally profitable for them to do so and not before. Sen. Schumer is speaking their language when he suggests bribing Russia into joining the boycott of Iran -- to the tune of $3 billion a year. This is the sort of mafia-style proposition they understand. I am sure they will be gratified to see a U.S. senator coming around to their way of doing business: Speak only to the big boss and offer cold, hard cash.
Those sucking from the teat of political masters have no right to indignation should their political masters turn on them. If liberty still existed and the system was fair then a political hack could not destroy the economy.
"Shhh! Quit rocking the boat. There is no greater meaning in life than professional advancement," said the Seventh Day Corporatist.
Then Bernanke said "Let there be liquidity," and there was liquidity.
But, seriously, this could have all probably been avoided had Indymac's lobbyists stepped up to the plate. Let this be a lesson to you other banks... come fundraising time, you know whose coffers to fill.
You're right, Mr. Schumer should have been more general about the public comments he made and not specifically targeted IndyMac. This would have been better:
'The New York Democrat wrote that he is "concerned that All Banks's financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of All Banks or minimize the damage should such a failure occur."'
It used to be that the most dangerous place in the world was between Schumer and a camera. Amazingly enough, that title has passed to Antonio Villaraigosa, mayor of L.A.; I swear, the guy is on TV every damn day!
exactly. Whatever happened to government in the sunshine? The office of thrift supervision should stick to supervising. Who the %$#@ elected them anyway? This will not sit well with the entire Senate.
I guess he could have just said I have every confidence in IndyMac, that's I-N-D-Y-M-A-C, wink wink.
Or maybe "a certain bank that shall remain nameless, but if you look at the comments on CalculatedRisk.blogspot it's number one on the next to fail hit list".
Are you guys serious? Tonight has been one huge disappointment. AC goes from kinda cute and dystopian to drunk and now we are going to blame Schumer? Seriously?! Come on... I remember the original post and all he did was call attention to the fact that they were in trouble. So now our politicians aren't allowed to call by name institutions in trouble? How exactly are we supposed to regulate/know of the problems if saying the name of "he who shall not be named" is a crime. CR is becoming a bit drama filled and ridiculous of late.
I'd like to mention that Reich has been sitting on his ass, and even though Schumer has retard written across his forehead, he is not alone and might even be doing more than many in DC! I have to give him credit for stirring the pot and attempting to be involved, because let's face it Indymac is run by retards and Schumer is trying to call attention to the fact that elected officials need to be doing more and not just talking about how well the economy is doing!
RE: In remarks made to the National Association of Mortgage Brokers, February 6, 2008, OTS Director John M. Reich noted that adjustable-rate mortgage resets are projected to continue at high levels, with an estimated 1.8 million owner-occupied subprime mortgage resetsexpected in 2008 and 2009.
Wells Fargo is the largest producer of government-insured reverse mortgages, with a 21.6% share of the 99,870 loans originated sincethe beginning of October 2006 through August 2007. Financial Freedom Senior Funding Corp., a unit of IndyMac Bancorp Inc. ofPasadena, CA. is second, with a 10.94% share. Third-place Seattle Mortgage has a 2.75% share. (Statistics provided by American Banker,October 1, 2007.)
Conah I agree. Damned if you do, damned if you don't. If he hadn't spoken out people would be saying "where are the politicians who blah blah blah". I also love how nowhere in the rebuttal do they say his allegations were false or exaggerated.
The intent of their plan, the OTS says, is to provide a negative equity position to the original loan holders in an amount equal to what they are giving up by taking the partial pay-off or short sale from the proceeds of the new FHA-guaranteed loan.
In essence, the OTS believes that the FHA backed plan allows for the possibility of a windfall to the borrower down the road, by enabling him to recoup the entire gain on the sale of the property after five years.
Also likely to fail is Bank United (BKUNA), which has 86 branches in Florida.
Its stock is now at 85 cents, down about 97% from the housing bubble days and down 75% from only two weeks ago.
The company is looking to raise $400 million in capital, despite having a market cap of $30 million. If a company has ever pulled off the feat of a raising more than 13 times its market cap during a recession, I'd love to hear about it.
There should be a run on that bank, because depositors with more than 100K in the bank will soon be facing a loss.
The stability of banks with rotten books is not something that is good for our country. One of the several causes for Japan's lost 15 years was the unwillingness of the government to let insolvent banks fail.
If he hadn't spoken out people would be saying "where are the politicians who blah blah blah".
The letter is not the problem, it's the fact he publicized it. He effectively reduced the number of options the regulators had at their disposal. Not that it'll make much difference, still, it's bad form.
Yes, yes..... Schumer wants to point out to the public that Indymac is at great risk and may fail and wonders if someone like Reich is going to do anything, and then Schumer is made out to look like an idiot scapegoat, and take the heat off the mis-managed and botched management of Indymac and the Fed regulators that were charged with regulating!
I think I may be taking sides with Schumer on this and the editorial about a bank run is bullshit, because people should be thinking in terms of alternatives -- because you have puppets like Reich spinning bullshit ideas about negative equity certificates and fantasy island theory.....why the hell isnt that retard doing his job to bust Indymac and pull the rug out from under corrupt people?????
ac- you forgot the crooks! it's gotta include "crooks"
In many ways the crooks are the least interesting of the lot. Their world is a heirarchy of fear, dishonesty, and intimidation/manipulation.
These guys are hardened by years on the street. But one brush of my bare pectorals against their anemic shoulders or a stroke of my biceps against their underdeveloped back muscles usually sends them into a debilitating shock and insecurity that makes most of them psychological invalids and sends them fleeing from a life of crime for good.
But one brush of my bare pectorals against their anemic shoulders or a stroke of my biceps against their underdeveloped back muscles usually sends them into a debilitating shock and insecurity that makes most of them psychological invalids and sends them fleeing from a life of crime for good.
Not to mention the mere sight of your chiseled jawbone.
People like Reich and throughout this Bush administration have been idle all through the political buildout of The Ownership Society and the effort to find ways to pay for The Iraq War. This subprime mess has resulted in chronic decay of the regulation and enforcement efforts that should have been in place to avoid this situation. It is people like Reich that are in positions to regulate and supervise and audit, review and safeguard our banking system -- to reduce risk -- not generate and fuel it! These people that failed taxpayers are like Brown of FEMA during Katrina, i.e, they all do a heck of a job of evading responsibility and they have no accountability and they are in positions of power because of nepotism and they support collusion at the highest levels of government -- and the job they all had, was to look away and not do anything during the subprime era! Now this guy wants to shift the blame to someone that is warning people to get of a shit bank!
Re: These guys are hardened by years on the street.
See also: \tobdurate:
unmoved by persuasion, pity, or tender feelings; stubborn; unyielding.
2.\tstubbornly resistant to moral influence; persistently impenitent: an obdurate sinner.
Limit their options? I would love to see you put in writing how keeping their customers and the Senate in the dark expands their options. Then once you type out a few lines if you still feel like you have a point that isn't totally dickish, hit the submit button.
BTW Indymac is now quoted at 74 cents a share. I don't think not talking about it is going to help save it now.
If bank solvency depends on public gullibility I think we need to change the system.
I am a guardian for my 91 year old mother in the last stages of Alzheimer's. Because I read CR and most of the comments, I have an idea of the poor shape IndyMac is in (but no money there). But I suspect there are less informed, hard working people who didnt know about IndyMac and FDIC insurance limits perhaps because they dont have the time to spend managing assets in addition to their primary job and other family responsibilities. If Schumer's comments causes some of them to find out about FDIC coverage and reduce their elderly parents' exposure, God bless the New York senator.
Yah, Like IMB was about $30 one year ago and now it's 75 cents....hello OTS, FDIC, SEC, FBI, DOJ, FTC, is there anybody home that isn't either retarded or corrupt?
U.S. Treasury Secretary Henry Paulson said on Thursday that inflation was becoming the top economic focus of many countries around the world as oil and food prices take their toll.
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you? It's the free market."
Gordon Gekko
Rant continued: You can bet everyone on Capital Hill who either heard about or received the warning letter made sure that they didn't have exposure to IndyMac. Perhaps readers here would rather Congress keep the information to themselves and let unpaid guardians and trustees suffer the consequences!
Re: A Senator of the United States can make public whatever he wants.
Where were these people a year ago, 2 years ago? We have seen year after year of political polls and ratings that continue to show more and more dis-approval of Congress, The Senate & Bush -- The Collective DC Empire as one failure, i.e, The Worst Group ever to represent America -- The worst leadership in American history, which is an outrage and disgrace which will be ignored this 4th of July -- because people don't give a shit? What is going on?????
So, what did Chuck really tell us with that confidential information??? I think that confidential information suggests that the insiders need time to bail out, before the rubes and Chuck just saw it the other way??
Tim Duy and Mark Thoma have some interesting things to say on "Fed Watch" about the impasse between the Fed's interest rates and emerging market CB's dollar pegs.
"Denying the Great Adjustment, by Tim Duy: ...I tell local audiences that the imbalance represents a very simple reality the US consumes more than it produces, and the excessive consumption is provided by foreign producers. Eventually, maybe tomorrow, maybe years from now, those producers will desire to consume their own domestic output. At that point, US consumption and production will have to fall into line via a possibly painful restructuring. The more painful, the more policymakers will resist."
...
"Consider that the current account deficit will need to correct by some mixture of import compression and export expansion. The weaker Dollar encourages that correction, but Dollar-pegs prevent the full adjustment. But where currency adjustment fails, commodity price adjustment steps in as, for example, higher transportation costs support import competing industries. Indeed, we are learning that cheap oil, not just cheap wages abroad, was the critical force supporting offshoring of US production. "
...
"How long can this process continue? As long as global policymakers are willing to support it. Indeed, it is almost of a game of chicken, with US and emerging market policy makers on a collision course, neither wanting to accept the adjustment, a greater reliance on internal balance, necessitated by excessive US consumption.
The US is not likely to back down soon. We are seeing increasing calls for additional stimulus packages...
With US policy stuck in place, I suspect that emerging markets will take only baby steps toward changing the current dynamic. That leaves the ECB as the force most obviously leaning against the wind. Indeed, until inflation becomes sufficiently uncomfortable that a broader swath of nations finds meaningful policy tightening a necessity, I expect current financial trends to continue."
I think it's damned straight for a public servant like Schumer to lean on a Treasury Dept. bureau -- one that was formed in 1989 specifically in response to the S&L crisis -- to pull up its socks. Seems to me Indymac is done, but that many others may be able to fess up, consolidate and hunker down. This won't get done if our regulatory agencies continue to act as if they're auditioning for Dancing with the Stars.
