The Crash begins: Second biggest bank failure in US history!

[joeblow]

http://www.bloomberg.com/apps/news?pid= ... refer=home

IndyMac Seized by U.S. Regulators Amid Cash Crunch

IndyMac Bancorp Inc. became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash.

The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mailed statement today. Customers will have access to funds this weekend via automated teller machines. Regulators intend to eventually sell the company.

The Pasadena, California-based lender specialized in so- called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. IndyMac's home state, where Countrywide Financial Corp. was also located before it was bought last week, has been among the hardest hit by foreclosures.

``Given their focus on Alt-A and a heavy concentration in California, they would have suffered meaningful losses in almost any scenario,'' Brian Horey, president of Aurelian Management LLC in New York, said before the seizure was announced. Aurelian is short-selling IndyMac shares to gain from declines.

Had IndyMac ``applied some common sense and changed their approach to underwriting as the housing market peaked, they might have lived to see the next cycle,'' Horey said.

IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.

Liquidity Crisis

``This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement. ``Although this institution was already in distress, I am troubled by any interference in the regulatory process.''

Schumer blamed IndyMac's own actions and regulatory failures for the seizure.

``If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today,'' Schumer, a New York Democrat, said in an e-mail today. ``Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.''

IndyMac becomes the largest OTS-regulated savings and loan to fail and second-biggest financial institution to close behind Continental Illinois in 1984, according to the FDIC. Lehman Brothers Holdings Inc. advised the regulator in the transaction.

$900 Million in Losses

The lender racked up almost $900 million in losses as home prices tumbled and foreclosures climbed to a record. California ranked second among U.S. states, with one foreclosure filing for every 192 households in June, 2.6 times the national average.

After peaking at $50.11 on May 8, 2006, IndyMac shares lost 87 percent of their value in 2007 and another 95 percent this year. The stock fell 3 cents to 28 cents at 4 p.m. New York time today.

IndyMac's shutdown may mean regulators will have to raise more money to support the federal deposit insurance program that repays customers when a bank fails, Reich said during a press conference. The failure will cost the fund about $4 billion to $8 billion, the FDIC said in a statement.

About $1 billion of uninsured deposits are held by about 10,000 customers, the FDIC said. Those depositors will get an ``advance dividend'' equal to half the uninsured amount, according to the statement.

The FDIC insures $100,000 per depositor per insured bank, according to the agency's Web site. Customers may qualify for more coverage depending on the type of accounts they own, and some retirement accounts have a $250,000 limit.

Workforce

IndyMac announced on July 7 that it was firing half its employees. The lender agreed to sell most of its retail mortgage branches to Prospect Mortgage, giving the Northbrook, Illinois based-company more than 60 branch offices with 750 employees. IndyMac also has a retail network with 33 branches and $18 billion in deposits, mostly insured by the FDIC.

The company was started in 1985 by Countrywide founders Angelo Mozilo and David Loeb under the name Countrywide Mortgage Investments. In 1999, it converted into a savings institution from a real estate investment trust. That year, Michael Perry replaced Mozilo as chief executive officer.

Under Perry's leadership, profit more than doubled from $118 million in 2000 to $343 million in 2006 amid the housing boom. The stock more than tripled over that stretch.

[Canard]

have some supplies folks, does anyone have like a preparedness checklist or anything just so we all are on a relatively same page?

[Anonymous]

Haha, want my list?  

Rifle.
Rifle ammo.
Pistol.
Pistol ammo.
Shotgun.
Shotgun ammo.
Knives.  
Pitchforks.
and lotsa rope to hang villains!


Did I miss anything?  Oh, might want to store a little food, water, and medicine too.

[Ognir]

Don't panic just yet, from my reading of the situation,  China is the largest holder (Foreign) of paper in the above mentioned money scam and the Zio-Jew  Bankers will use this situation to teach China a lesson in global financing.

[Anonymous]

Yeah, there is no major rush to get paranoid yet.  We have a little time before things get real ugly in the US.  They are still using our empire and armies to support them, so we will likely "seem" to continue to "prosper" as they use the US up in their conquests.  Funny Germany was done the same way. Frickin parasites.  Seems we need some de-wormer to expunge them from our system.

[Ognir]

BBC NEWS
US 'mulls bail-out for lenders'

The US government is reported to be considering injecting up to $15bn (£7.5bn) into the providers of mortgage funding Freddie Mac and Fannie Mae.

The extra capital could be announced before the US markets open on Monday, according to the London-based Sunday Times and Sunday Telegraph newspapers.

Freddie Mac and Fannie Mae guarantee almost half of all US home loans.

Their share prices fell nearly 50% last week amid fears that they might have trouble raising money.

Freddie Mac and Fannie Mae are known as government-sponsored enterprises (GSE) and they buy debt from the companies that sell mortgages to house-buyers.

They then sell on the debt to investors and because they are government sponsored, the price of mortgages is kept low.

If investors decided to stop buying the debt from the two companies it would mean they would have to stop supporting the housing market and the already tough situation would get even worse.

Nationalisation rumours

On Friday US Treasury Secretary Henry Paulson was forced to issue a statement saying that he would support the two GSEs "in their current form" to dispel rumours of nationalisation.

Under the plan reportedly being considered, the US government would receive special shares in Fannie Mae and Freddie Mac, which would further reduce the already depressed value of the existing shareholders' stakes.

Mr Paulson is insisting that if there is to be a rescue then it must not benefit shareholders, the Wall Street Journal reported on Saturday.

Freddie Mac is due to sell $3bn in short-term debt on Monday, which may hasten the government's decision.

It is important for the sale to be a success to show confidence in the GSEs.

Treasury Department officials have been on the phone over the weekend making sure that banks that would normally buy such such debt from Freddie Mac are planning to bid this time, according to the Washington Post.

The newspaper reports that the officials are now optimistic about the sale.

Obama comments

The Democratic White House hopeful Barack Obama has made his first comments about the problems facing the GSEs.

He described the situation as being of "extraordinary concern", but did not support an immediate bail-out.

"I think we need to watch carefully and see how it plays out before we make a decision about which steps need to be taken, if any," he told reporters on a flight to San Diego.

"I have confidence that with some prudent steps by the government, that we'll be able to stabilise the situation."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/b ... 504122.stm

Published: 2008/07/13 16:26:28 GMT

© BBC MMVIII

[Anonymous]

Obama comments

The