Plus, if these institutions are going to fail anyway, better they do so on Bush's watch so that blame is correctly apportioned in the public memory. That's good politics.
I would love to see you put in writing how keeping their customers and the Senate in the dark expands their options.
Haven't you been reading FFDIC's posts? There were over 200 banks on the problem list. Going to list every one of them? Schumer could have gotten the same effect for the customers by generalizing the warning to remind everyone what the FDIC limit is.
Right now IndyMac has it's doors open and people have access, a run on the bank, while entertaining for us, doesn't do much good for anybody else.
So, what did Chuck really tell us with that confidential information??
What confidential information? I don't know that Schumer had any. Everybody here says looking at their public financials they're toast. What more info do you need?
"IndyMac, which has suffered huge losses on defaulted mortgage loans, "could face a failure if prescriptive measures are not taken quickly," Schumer wrote.
Uh, wait a minute -- how could Schumer know that? And since when are regulators supposed to tell the public in advance that a particular institution has been earmarked for failure? "
Make no mistake about it: IndyMacs problems were caused by IndyMacs management and no one else," Schumer spokesman Brian Fallon said in an email. "The home loan bank system has an obligation to lend responsibly and police its members. But it has not been doing its job. We have found the only way to get the home loan bank system to act appropriately and positively is to make public the concerns weve already expressed privately."
Ok, so what is he talking about there: home loan bank system????
So now our politicians aren't allowed to call by name institutions in trouble?
Well it seems that it is OK for Wall Street to narc on institutions in trouble to certain political bastions provided they have lots o money to invest.
How FHLBanks Raise Money: FHLBanks issue debt to institutional investors through the Office of Finance. These products are rated Aaa/AAA by Moody's and Standard & Poor's respectively. FHLBank debt is the joint and several liability of all the FHLBanks
A real banking crsis might wake up some people who are still half asleep. I wonder what institutions the Democrats still have on their "hit list". A banking crisis would sure finish off McCain's limping campaign. It would be toast, just like Indymac. It might also bring Washington to its senses about Iraq and our "money down the drain" attempt at empire.
FHLBank Advances. Advance lending is the FHLBanks' main business line. It currently represents about two-thirds of all the FHLBanks assets. These loans, known as advances, are well-collateralized loans used by members to support mortgage lending, community investment and other credit needs of their customers.
FHLBank consolidated obligations are sold to institutional investors through the Office of Finance. The Office of Finance, which handles FHLBank transactions, is able to sell the debt at rates just slightly higher than Treasury bonds because FHLBank products are rated Aaa/AAA by Moodys and Standards and Poors.
The FHLBanks frequently borrow short, primarily in the form of discount notes, while our membership tends to lend long, primarily to fund 15 to 30-year mortgages. At first blush, this may appear to be a term mismatch, but its not. In fact, the FHLBank System intermediates on behalf of its members to reduce term mismatch risk and provide liquidity.
FHLBanks don't fund individual mortgages. They fund mortgage pools. Since these pools are constantly changing, they have no maturity. Consequently, the many term rates FHLBanks issue reflect their member needs, including the advances they use to minimize their own interest rate risk.
A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.
The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today's schemes are often considerably more sophisticated than Ponzi's, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit investor naïveté.
Anonymous writes: "The Senate & Bush -- The Collective DC Empire as one failure, i.e, The Worst Group ever to represent America."
I think it's pretty obvious who's looking after people with money in IndyMac.
Bush and his administration didn't and hadn't issue the warning, a Democratic senator from New York did.
This issue may not matter much to people of substantial means. They have the money to hire someone to look after their elderly parents assets.
I'm never voting for a Republican as long as it empowers our religious whacko friends (both here and abroad) as a side-effect, but I can recognize grandstanding when I see it.
I'm voting with fill-in-the-blank names and voting out anyone in office and then in uncontested selections, I'll write in various cartoon names. I also want to be part of The Super majority, so I will vote, but not for anyone on the ballots! Every last one of them needs to be taken out of office and there is no one going in that is any better!
Roll Call: How they voted on oil tax bill
By The Associated Press Jun 10, 2008
The 51-43 roll call by which the Senate blocked a bill that would have imposed a 25 percent tax on any "unreasonable" profits of the five largest U.S. oil companies.
On this vote, a "yes" vote was a vote in favor of the bill and a "no" vote was a vote to stop its progress. Supporters of the bill fell nine votes short of the 60 needed to prevail.
Voting "yes" were 43 Democrats, six Republicans and two independents.
Voting "no" were two Democrats and 41 Republicans.
"Nothing gives me greater pleasure than the inferiority complex of those who laugh at my skin tight attire and my exposed chest and arms. Apparently my rippling thighs and heaving chest make them feel better about their own flaccid hanging flesh."
Sorry CR - I beg to differ. The level of corruption in the industry, though maybe not criminal, seems so pervasive that we have no other recourse but to call these folks on it. Countrywide, IndyMac et al need to be punished and people need to be warned. The legal system is not capable of dealing with incompetence on this scale. The only weapons we have are gossip and innuendo. These weapons are not precise instruments, but they are effective. If a few people feel outraged (or scared) enough to withdraw their funds and start a run, then I say great job Senator Schumer.
I'm tired of corporations getting away with foolishness. They hide behind the law and never admit responsibility even as they pay off hush money settlements. That's no deterrent. Well, we have options. We can run them out of business.
Let's start naming the mortgage brokers, realtors, loan officers, bankers, securitizers etc BY NAME! They'll never go to jail, maybe we can shame them so they feel the pain they have caused others.
Funny, but I didn't hear all these complaints about the Fed, the bankers, the hedge fund geniuses, the real estate specs, the black helicopters, the loan officers, the real estate gurus, the corrupt Senators only (wow, ten years already?) a few years ago. I remember a NY Times Magazine cover article about how politicians were useless in the New Economy--a 4th of July BBQ, with the politicians drawn like tiny ants at the party, while the newly rich suburbanites were having a blast, enjoying their paper wealth from Yahoo, or whatever.
And today? Come on. This populist backlash is getting ridiculous. Of course, maybe it's another example of the great wisdom of the crowds, now over-shooting to the downside. Who does the blame ultimately belong to? Ourselves. You can't have bubbles without buyers and sellers. You can't have irresponsible regulators without voting for those who believe in an extreme Republican ideology of discrediting the government by appointing morons to lead its executive agencies. (I know, I know, I'm a Republican, too.) You can't be getting killed on your credit card debt, mortgage payment, school loan, wait for it, if you don't live beyond your means.
Greed. Fear. Greed. Panic. Greed. Fear. It's no wonder people can make money trading in the market. It's the same story, over and over and over and over again.
Turn off the TV, calm down, don't let the noise distract you, the End Times are not here, and frankly, if they are, so what? People always deal better with adversity than they think. It's success that makes them crazy. America isn't going anywhere. We're not going to default on our debt. The dollar will eventually strengthen. Sure, we've made mistakes, but I'm not happy listening to a bunch of newly rich Chinese, Russians, Arabs, Indians, or, Jesus, the Europeans (M. Tricky raising rates today) lecture us on our consumption patterns. We've done a hell of a lot more good than bad for the world--so, now, we got a little big-headed, ok, and we'll get a little kick in the a**. Fine. We'll deal with it.
jim notes "If bank solvency depends on public gullibility I think we need to change the system."
In the micro-fractional reserve system, every bank is always subject to a run. We learned this as children as Mr. Drysdale explained to the Clampetts why the Hillbillies could not withdraw their deposits from the bank. During exponential increases all is well. Thereafter the only question is what order the banks fail in.
So you are right. We do need to change the system.
Can't it just be as simple as "some bad guys told him to do it so they could profit from drop in share values, or from the devaluation of the company as a whole to make it a much nicer meal for the rescuer"?
Problem with manipulating stocks is that there is so much noise out there. It's probably very hard to put out some news and pump or kill a stock these days. You need senators and academics and analysts and newspaper reporters to yell louder.
You do understand that there is much manipulation of perception going on right? Right?
The bankers are out to save their own ass. If, through default, it can be made to look like they are "protecting the interests of their hard-working depositors" it is happy coincidence. Meanwhile, the fate of millions is now in doubt through their greed and seeking out short term profits and fees. There is no "one" to blame. The system got cocky and de-regulation allowed them to brew some nasty tea for all of us to drink.
The banks have failed their trust. Now let the chips fall where they may.
but my bet would still be for them to come out of this with the most personal gain and wealth and with their precious egos intact while the less devious are chewed up and spit out as debris...
I'm not quite sure what the point was of Schumer leaking his letter. But it's not like he was lying. Given the current situation, regulators accusing other people of irresponsible conduct strikes me as being a bit much.
Expectation is that ECB will increase interest-rate by 0,25% later today.But perhaps even 0.5 % is possible.Certainly Trichet has been VERY worried about inflation over the past few days.That would be a real shock!
I still don't have clarity on why his airing of his concerns would be "reckless" or "irresponsible" -- to whom and what precisely is the damage done?
Since our taxes are paying to insure these banks, it's our right to be all up in their business. It especially means that we are entitled to have the most public of debates over whether these institutions are healthy. If Schumer were overreacting, Indymac and its bodyguards, I mean, regulators, should have simply ponied up data to the contrary. Instead, they get hysterical about his letter of concern (such hysterics, by the way, do exactly the opposite of assure bank customers)
If these institutions were subject to public discourse and discussion, Indymac might have run itself better, instead of deeply into the Earth's crust.
And screw this 'tude of regulators being "willing" to share. They work for US. If they are not willing and happy to share any information about the banks whose backs we pay dearly to watch, they are corrupt and should be fired.
We have got to stop treating people feeding at our trough like we owe them. And seeing public discourse as a threat.
There was a slight ripple of pre-announcement exticement, then retracement to the open (of EURUSD). We'll see what happens when everyone returns from lunch.
Schumer is on the Senate Banking Committee. If he wants to dig a spur into regulators that he thinks are being dilatory, he could start by thinking up a reason to announce some hearings. Say, inquiring into the various agencies systems for announcing problem institutions to the public, are these systems adequate to the task, etc, or getting some extra testimony on the adequacy of the insurer's capital who knows, perhaps they could use a little more? No names of specific institutions that have publically traded stocks would need to be mentioned.
Being not a banker this is second-hand, but my understanding is that bank failure is more a function of the cash flow gap getting too large, rather than the balance sheet. Since a run is a cash flow event, that does rather suggest that leaking comments like those in the Senator's letter is a bit non-U;p; even if the bank couldn't muddle through if it weren't facing a run, an orderly shutdown would be more fair to depositors as a group, and maybe cheaper to the FDIC, at least in terms of operating cost.
@trader walt
I know it's late in the game but if you're into it try giving your mother up to 2 grams of unradiated turmeric powder on a empty stomach three times a day.
I'm amused at the indignation expressed by management. Amused that IMB, standing at less than 2% of its high less than 2 years ago, can afford any indignation in the first place. If I'd been in charge of this clusterfuck, I'd have changed my name and moved to an undisclosed location.
Investors have fully priced in another quarter-point rate increase to 4.5 percent by the end of the year and most expect a third step by March, Eonia swap contracts show.
Schumer needs to get his profile higher to compete against Clinton for New Yorkers' attention. I guess financial institutions that are in trouble could contribute to his re-election campaign and buy his silence. If that sounds crazy, we live in interesting times and money makes things happen or don't happen.
I have parted with a few bucks the last couple of days. Lets just say some dummy who needed cash just sold me a rather large,7 month old,big screen for less than .20 on the dollar. There are some SMOKING deals around right now...I have zero problems taking advantage of them.
Chris
BTW,A 10 acre lot just popped up for 35k. Just a few miles to far from work right now...
If inflation in commodity prices is what they want to bring down then Trichet needed to cut and Ben needs to raise any other move by the two clowns will only launch them higher. Good thing the markets close early today on a holiday shortened week.
It is hard to see that the weakness of a major financial institution should be confidential information.
It is a company doing business right out there in public, with the public, and the regulators are public servants working for the public. All the records should be wide open, including problems. The secretive mentality and surprise shutdowns do no good. Yes, the local pizza market gets a one-weekend boost, but those people were going to eat something somewhere anyway.
It's pretty straightforward. IMB looks like crap (Lordy, I wish I'd held on to some of those puts) but it has not actually collapsed. The correct way to handle such an institution, should the time come when collapse is imminent, is for the FDIC to fly in with its black helicopter brigade and close up shop in an orderly fashion.
The incorrect way to handle it is for a regulator to start a bank run. And if he pulls it off gunning for an already crippled institution and gets kudos from the clowns, next time the publicity hog will go for a bigger one, which suits you and me if we happen to be short but doesn't actually help the public in any way. If Chuck feels bad about Walt and his mom & co, he can shout from the rooftops something along the lines of "Only a moron would have more than the FDIC limit in an account!", thereby providing a public service without actually screwing anything up. But he won't, because that won't get headlines. End of story.
One thing to think about. My company never hired during the boom other than replacements. We covered all growth with OT. I have been talking with a bunch of relatives and all are in the same boat pretty much. Most have had some OT cut but really aren't under threat of loosing their jobs. Heck,a large window mfgr just went back to 2 shifts from one here locally. They had 3 shifts,7 days during the boom...Some companies are still busy...
"It is a company doing business right out there in public, with the public, and the regulators are public servants working for the public. All the records should be wide open, including problems."
Can't remember if it was on this board or wherever, but someone pointed out that there is no need for banking to be any more exciting (or remunerative) than, say, utilities.
Don't know what sort of financial institutions are going to survive the culling, but there sure to be less glamour about, and less secrecy.
Sheila: Hello Chuck... This is Sheila. How are you?
Chuck: Fine, fine Sheila and you?
Sheila: Not so good. My greasy hair is starting to fall out.
Chuck: Oh..uh.. can't help you there.
Sheila: Would you like to be a member of the sterling and faultless FDIC board? We have an opening I need to fill.
Chuck: Sure, sounds great. When do I start?
Sheila: It will need confirmation.
Chuck: Christ! I just fucked myself didn't I?
Sheila: Let me see what I can do. Will you promise me that you will never do this again and be a good boy?
Chuck: Promise!
Can't remember if it was on this board or wherever, but someone pointed out that there is no need for banking to be any more exciting (or remunerative) than, say, utilities.
Spreading truth even thru rumor and inuendo can cause panics.
However, they cannot bring down an sound institution, only one that is desperately trying to stay afloat.
Therein lies the rub. You can count on the fact that the "regulators" dont care about investors or depositors who panic, they care about the institution staying afloat.
You know the whole problem here, it is that banks believe your money is theirs, and you shouldnt be allowed to take it back.
The number of U.S. workers filing new claims for jobless benefits jumped 16,000 last week to 404,000 and a key moving average stood at the highest level since 2005, government data on Thursday showed.
You are incorrect that rumor does not have an effect on a sound institution. This is the information age, an age of speculation and instant reaction. It very well may be that Indymac is instable...but why push it over the edge? Schumer absolutely hastened the problems with Countrywide.
"the confidence interval for the monthly change in total employment from the household survey is on the order of plus or minus 430,000. Suppose the estimate of total employment increases by 100,000 from one month to the next. The 90-percent confidence interval on the monthly change would range from -330,000 to 530,000 (100,000 +/- 430,000)."
So they are 90 percent sure it was -62,000 but it could also be -400,000 or +300,000. They are also 99 percent sure it was -62,000 +- 2,500 000
Not a big fan of Schumer, but this looks like a case of blaming the messenger. What he did should be viewed in context of what the regulators have and have not done.
BG, you end the discussion without remedy. Simple solution - make transparency required and expected, then politicians have nothing to expose. And banks will be deterred from making risky decisions.
The question ought not to be misdirectied to Schumer's motivations - they don't matter.
You assume "everyone knows" when a bank is hobbling -they don't. But they do have a right to, and withdraw their money if they feel it is in jeopardy.
In this atmosphere of doubt over whether the FDIC can really reimburse customers for all the failed bank losses, who does your "let's do this quietly" method benefit? And who would a 'run' hurt?
I'm sick of the gov't playing parents in the house to a bunch wayward adolescents in Armani.
If Schumer's actions plant a seed of doubt in the mind of Americans that "all will be taken care of" by the wise capitalist class I think its worth every bank run penny.
The gov't hasn't had the public support to proactively interfere in business in over a decade. If it is going to do so now, then at least let a few chips fall before they get back in the business of regulation.
OT but this just in from the Grasping at Straws desk:
U.S. Stock-Index Futures Advance After Government Jobs Report
By Michael Patterson
July 3 (Bloomberg) -- U.S. stock-index futures advanced after a government report showed a decrease in jobs that was only slightly higher than forecast, easing concern that the economic slowdown is worsening.
IMO, we've been in the grip of secret government, secret banking, secret regulators for so long, we're beginning to think that's the way its supposed to be.
IMO again, most people are in the dark, and the only to shed any light is to place et al's feet to the fire.
Re: The legal system is not capable of dealing with incompetence on this scale. The only weapons we have are gossip and innuendo. These weapons are not precise instruments, but they are effective. If a few people feel outraged (or scared) enough to withdraw their funds and start a run, then I say great job Senator Schumer.
Re: "f Schumer's actions plant a seed of doubt in the mind of Americans that "all will be taken care of" by the wise capitalist class I think its worth every bank run penny."
Also: "we've been in the grip of secret government, secret banking, secret regulators for so long, we're beginning to think that's the way its supposed to be."
And finally: "urious to know where everyone is getting the information that Schumer leaked the letter. Because it isn't in the original two stories.
"
GREAT stuff up there for July 4th!!! Anyone know about that letter? I think it should be made public!!!!
the regulators have been delerict in their duties and schumer is right to call them on it. the industry is overexposed to real estate at the worst possible time and they have funded it with non-core funds. the fdic continues to rubber stamp approvals for brokered deposit waivers. we all have seen this movie before. look at the fdci problem bank list at q1 -- 90 banks with assets of $26 billion. well it is not hard to figure out that indymac is not yet on that list. giving their condition on market to book value, it is hard to defend why indymac is not on the problem bank list.
while schumer may be trying to reduce the losses to the insurance fund and perhaps he may successful in the long run by getting the banking regulators to act sooner than later in closings. however, in the case of indymac, it will likely raise resolution costs as uninsured depositors and unsecured creditors will run and not be around to share in the cost.
bottom line, the banking regulators have been derelict in their duties as they sat back doing nothing while the toxic mix was being put on the balance sheet.
"Maybe the law has changed. At one time, it was illegal to make statements which caused a "run on the bank.""
It has not been illegal in America to make a true statement about anything since the King has been in charge. It is NOT illegal to yell "fire" in a crowded theatre if the theatre is on fire. In fact, in some places it is illegal not to.
ac isn't channeling jas, he's the reincarnation of Patrick Bateman... the main character from American Psycho.
I have all the characteristics of a human being: blood, flesh, skin, hair; but not a single, clear, identifiable emotion, except for greed and disgust. Something horrible is happening inside of me and I don't know why. My nightly bloodlust has overflown into my days. I feel lethal, on the verge of frenzy. I think my mask of sanity is about to slip.
Forget your Fed notes, Euros and gold, the new American currency is the brick, the wheelbarrow, and the running shoe!
Chuck is well within his rights to say something like "Indymac has a high Texas ratio." or "Indymac's delinquency levels are rising and the rate of change is accelerating." Those are facts, and ones that can be publicly verified. Chuck does not have the right to say "I don't think the FDIC is prepared to handle a collapse at Indymac." The FDIC is prepared to do exactly what it has always been prepared to do, take over an institution, guarantee certain accounts to certain levels and either liquidate assets or sell the thing off to a stronger institution. This did not change recently. Whether you bank and Indy or BofA or Mom's S&L, the limits of your safety have not changed recently. If you keep money in a bank, it behooves you to understand what sort of a net you have and whether or not the bank is sound, and evidence of its soundness (or lack thereof) is public and obvious.
Okay, how about this. If a failing bank were to be sold to a larger bank for X, but because of an inappropriate leak the deal has to be consummated faster so the deal goes ahead at one half of X, who loses? The FDIC and the FDIC's source of funding.
There's a reason they close banks on Fridays, a smooth takeover benefits everyone. The chaos caused by a bank run is far more harmful to depositors than anything. They are more likely to lose access to their money (unless they are the first to panic).
What good did the letter do? Is the bank's balance sheet going to improve? Warning people is one thing, starting a panic by shouting Fire! is likely to do more harm than good. It may not be illegal, but I've never seen it recommended.
Schumer had more and better ways to warn people than naming names. If anyone benefits, it's only the acquiring bank that gets the panic discount.
If he was to have any $$$ in the vault,I am sure John D. Hawke got it out of IndyMac before voicing his faux outrage. Schumer was stating the obvious, if you read CR.
Unlike Britain, US bank depositors are not guaranteed to be made whole under FDIC insurance within any stated time frame. That's one of many weak links in that chain.
I understand that people fear the "Great Bank Runs", but that's no excuse for downplaying or soft-pedeling the multiple weaknesses in the American banking system that still remain.
Necesary straight-talking, like Schumer's, about specific banks should not fall victim to false accusations of fear-mongering.
Granted, Schumer is a publicity-seeking Wall-Street pet
However, if we had the kind of transparency that terrifies regulators across our financial system, we wouldn't have the problems we're in, and the resultant taxpayer bailouts.
Schumer is a joke, but sadly he's the least of our problems.
Please, can we get a NSFPublicPlace warning on this kind of thing? Everyone in this cafe is staring at me for howling with laughter and now I seriously need a tissue. Heysues!
"Dissemination of incomplete or erroneous information" ... BUT THAT IS COMMON PRACTICE ISN'T IT? I could pull a number of Blomberg and WSJ ""news items-articles"" including the expression "person says" as the only "source" of info. There is no understating how irritating-laughable that sounds to someone trained as a scientist. Clearly that should never be allowed to happen or be called news. But as a trader, unfortunately, you know that it is news, since the authorities do not seem to ever consider it reprehensible. I seem to have noticed most of these "news" are usually market movers to the upside. Is the offense to propagate market movers to the downside, rather than just poorly substantiated "news"? where is the line between propagating potential panic and hiding the truth (i.e. lying by omission)?
However, I do not feel that bad about the issue really, since those who are too lazy to research the issue -which is easy to do with the internet- should have mostly themselves to blame. Expecting those in power to "spoon-feed" the truth in real time to the masses is a bit unrealistic, in ANY society.
BG, again, Schumer's "rights" (whatever that unsubstantiated assertion means) are a red herring.
To repeat, who would a "run" hurt? And why would you make a case for a public official self-gagging on the subject of a bank solvency, then with the other side of your mouth insist the state of a bank's health is somehow "obvious" to the public.
Speckled all over this blog, and now on the news, are daily tales of banks hiding, restating, obfuscating the degree to which they've leveraged themselves at the altar of fat fees. They are doing everything in their power to hide their books, and it appears perhaps the FDIC is giving them cover, in the name of keeping the cleanups "orderly."
Director John Reich,Office of Thrift Supervision that oversees the Federally Chartered Savings Banks is the main reason that we have a foreclosure crisis in the USA. Senator Schumer is also part of the problem. Director Reich does not regulate, nor supervise nor enforce the violations of the savings banks that his inept organization is charged with regulating in the mortgage lending operations. The Office of Thrift Supervision on their letter head stated in 12-2006 that there is no federal consumer banking regulations. That means that if a mortgage borrower is harmed by unethical savings bank there is no redress for the borrower and the OTS will not enforce or punish their banks for any wrong doing because there are no regulations violated, because there are no regulations. That means the Senator Schumer is the problem because the Senate banking committee has not passed any federal consumer regulations. This is an example of the wealthy and the powerful protecting the wealthy and the powerful. One of Director Reichs savings banks in Cleveland Ohio with wanton disregard for the operating regulations sold my house at foreclosure in 2008 because there were no federal regulations to protect me from this unethical savings bank and I did not have the thousands of dollars to hire a creative attorney. Furthermore I am not surprised that John Hawke OCC agreed with Reich. These Banks operate their lending operation with ruthless impunity. They have continued this pattern since the savings and loan crisis since the 1980s. There is hint that they operate their credit card operations in the same way since the bankers demanded for years that Congress give them relief from their card holders filing bankruptcy and costing millions. In 2005 the Congress gave the Banks what they wanted and now today a new credit card crunch is underway choking the financial life out of millions of credit card holders. This is called the wealthy protecting the wealthy.
The Cleveland Ohio savings bank that filed their foreclosure against me, threatened to file a frivolous lawsuit against me for fighting my foreclosure. This arrogance of this savings bank is matched by the arrogance of Director Reich. Keep in mind that Director Reich is appointed by the president of the United States and only answers to Congress.
My savings bank refused for 3 years to discuss the issues, but kept complaining that I was harming their reputation by talking about the issues with the courts. The US Attorneys office in Cleveland Ohio told me that their job was to protect the bank and that I should take my complaints to the Office of Thrift Supervision. The FBI in DC told me that my foreclosure was a civil matter. The State of Ohio said that it had no authority over federal banks. The Attorney General M. Dann in Ohio who had to resign for extra martial affairs told me that when the State of Ohio made a deal with my bank
( concerning 9 appraisal violations of the banks appraiser which was the catalyst for my foreclosure) to save time and money.
Mr. Hawke knows better about not mentioning a Banks name because it could hurt the Banks reputation, try National City Bank Cleveland Ohio, how many customers were hurt. Director Reich knows better, try Countywide Bank and Washington Mutual , how many people got hurt because Director Reich did not tell those borrowers.
The analogy would be not releasing the name of a bank robber because it might hurt his criminal reputation. I know from experience how this pompous government federal supervisor operates. My Office of Thrift Supervision case number was 01075822006.
My foreclosure case number in Cleveland Ohio is 2006CV 584018
MLB
I know it's late in the game but if you're into it try giving your mother up to 2 grams of unradiated turmeric powder on a empty stomach three times a day.
uuu | 07.03.08 - 8:11 am
does irradiating turmeric destroy the curcumin?
I read all the comments.You people are good! Now lets see how good you really are...
Send your comments to where they count..To Director Reich at the
Office of Thrift Supervision.Their
public access email is
Info@OTS.Treas,Gov
Maroon 1 of 5. Anyone want to name the other 4?
That settles it. IndyMac will be shut down tomorrow.
Boo!
And so ended civilization.
Sorry, but I have to respond to a serious accusation from a previous thread:
ac sounds like he's channeling Jas.
You born and bred American dopes are all the same.
You're programmed to reject the wisdom I offer because anything that might wake you up out of your stupor is a threat to your masters on Wall Street and Capitol Hill.
Keep telling yourself everything is just fine in your feeble American minds. Nothing can save America from the Greatest Depression that's coming after more than two years of unrestrained Bernankepanky.
Plus you Americans are weak. Not only have your minds atrophied but American men lack the physique to wear clothing that emphasizes (rather than hides) their masculine features. Nothing gives me greater pleasure than the inferiority complex of those who laugh at my skin tight attire and my exposed chest and arms. Apparently my rippling thighs and heaving chest make them feel better about their own flaccid hanging flesh. Sometimes I press my hefty sculted thighs into the flank or buttocks of an adversary that's making an especially absurd or tiresome argument.
This usually sends them into hysterics bringing about the end of the useless dialog.
One day I promise I will have an American for a pet. But I'm wating for them to get a bit smarter so I can teach them a few tricks like fetch and get them to sit on command.
dingojoe, that is what I was thinking ... Hmmm, Friday comes early during a holiday week.
Best to all.
ac
Please don't hold back.
Let us know how you really feel.
ac- well I hope you do better with an American for a pet than with your neighbor's cat.
He is in trouble here as well as with SIFMA, which makes him an insane wildcard, steps away from being retarded:
Kremlin's Mafia-Style Foreign Policy: Show Me the Cash
Kremlin's Mafia-Style Foreign Policy: Show Me the Cash - WSJ.com
The Kremlin elite will join in sanctions against Iran when it is literally profitable for them to do so and not before. Sen. Schumer is speaking their language when he suggests bribing Russia into joining the boycott of Iran -- to the tune of $3 billion a year. This is the sort of mafia-style proposition they understand. I am sure they will be gratified to see a U.S. senator coming around to their way of doing business: Speak only to the big boss and offer cold, hard cash.
Schumer is a Wall Street pet-who here didnt know that already?
Schumer will grasp at any straw to draw attention to himself.
What I meant to say was...
Those sucking from the teat of political masters have no right to indignation should their political masters turn on them. If liberty still existed and the system was fair then a political hack could not destroy the economy.
"Shhh! Quit rocking the boat. There is no greater meaning in life than professional advancement," said the Seventh Day Corporatist.
Then Bernanke said "Let there be liquidity," and there was liquidity.
But, seriously, this could have all probably been avoided had Indymac's lobbyists stepped up to the plate. Let this be a lesson to you other banks... come fundraising time, you know whose coffers to fill.
These cheap shots brought to you by:
You're right, Mr. Schumer should have been more general about the public comments he made and not specifically targeted IndyMac. This would have been better:
'The New York Democrat wrote that he is "concerned that All Banks's financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of All Banks or minimize the damage should such a failure occur."'
It used to be that the most dangerous place in the world was between Schumer and a camera. Amazingly enough, that title has passed to Antonio Villaraigosa, mayor of L.A.; I swear, the guy is on TV every damn day!
Meanwhile, Sen. Charles E. Schumer (D-N.Y.), who helped fuel depositors concerns about the bank last week, sounded like he was trying to double-back a bit. He told the Associated Press that he had spoken with Treasury Secretary Henry M. Paulson Jr. and with Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., and was "reassured they are on top of the situation."
IndyMac still facing nervous depositors; Sen. Schumer says he is 'reassured' by Treasury and by the FDIC | Money & Company | Los Angeles Times
ac- you forgot the crooks! it's gotta include "crooks"
exactly. Whatever happened to government in the sunshine? The office of thrift supervision should stick to supervising. Who the %$#@ elected them anyway? This will not sit well with the entire Senate.
ac: Sorry, but I have to respond to a serious accusation from a previous thread:
ac sounds like he's channeling Jas.
That's one of the funniest posts I have read in quite awhile. Thanks.
I guess he could have just said I have every confidence in IndyMac, that's I-N-D-Y-M-A-C, wink wink.
Or maybe "a certain bank that shall remain nameless, but if you look at the comments on CalculatedRisk.blogspot it's number one on the next to fail hit list".
Or how about "that bank that's going down, no, not Lehman, I meant the other one that's going to fail."
Are you guys serious? Tonight has been one huge disappointment. AC goes from kinda cute and dystopian to drunk and now we are going to blame Schumer? Seriously?! Come on... I remember the original post and all he did was call attention to the fact that they were in trouble. So now our politicians aren't allowed to call by name institutions in trouble? How exactly are we supposed to regulate/know of the problems if saying the name of "he who shall not be named" is a crime. CR is becoming a bit drama filled and ridiculous of late.
I'd like to mention that Reich has been sitting on his ass, and even though Schumer has retard written across his forehead, he is not alone and might even be doing more than many in DC! I have to give him credit for stirring the pot and attempting to be involved, because let's face it Indymac is run by retards and Schumer is trying to call attention to the fact that elected officials need to be doing more and not just talking about how well the economy is doing!
RE: In remarks made to the National Association of Mortgage Brokers, February 6, 2008, OTS Director John M. Reich noted that adjustable-rate mortgage resets are projected to continue at high levels, with an estimated 1.8 million owner-occupied subprime mortgage resetsexpected in 2008 and 2009.
Wells Fargo is the largest producer of government-insured reverse mortgages, with a 21.6% share of the 99,870 loans originated sincethe beginning of October 2006 through August 2007. Financial Freedom Senior Funding Corp., a unit of IndyMac Bancorp Inc. ofPasadena, CA. is second, with a 10.94% share. Third-place Seattle Mortgage has a 2.75% share. (Statistics provided by American Banker,October 1, 2007.)
Conah I agree. Damned if you do, damned if you don't. If he hadn't spoken out people would be saying "where are the politicians who blah blah blah". I also love how nowhere in the rebuttal do they say his allegations were false or exaggerated.
It was Indymac's lending practices that were "reckless and irresponsible" not Schumer.
Can anyone recall some deal that Reich was going to put together? Some weird thing a few months ago... hmmm
This may be it:
The intent of their plan, the OTS says, is to provide a negative equity position to the original loan holders in an amount equal to what they are giving up by taking the partial pay-off or short sale from the proceeds of the new FHA-guaranteed loan.
In essence, the OTS believes that the FHA backed plan allows for the possibility of a windfall to the borrower down the road, by enabling him to recoup the entire gain on the sale of the property after five years.
Page Not Found - ForeclosurePulse
Also likely to fail is Bank United (BKUNA), which has 86 branches in Florida.
Its stock is now at 85 cents, down about 97% from the housing bubble days and down 75% from only two weeks ago.
The company is looking to raise $400 million in capital, despite having a market cap of $30 million. If a company has ever pulled off the feat of a raising more than 13 times its market cap during a recession, I'd love to hear about it.
There should be a run on that bank, because depositors with more than 100K in the bank will soon be facing a loss.
The stability of banks with rotten books is not something that is good for our country. One of the several causes for Japan's lost 15 years was the unwillingness of the government to let insolvent banks fail.
If he hadn't spoken out people would be saying "where are the politicians who blah blah blah".
The letter is not the problem, it's the fact he publicized it. He effectively reduced the number of options the regulators had at their disposal. Not that it'll make much difference, still, it's bad form.
Yes, yes..... Schumer wants to point out to the public that Indymac is at great risk and may fail and wonders if someone like Reich is going to do anything, and then Schumer is made out to look like an idiot scapegoat, and take the heat off the mis-managed and botched management of Indymac and the Fed regulators that were charged with regulating!
I think I may be taking sides with Schumer on this and the editorial about a bank run is bullshit, because people should be thinking in terms of alternatives -- because you have puppets like Reich spinning bullshit ideas about negative equity certificates and fantasy island theory.....why the hell isnt that retard doing his job to bust Indymac and pull the rug out from under corrupt people?????
Drag all these bastards in DC out in the street and give them the beat down, move down to Wall Street and do it to those bastards too.
ac, you are right that works ever time. LOL
ac- you forgot the crooks! it's gotta include "crooks"
In many ways the crooks are the least interesting of the lot. Their world is a heirarchy of fear, dishonesty, and intimidation/manipulation.
These guys are hardened by years on the street. But one brush of my bare pectorals against their anemic shoulders or a stroke of my biceps against their underdeveloped back muscles usually sends them into a debilitating shock and insecurity that makes most of them psychological invalids and sends them fleeing from a life of crime for good.
But one brush of my bare pectorals against their anemic shoulders or a stroke of my biceps against their underdeveloped back muscles usually sends them into a debilitating shock and insecurity that makes most of them psychological invalids and sends them fleeing from a life of crime for good.
Not to mention the mere sight of your chiseled jawbone.
ac if they ever throw any of these bastards in the pokey I hope they end up in a cell with someone just like you.
People like Reich and throughout this Bush administration have been idle all through the political buildout of The Ownership Society and the effort to find ways to pay for The Iraq War. This subprime mess has resulted in chronic decay of the regulation and enforcement efforts that should have been in place to avoid this situation. It is people like Reich that are in positions to regulate and supervise and audit, review and safeguard our banking system -- to reduce risk -- not generate and fuel it! These people that failed taxpayers are like Brown of FEMA during Katrina, i.e, they all do a heck of a job of evading responsibility and they have no accountability and they are in positions of power because of nepotism and they support collusion at the highest levels of government -- and the job they all had, was to look away and not do anything during the subprime era! Now this guy wants to shift the blame to someone that is warning people to get of a shit bank!
Re: These guys are hardened by years on the street.
See also: \tobdurate:
2.\tstubbornly resistant to moral influence; persistently impenitent: an obdurate sinner.
Reich is a goddamn communist along with Billory, give them the beat down also.
jesus, I like to think I go for the funny here but ac shows me I'm not just in a different league, but different game altogether.
Limit their options? I would love to see you put in writing how keeping their customers and the Senate in the dark expands their options. Then once you type out a few lines if you still feel like you have a point that isn't totally dickish, hit the submit button.
Reich is a cancer cell that belongs to a large tumor!
ac
i'm now sorry for my 'serious accusation', because now i've snorted beer into my keyboard with your last couple of posts.
thanks a lot. ever try to clean suds from a laptop?
i suppose i could tip it up and pour it back in the glass.
A Senator of the United States can make public whatever he wants.
Hey maybe if we don't talk about it and pretend it doesn't exist it will go away. LOL
BTW Indymac is now quoted at 74 cents a share. I don't think not talking about it is going to help save it now.
If bank solvency depends on public gullibility I think we need to change the system.
I am a guardian for my 91 year old mother in the last stages of Alzheimer's. Because I read CR and most of the comments, I have an idea of the poor shape IndyMac is in (but no money there). But I suspect there are less informed, hard working people who didnt know about IndyMac and FDIC insurance limits perhaps because they dont have the time to spend managing assets in addition to their primary job and other family responsibilities. If Schumer's comments causes some of them to find out about FDIC coverage and reduce their elderly parents' exposure, God bless the New York senator.
I agree Trader Walt.
Yah, Like IMB was about $30 one year ago and now it's 75 cents....hello OTS, FDIC, SEC, FBI, DOJ, FTC, is there anybody home that isn't either retarded or corrupt?
"I don't see how he can be trusted with confidential information in the future."
Did he do the right thing? Give an early warning? or should he have shut up and hope for the best.
Heads they win and tails you're gonna lose.
U.S. Treasury Secretary Henry Paulson said on Thursday that inflation was becoming the top economic focus of many countries around the world as oil and food prices take their toll.
Paulson: inflation becoming top global focus
| Reuters
What he didn't say was why inflation was raging.
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you? It's the free market."
Gordon Gekko
Am for full disclosure of all and any pertinent information. Any other way isn't designed to help the ordinary folks.
Rant continued: You can bet everyone on Capital Hill who either heard about or received the warning letter made sure that they didn't have exposure to IndyMac. Perhaps readers here would rather Congress keep the information to themselves and let unpaid guardians and trustees suffer the consequences!
Re: A Senator of the United States can make public whatever he wants.
Where were these people a year ago, 2 years ago? We have seen year after year of political polls and ratings that continue to show more and more dis-approval of Congress, The Senate & Bush -- The Collective DC Empire as one failure, i.e, The Worst Group ever to represent America -- The worst leadership in American history, which is an outrage and disgrace which will be ignored this 4th of July -- because people don't give a shit? What is going on?????
Re: confidential information
So, what did Chuck really tell us with that confidential information??? I think that confidential information suggests that the insiders need time to bail out, before the rubes and Chuck just saw it the other way??
Tim Duy and Mark Thoma have some interesting things to say on "Fed Watch" about the impasse between the Fed's interest rates and emerging market CB's dollar pegs.
Tim Duy Gets It Right
"Denying the Great Adjustment, by Tim Duy: ...I tell local audiences that the imbalance represents a very simple reality the US consumes more than it produces, and the excessive consumption is provided by foreign producers. Eventually, maybe tomorrow, maybe years from now, those producers will desire to consume their own domestic output. At that point, US consumption and production will have to fall into line via a possibly painful restructuring. The more painful, the more policymakers will resist."
...
"Consider that the current account deficit will need to correct by some mixture of import compression and export expansion. The weaker Dollar encourages that correction, but Dollar-pegs prevent the full adjustment. But where currency adjustment fails, commodity price adjustment steps in as, for example, higher transportation costs support import competing industries. Indeed, we are learning that cheap oil, not just cheap wages abroad, was the critical force supporting offshoring of US production. "
...
"How long can this process continue? As long as global policymakers are willing to support it. Indeed, it is almost of a game of chicken, with US and emerging market policy makers on a collision course, neither wanting to accept the adjustment, a greater reliance on internal balance, necessitated by excessive US consumption.
The US is not likely to back down soon. We are seeing increasing calls for additional stimulus packages...
With US policy stuck in place, I suspect that emerging markets will take only baby steps toward changing the current dynamic. That leaves the ECB as the force most obviously leaning against the wind. Indeed, until inflation becomes sufficiently uncomfortable that a broader swath of nations finds meaningful policy tightening a necessity, I expect current financial trends to continue."
Hey a run on, say, 5000 banks over the holiday would really "suggest" a recession is coming, wouldn't it?
I think it's damned straight for a public servant like Schumer to lean on a Treasury Dept. bureau -- one that was formed in 1989 specifically in response to the S&L crisis -- to pull up its socks. Seems to me Indymac is done, but that many others may be able to fess up, consolidate and hunker down. This won't get done if our regulatory agencies continue to act as if they're auditioning for Dancing with the Stars.
Plus, if these institutions are going to fail anyway, better they do so on Bush's watch so that blame is correctly apportioned in the public memory. That's good politics.
I would love to see you put in writing how keeping their customers and the Senate in the dark expands their options.
Haven't you been reading FFDIC's posts? There were over 200 banks on the problem list. Going to list every one of them? Schumer could have gotten the same effect for the customers by generalizing the warning to remind everyone what the FDIC limit is.
Right now IndyMac has it's doors open and people have access, a run on the bank, while entertaining for us, doesn't do much good for anybody else.
So, what did Chuck really tell us with that confidential information??
What confidential information? I don't know that Schumer had any. Everybody here says looking at their public financials they're toast. What more info do you need?
Re: Regulators to Schumer on IndyMac: Please shut up | Money & Company | Los Angeles Times
"IndyMac, which has suffered huge losses on defaulted mortgage loans, "could face a failure if prescriptive measures are not taken quickly," Schumer wrote.
Uh, wait a minute -- how could Schumer know that? And since when are regulators supposed to tell the public in advance that a particular institution has been earmarked for failure? "
particle9 writes:
Well it seems that it is OK for Wall Street to narc on institutions in trouble to certain political bastions provided they have lots o money to invest.
State was warned on securities - The Boston Globe
Is there any honest people left in the financal industry?
This looks like a smoking gun for anyone who was sold this garbage.
How FHLBanks Raise Money: FHLBanks issue debt to institutional investors through the Office of Finance. These products are rated Aaa/AAA by Moody's and Standard & Poor's respectively. FHLBank debt is the joint and several liability of all the FHLBanks
404 Not Found
A real banking crsis might wake up some people who are still half asleep. I wonder what institutions the Democrats still have on their "hit list". A banking crisis would sure finish off McCain's limping campaign. It would be toast, just like Indymac. It might also bring Washington to its senses about Iraq and our "money down the drain" attempt at empire.
FHLBank Advances. Advance lending is the FHLBanks' main business line. It currently represents about two-thirds of all the FHLBanks assets. These loans, known as advances, are well-collateralized loans used by members to support mortgage lending, community investment and other credit needs of their customers.
FHLBank consolidated obligations are sold to institutional investors through the Office of Finance. The Office of Finance, which handles FHLBank transactions, is able to sell the debt at rates just slightly higher than Treasury bonds because FHLBank products are rated Aaa/AAA by Moodys and Standards and Poors.
The FHLBanks frequently borrow short, primarily in the form of discount notes, while our membership tends to lend long, primarily to fund 15 to 30-year mortgages. At first blush, this may appear to be a term mismatch, but its not. In fact, the FHLBank System intermediates on behalf of its members to reduce term mismatch risk and provide liquidity.
FHLBanks don't fund individual mortgages. They fund mortgage pools. Since these pools are constantly changing, they have no maturity. Consequently, the many term rates FHLBanks issue reflect their member needs, including the advances they use to minimize their own interest rate risk.
Ponzi scheme: See FHLBank:
A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.
The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today's schemes are often considerably more sophisticated than Ponzi's, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit investor naïveté.
Anonymous writes: "The Senate & Bush -- The Collective DC Empire as one failure, i.e, The Worst Group ever to represent America."
I think it's pretty obvious who's looking after people with money in IndyMac.
Bush and his administration didn't and hadn't issue the warning, a Democratic senator from New York did.
This issue may not matter much to people of substantial means. They have the money to hire someone to look after their elderly parents assets.
I'm never voting for a Republican as long as it empowers our religious whacko friends (both here and abroad) as a side-effect, but I can recognize grandstanding when I see it.
I agree. Naming an individual institution was reckless and irresponsible. I was very surprised that a video like David M. Walker's was made public.
I'm voting with fill-in-the-blank names and voting out anyone in office and then in uncontested selections, I'll write in various cartoon names. I also want to be part of The Super majority, so I will vote, but not for anyone on the ballots! Every last one of them needs to be taken out of office and there is no one going in that is any better!
Like I said before, if I were going to run for office I'd change my name to "None of the Above" and go for the write in vote.
The article requested is no longer available.
Roll Call: How they voted on oil tax bill
By The Associated Press Jun 10, 2008
The 51-43 roll call by which the Senate blocked a bill that would have imposed a 25 percent tax on any "unreasonable" profits of the five largest U.S. oil companies.
On this vote, a "yes" vote was a vote in favor of the bill and a "no" vote was a vote to stop its progress. Supporters of the bill fell nine votes short of the 60 needed to prevail.
Voting "yes" were 43 Democrats, six Republicans and two independents.
Voting "no" were two Democrats and 41 Republicans.
Wake Up America pt 1 w/ David M. Walker
YouTube
- Wake Up America pt 1
$46 Trillion in Total Fiscal liabilities/exposure in 5 years! $156,000 for each person in America...
Happy 4th Of July!!
"Nothing gives me greater pleasure than the inferiority complex of those who laugh at my skin tight attire and my exposed chest and arms. Apparently my rippling thighs and heaving chest make them feel better about their own flaccid hanging flesh."
By chance are you a gay porn star?
By chance are you a gay porn star?
Don't worry ac, Ill stick up for you,...ahem,...nothing ac does is by chance.
BTW- that closing music from the David Walker video sounds like the 'Exorcist' theme on strings instead of tubular bells.
Dissemination of incomplete or erroneous information..(Reich)
I don't see how he can be trusted with confidential information in the future...(Hawke)
There's a glaring disconnnect here. If Schumer disclosed "confidential information," it apparently wasn't "erroneous," was it?
And "incomplete?" What the hell, ALL information is "incomplete."
All these characters are saying is that Schumer told the truth, but wasn't supposed to. That's an especially big no-no under the Bush junta.
Sorry CR - I beg to differ. The level of corruption in the industry, though maybe not criminal, seems so pervasive that we have no other recourse but to call these folks on it. Countrywide, IndyMac et al need to be punished and people need to be warned. The legal system is not capable of dealing with incompetence on this scale. The only weapons we have are gossip and innuendo. These weapons are not precise instruments, but they are effective. If a few people feel outraged (or scared) enough to withdraw their funds and start a run, then I say great job Senator Schumer.
I'm tired of corporations getting away with foolishness. They hide behind the law and never admit responsibility even as they pay off hush money settlements. That's no deterrent. Well, we have options. We can run them out of business.
Let's start naming the mortgage brokers, realtors, loan officers, bankers, securitizers etc BY NAME! They'll never go to jail, maybe we can shame them so they feel the pain they have caused others.
Funny, but I didn't hear all these complaints about the Fed, the bankers, the hedge fund geniuses, the real estate specs, the black helicopters, the loan officers, the real estate gurus, the corrupt Senators only (wow, ten years already?) a few years ago. I remember a NY Times Magazine cover article about how politicians were useless in the New Economy--a 4th of July BBQ, with the politicians drawn like tiny ants at the party, while the newly rich suburbanites were having a blast, enjoying their paper wealth from Yahoo, or whatever.
And today? Come on. This populist backlash is getting ridiculous. Of course, maybe it's another example of the great wisdom of the crowds, now over-shooting to the downside. Who does the blame ultimately belong to? Ourselves. You can't have bubbles without buyers and sellers. You can't have irresponsible regulators without voting for those who believe in an extreme Republican ideology of discrediting the government by appointing morons to lead its executive agencies. (I know, I know, I'm a Republican, too.) You can't be getting killed on your credit card debt, mortgage payment, school loan, wait for it, if you don't live beyond your means.
Greed. Fear. Greed. Panic. Greed. Fear. It's no wonder people can make money trading in the market. It's the same story, over and over and over and over again.
Turn off the TV, calm down, don't let the noise distract you, the End Times are not here, and frankly, if they are, so what? People always deal better with adversity than they think. It's success that makes them crazy. America isn't going anywhere. We're not going to default on our debt. The dollar will eventually strengthen. Sure, we've made mistakes, but I'm not happy listening to a bunch of newly rich Chinese, Russians, Arabs, Indians, or, Jesus, the Europeans (M. Tricky raising rates today) lecture us on our consumption patterns. We've done a hell of a lot more good than bad for the world--so, now, we got a little big-headed, ok, and we'll get a little kick in the a**. Fine. We'll deal with it.
But America will be back. Book it.
jim notes "If bank solvency depends on public gullibility I think we need to change the system."
In the micro-fractional reserve system, every bank is always subject to a run. We learned this as children as Mr. Drysdale explained to the Clampetts why the Hillbillies could not withdraw their deposits from the bank. During exponential increases all is well. Thereafter the only question is what order the banks fail in.
So you are right. We do need to change the system.
Can't it just be as simple as "some bad guys told him to do it so they could profit from drop in share values, or from the devaluation of the company as a whole to make it a much nicer meal for the rescuer"?
Problem with manipulating stocks is that there is so much noise out there. It's probably very hard to put out some news and pump or kill a stock these days. You need senators and academics and analysts and newspaper reporters to yell louder.
You do understand that there is much manipulation of perception going on right? Right?
The bankers are out to save their own ass. If, through default, it can be made to look like they are "protecting the interests of their hard-working depositors" it is happy coincidence. Meanwhile, the fate of millions is now in doubt through their greed and seeking out short term profits and fees. There is no "one" to blame. The system got cocky and de-regulation allowed them to brew some nasty tea for all of us to drink.
The banks have failed their trust. Now let the chips fall where they may.
but my bet would still be for them to come out of this with the most personal gain and wealth and with their precious egos intact while the less devious are chewed up and spit out as debris...
ahhhh, the little foxes.
I'm not quite sure what the point was of Schumer leaking his letter. But it's not like he was lying. Given the current situation, regulators accusing other people of irresponsible conduct strikes me as being a bit much.
Expectation is that ECB will increase interest-rate by 0,25% later today.But perhaps even 0.5 % is possible.Certainly Trichet has been VERY worried about inflation over the past few days.That would be a real shock!
I still don't have clarity on why his airing of his concerns would be "reckless" or "irresponsible" -- to whom and what precisely is the damage done?
Since our taxes are paying to insure these banks, it's our right to be all up in their business. It especially means that we are entitled to have the most public of debates over whether these institutions are healthy. If Schumer were overreacting, Indymac and its bodyguards, I mean, regulators, should have simply ponied up data to the contrary. Instead, they get hysterical about his letter of concern (such hysterics, by the way, do exactly the opposite of assure bank customers)
If these institutions were subject to public discourse and discussion, Indymac might have run itself better, instead of deeply into the Earth's crust.
And screw this 'tude of regulators being "willing" to share. They work for US. If they are not willing and happy to share any information about the banks whose backs we pay dearly to watch, they are corrupt and should be fired.
We have got to stop treating people feeding at our trough like we owe them. And seeing public discourse as a threat.
As expected by consensus, ECB raises to 4.25%
As expected by consensus, ECB raises to 4.25%
Thank you Trichet!
Drew writes:
As expected by consensus, ECB raises to 4.25%
Thank you Trichet!
Knew we could count on the French!
The Fed is fracked. Bring on the initial claims and ISM services numbers...
Don't expect much movement today... But next week.. ah.
There was a slight ripple of pre-announcement exticement, then retracement to the open (of EURUSD). We'll see what happens when everyone returns from lunch.
Yes yes yes yes yes!!!
Thanks Jean Claude.
Whew, I need a cigarette...
missonymous writes:
Yes yes yes yes yes!!!
Thanks Jean Claude.
Whew, I need a cigarette...
Sounds almost.. obscene.
Je me rends!
(French: I surrender!)
Ihre Drehung Bernanke!
(German: Your turn Bernanke!)
Speech! Speech! Speech! (A live stream would be the cat's pyjamas...)
Schumer is on the Senate Banking Committee. If he wants to dig a spur into regulators that he thinks are being dilatory, he could start by thinking up a reason to announce some hearings. Say, inquiring into the various agencies systems for announcing problem institutions to the public, are these systems adequate to the task, etc, or getting some extra testimony on the adequacy of the insurer's capital who knows, perhaps they could use a little more? No names of specific institutions that have publically traded stocks would need to be mentioned.
Being not a banker this is second-hand, but my understanding is that bank failure is more a function of the cash flow gap getting too large, rather than the balance sheet. Since a run is a cash flow event, that does rather suggest that leaking comments like those in the Senator's letter is a bit non-U;p; even if the bank couldn't muddle through if it weren't facing a run, an orderly shutdown would be more fair to depositors as a group, and maybe cheaper to the FDIC, at least in terms of operating cost.
Does maximum employment matter that much when we're all being paid with worthless American Pesos?
@trader walt
I know it's late in the game but if you're into it try giving your mother up to 2 grams of unradiated turmeric powder on a empty stomach three times a day.
Ons s'en fou de L'Etats Unis.
Maybe the law has changed. At one time, it was illegal to make statements which caused a "run on the bank."
Maybe the law has changed. At one time, it was illegal to make statements which caused a "run on the bank."
I think that's the law for bankers, for the rest of us, well...
That'll teach Ben to play poker with Trichet.
The Washington Independent
The FDIC Finally Figures Out that Banks Don't Play Fair
The FDIC Finally Figures Out that Banks Don’t Play Fair « The Washington Independent
I'm amused at the indignation expressed by management. Amused that IMB, standing at less than 2% of its high less than 2 years ago, can afford any indignation in the first place. If I'd been in charge of this clusterfuck, I'd have changed my name and moved to an undisclosed location.
ac,
Jas would be proud.
Someone please tell me that Schumer isn't on an Intelligence committee or anything.
Trichett has balls.
Hoocoodanode!
Cheers,
ECB Raises Benchmark Rate to Seven-Year High to Fight Inflation
ECB Raises Rate to Seven-Year High to Fight Inflation (Update1) - Bloomberg.com
Investors have fully priced in another quarter-point rate increase to 4.5 percent by the end of the year and most expect a third step by March, Eonia swap contracts show.
Trichet : I see your call and raise you Ben.
But America will be back. Book it. --Melancholy Korean
There's some other empire which slips my mind at the moment. Now what was that? Oh yeah, Italy.
But America will be back. Book it. --Melancholy Korean
Lay off the Kimchi.
But America will be back. Book it. --Melancholy Korean
With a tin cup. I will gladly pay you Tuesday for a hamburger today.
Cheers,
Trichet made the right call. Dinner tonight will be augmented with a fine french Pinot Noir.
Sorry, BB. I should have appended a simley.
I meant my comment in jest; not serious critisism, which I am for the most part loath to make due to its overall uselessness in internet conversation.
But most importantly, "I'm Sorry Melancholy Korean. I didn't mean to offend."
In a bear market, these things are only going to get worse. People panic and everyone is looking for someone to blame. It's human nature.
Schumer needs to get his profile higher to compete against Clinton for New Yorkers' attention. I guess financial institutions that are in trouble could contribute to his re-election campaign and buy his silence. If that sounds crazy, we live in interesting times and money makes things happen or don't happen.
Trichet made the right call. Dinner tonight will be augmented with a fine french Pinot Noir.
It'll be a fine Cabernet Sauvignon here. Just pulled it out of the wine cellar. Perhaps paired with a nice steak au poivre!
Anonymous Bosch writes:
Sorry, BB. I should have appended a simley.
Huh?! -62k? 5.5% unemployment? B/D model must've been working overtime
Cheers,
Misean | 07.03.08 - 8:29 am |
Misean,
I have parted with a few bucks the last couple of days. Lets just say some dummy who needed cash just sold me a rather large,7 month old,big screen for less than .20 on the dollar. There are some SMOKING deals around right now...I have zero problems taking advantage of them.
Chris
BTW,A 10 acre lot just popped up for 35k. Just a few miles to far from work right now...
Was this the week that initial claims over 400k "don't count because they extended benefits", even though expectations were given as 385k?
"Trichet : I see your call and raise you Ben."
If inflation in commodity prices is what they want to bring down then Trichet needed to cut and Ben needs to raise any other move by the two clowns will only launch them higher. Good thing the markets close early today on a holiday shortened week.
It is hard to see that the weakness of a major financial institution should be confidential information.
It is a company doing business right out there in public, with the public, and the regulators are public servants working for the public. All the records should be wide open, including problems. The secretive mentality and surprise shutdowns do no good. Yes, the local pizza market gets a one-weekend boost, but those people were going to eat something somewhere anyway.
Alo,
It's pretty straightforward. IMB looks like crap (Lordy, I wish I'd held on to some of those puts) but it has not actually collapsed. The correct way to handle such an institution, should the time come when collapse is imminent, is for the FDIC to fly in with its black helicopter brigade and close up shop in an orderly fashion.
The incorrect way to handle it is for a regulator to start a bank run. And if he pulls it off gunning for an already crippled institution and gets kudos from the clowns, next time the publicity hog will go for a bigger one, which suits you and me if we happen to be short but doesn't actually help the public in any way. If Chuck feels bad about Walt and his mom & co, he can shout from the rooftops something along the lines of "Only a moron would have more than the FDIC limit in an account!", thereby providing a public service without actually screwing anything up. But he won't, because that won't get headlines. End of story.
Cobra,
Yeah...there are good deals. Gosh, though, you mean prices are falling.
Cheers,
Anonymouse | Homepage | 07.03.08 -
One thing to think about. My company never hired during the boom other than replacements. We covered all growth with OT. I have been talking with a bunch of relatives and all are in the same boat pretty much. Most have had some OT cut but really aren't under threat of loosing their jobs. Heck,a large window mfgr just went back to 2 shifts from one here locally. They had 3 shifts,7 days during the boom...Some companies are still busy...
Chris
"It is a company doing business right out there in public, with the public, and the regulators are public servants working for the public. All the records should be wide open, including problems."
Can't remember if it was on this board or wherever, but someone pointed out that there is no need for banking to be any more exciting (or remunerative) than, say, utilities.
Don't know what sort of financial institutions are going to survive the culling, but there sure to be less glamour about, and less secrecy.
Sheila: Hello Chuck... This is Sheila. How are you?
Chuck: Fine, fine Sheila and you?
Sheila: Not so good. My greasy hair is starting to fall out.
Chuck: Oh..uh.. can't help you there.
Sheila: Would you like to be a member of the sterling and faultless FDIC board? We have an opening I need to fill.
Chuck: Sure, sounds great. When do I start?
Sheila: It will need confirmation.
Chuck: Christ! I just fucked myself didn't I?
Sheila: Let me see what I can do. Will you promise me that you will never do this again and be a good boy?
Chuck: Promise!
Can't remember if it was on this board or wherever, but someone pointed out that there is no need for banking to be any more exciting (or remunerative) than, say, utilities.
Exactly!
Trichet's speech is even more hawkish!
In other bad news except for Houston:
Houston Chronicle
Oil reaches $145.85 a record in overnight trading
404 Error, No such article | Chron.com - Houston Chronicle
Spreading truth even thru rumor and inuendo can cause panics.
However, they cannot bring down an sound institution, only one that is desperately trying to stay afloat.
Therein lies the rub. You can count on the fact that the "regulators" dont care about investors or depositors who panic, they care about the institution staying afloat.
You know the whole problem here, it is that banks believe your money is theirs, and you shouldnt be allowed to take it back.
25 Reasons To Remain Cautious
"...23. Individual investors are now taking money from their retirement accounts to survive.
Enough said.
The number of U.S. workers filing new claims for jobless benefits jumped 16,000 last week to 404,000 and a key moving average stood at the highest level since 2005, government data on Thursday showed.
U.S. jobless claims hurdle to 404,000 last week
| Reuters
Thud!
B/D not that bad this month, only construction (+29) Transport (+20) and Leisure & Hospitality(+89) doing oddly outsized numbers.
You are incorrect that rumor does not have an effect on a sound institution. This is the information age, an age of speculation and instant reaction. It very well may be that Indymac is instable...but why push it over the edge? Schumer absolutely hastened the problems with Countrywide.
"the confidence interval for the monthly change in total employment from the household survey is on the order of plus or minus 430,000. Suppose the estimate of total employment increases by 100,000 from one month to the next. The 90-percent confidence interval on the monthly change would range from -330,000 to 530,000 (100,000 +/- 430,000)."
So they are 90 percent sure it was -62,000 but it could also be -400,000 or +300,000. They are also 99 percent sure it was -62,000 +- 2,500 000
"You are incorrect that rumor does not have an effect on a sound institution."
Of course that is incorrect. Fractional reserve banking depends on confidence for its very existence.
A lot of stuff out there to worry about, but this one is baked into our cake.
Thud indeed.
And yet, or perhaps because of said thud in the latest numbers, someone is making a serious play across the Dollar markets.
Not a big fan of Schumer, but this looks like a case of blaming the messenger. What he did should be viewed in context of what the regulators have and have not done.
BG, you end the discussion without remedy. Simple solution - make transparency required and expected, then politicians have nothing to expose. And banks will be deterred from making risky decisions.
The question ought not to be misdirectied to Schumer's motivations - they don't matter.
You assume "everyone knows" when a bank is hobbling -they don't. But they do have a right to, and withdraw their money if they feel it is in jeopardy.
In this atmosphere of doubt over whether the FDIC can really reimburse customers for all the failed bank losses, who does your "let's do this quietly" method benefit? And who would a 'run' hurt?
I'm sick of the gov't playing parents in the house to a bunch wayward adolescents in Armani.
If Schumer's actions plant a seed of doubt in the mind of Americans that "all will be taken care of" by the wise capitalist class I think its worth every bank run penny.
The gov't hasn't had the public support to proactively interfere in business in over a decade. If it is going to do so now, then at least let a few chips fall before they get back in the business of regulation.
OT but this just in from the Grasping at Straws desk:
U.S. Stock-Index Futures Advance After Government Jobs Report
By Michael Patterson
July 3 (Bloomberg) -- U.S. stock-index futures advanced after a government report showed a decrease in jobs that was only slightly higher than forecast, easing concern that the economic slowdown is worsening.
Did somebody say "bank run"? Cancel the Pinot Noir and fetch me a 20yo single malt.
Curious to know where everyone is getting the information that Schumer leaked the letter. Because it isn't in the original two stories.
It's not like an administrator in the Bush administration would ever cook up an excuse to keep information from Congress, or anything.
What Alo says @ 9:05.
IMO, we've been in the grip of secret government, secret banking, secret regulators for so long, we're beginning to think that's the way its supposed to be.
IMO again, most people are in the dark, and the only to shed any light is to place et al's feet to the fire.
I agree but let's face it, with 290M people in the US of A, try playing whack-a-mole.
It's totally unrealistic to expect silence when the system is imploding.
Paul @ 6:12:
Re: The legal system is not capable of dealing with incompetence on this scale. The only weapons we have are gossip and innuendo. These weapons are not precise instruments, but they are effective. If a few people feel outraged (or scared) enough to withdraw their funds and start a run, then I say great job Senator Schumer.
Thanks, Anonymous Bosch. And ac, please promise will occasionally pepper us with jas parodies from now on. This was magically delicious:
Sometimes I press my hefty scuplted thighs into the flank or buttocks of an adversary that's making an especially absurd or tiresome argument.
@ 8:08
Yes yes yes yes yes!!!
Thanks Jean Claude.
Whew, I need a cigarette...
My guess is Schumer is just getting warmed up.
Now if he would just call me first so I could make
proper use of the info .
Re: "f Schumer's actions plant a seed of doubt in the mind of Americans that "all will be taken care of" by the wise capitalist class I think its worth every bank run penny."
Also: "we've been in the grip of secret government, secret banking, secret regulators for so long, we're beginning to think that's the way its supposed to be."
And finally: "urious to know where everyone is getting the information that Schumer leaked the letter. Because it isn't in the original two stories.
"
Schumer's a boob. Doesn't take too long listening to him to discover that.
the regulators have been delerict in their duties and schumer is right to call them on it. the industry is overexposed to real estate at the worst possible time and they have funded it with non-core funds. the fdic continues to rubber stamp approvals for brokered deposit waivers. we all have seen this movie before. look at the fdci problem bank list at q1 -- 90 banks with assets of $26 billion. well it is not hard to figure out that indymac is not yet on that list. giving their condition on market to book value, it is hard to defend why indymac is not on the problem bank list.
while schumer may be trying to reduce the losses to the insurance fund and perhaps he may successful in the long run by getting the banking regulators to act sooner than later in closings. however, in the case of indymac, it will likely raise resolution costs as uninsured depositors and unsecured creditors will run and not be around to share in the cost.
bottom line, the banking regulators have been derelict in their duties as they sat back doing nothing while the toxic mix was being put on the balance sheet.
As others have implied above, there's no need for secrecy in banking and finance; that only helps spread risk unfairly to those of us in the dark.
If serious damage can be done to an institution by rumor and innuendo, then that institution is not on stable footing and deserves to be shaken up.
Schumer was right to shine some light.
Schumer response: "If you can think of a better way to grandstand than naming individual companies or executives, I'd like to hear it!"
"Maybe the law has changed. At one time, it was illegal to make statements which caused a "run on the bank.""
It has not been illegal in America to make a true statement about anything since the King has been in charge. It is NOT illegal to yell "fire" in a crowded theatre if the theatre is on fire. In fact, in some places it is illegal not to.
ac isn't channeling jas, he's the reincarnation of Patrick Bateman... the main character from American Psycho.
I have all the characteristics of a human being: blood, flesh, skin, hair; but not a single, clear, identifiable emotion, except for greed and disgust. Something horrible is happening inside of me and I don't know why. My nightly bloodlust has overflown into my days. I feel lethal, on the verge of frenzy. I think my mask of sanity is about to slip.
Forget your Fed notes, Euros and gold, the new American currency is the brick, the wheelbarrow, and the running shoe!
Free stuff for everyone!
Alo,
Chuck is well within his rights to say something like "Indymac has a high Texas ratio." or "Indymac's delinquency levels are rising and the rate of change is accelerating." Those are facts, and ones that can be publicly verified. Chuck does not have the right to say "I don't think the FDIC is prepared to handle a collapse at Indymac." The FDIC is prepared to do exactly what it has always been prepared to do, take over an institution, guarantee certain accounts to certain levels and either liquidate assets or sell the thing off to a stronger institution. This did not change recently. Whether you bank and Indy or BofA or Mom's S&L, the limits of your safety have not changed recently. If you keep money in a bank, it behooves you to understand what sort of a net you have and whether or not the bank is sound, and evidence of its soundness (or lack thereof) is public and obvious.
Okay, how about this. If a failing bank were to be sold to a larger bank for X, but because of an inappropriate leak the deal has to be consummated faster so the deal goes ahead at one half of X, who loses? The FDIC and the FDIC's source of funding.
There's a reason they close banks on Fridays, a smooth takeover benefits everyone. The chaos caused by a bank run is far more harmful to depositors than anything. They are more likely to lose access to their money (unless they are the first to panic).
What good did the letter do? Is the bank's balance sheet going to improve? Warning people is one thing, starting a panic by shouting Fire! is likely to do more harm than good. It may not be illegal, but I've never seen it recommended.
Schumer had more and better ways to warn people than naming names. If anyone benefits, it's only the acquiring bank that gets the panic discount.
If he was to have any $$$ in the vault,I am sure John D. Hawke got it out of IndyMac before voicing his faux outrage. Schumer was stating the obvious, if you read CR.
Unlike Britain, US bank depositors are not guaranteed to be made whole under FDIC insurance within any stated time frame. That's one of many weak links in that chain.
I understand that people fear the "Great Bank Runs", but that's no excuse for downplaying or soft-pedeling the multiple weaknesses in the American banking system that still remain.
Necesary straight-talking, like Schumer's, about specific banks should not fall victim to false accusations of fear-mongering.
Schumer is a joke, but sadly he's the least of our problems.
I wrote the above, Im not anonymous...LOL
"ac sounds like he's channeling Jas."
Please, can we get a NSFPublicPlace warning on this kind of thing? Everyone in this cafe is staring at me for howling with laughter and now I seriously need a tissue. Heysues!
"Dissemination of incomplete or erroneous information" ... BUT THAT IS COMMON PRACTICE ISN'T IT? I could pull a number of Blomberg and WSJ ""news items-articles"" including the expression "person says" as the only "source" of info. There is no understating how irritating-laughable that sounds to someone trained as a scientist. Clearly that should never be allowed to happen or be called news. But as a trader, unfortunately, you know that it is news, since the authorities do not seem to ever consider it reprehensible. I seem to have noticed most of these "news" are usually market movers to the upside. Is the offense to propagate market movers to the downside, rather than just poorly substantiated "news"? where is the line between propagating potential panic and hiding the truth (i.e. lying by omission)?
However, I do not feel that bad about the issue really, since those who are too lazy to research the issue -which is easy to do with the internet- should have mostly themselves to blame. Expecting those in power to "spoon-feed" the truth in real time to the masses is a bit unrealistic, in ANY society.
If they made the information public, the institutions wouldn't be able to hide their bogus accounting and we wouldn't be in this mess.
the most dangerous thing in Washington is Chuck Schumer behind a microphone
The most dangerous thing in Washington is a money printing, money spending republican who can't add, subtract or multiply.
BG, again, Schumer's "rights" (whatever that unsubstantiated assertion means) are a red herring.
To repeat, who would a "run" hurt? And why would you make a case for a public official self-gagging on the subject of a bank solvency, then with the other side of your mouth insist the state of a bank's health is somehow "obvious" to the public.
Speckled all over this blog, and now on the news, are daily tales of banks hiding, restating, obfuscating the degree to which they've leveraged themselves at the altar of fat fees. They are doing everything in their power to hide their books, and it appears perhaps the FDIC is giving them cover, in the name of keeping the cleanups "orderly."
Director John Reich,Office of Thrift Supervision that oversees the Federally Chartered Savings Banks is the main reason that we have a foreclosure crisis in the USA. Senator Schumer is also part of the problem. Director Reich does not regulate, nor supervise nor enforce the violations of the savings banks that his inept organization is charged with regulating in the mortgage lending operations. The Office of Thrift Supervision on their letter head stated in 12-2006 that there is no federal consumer banking regulations. That means that if a mortgage borrower is harmed by unethical savings bank there is no redress for the borrower and the OTS will not enforce or punish their banks for any wrong doing because there are no regulations violated, because there are no regulations. That means the Senator Schumer is the problem because the Senate banking committee has not passed any federal consumer regulations. This is an example of the wealthy and the powerful protecting the wealthy and the powerful. One of Director Reichs savings banks in Cleveland Ohio with wanton disregard for the operating regulations sold my house at foreclosure in 2008 because there were no federal regulations to protect me from this unethical savings bank and I did not have the thousands of dollars to hire a creative attorney. Furthermore I am not surprised that John Hawke OCC agreed with Reich. These Banks operate their lending operation with ruthless impunity. They have continued this pattern since the savings and loan crisis since the 1980s. There is hint that they operate their credit card operations in the same way since the bankers demanded for years that Congress give them relief from their card holders filing bankruptcy and costing millions. In 2005 the Congress gave the Banks what they wanted and now today a new credit card crunch is underway choking the financial life out of millions of credit card holders. This is called the wealthy protecting the wealthy.
The Cleveland Ohio savings bank that filed their foreclosure against me, threatened to file a frivolous lawsuit against me for fighting my foreclosure. This arrogance of this savings bank is matched by the arrogance of Director Reich. Keep in mind that Director Reich is appointed by the president of the United States and only answers to Congress.
My savings bank refused for 3 years to discuss the issues, but kept complaining that I was harming their reputation by talking about the issues with the courts. The US Attorneys office in Cleveland Ohio told me that their job was to protect the bank and that I should take my complaints to the Office of Thrift Supervision. The FBI in DC told me that my foreclosure was a civil matter. The State of Ohio said that it had no authority over federal banks. The Attorney General M. Dann in Ohio who had to resign for extra martial affairs told me that when the State of Ohio made a deal with my bank
( concerning 9 appraisal violations of the banks appraiser which was the catalyst for my foreclosure) to save time and money.
Mr. Hawke knows better about not mentioning a Banks name because it could hurt the Banks reputation, try National City Bank Cleveland Ohio, how many customers were hurt. Director Reich knows better, try Countywide Bank and Washington Mutual , how many people got hurt because Director Reich did not tell those borrowers.
The analogy would be not releasing the name of a bank robber because it might hurt his criminal reputation. I know from experience how this pompous government federal supervisor operates. My Office of Thrift Supervision case number was 01075822006.
My foreclosure case number in Cleveland Ohio is 2006CV 584018
MLB
Ons s'en fou de L'Etats Unis.
Anonymous Bosch | 07.03.08 - 8:11 am
vous avez raison
I know it's late in the game but if you're into it try giving your mother up to 2 grams of unradiated turmeric powder on a empty stomach three times a day.
uuu | 07.03.08 - 8:11 am
does irradiating turmeric destroy the curcumin?
I read all the comments.You people are good! Now lets see how good you really are...
Send your comments to where they count..To Director Reich at the
Office of Thrift Supervision.Their
public access email is
Info@OTS.Treas,Gov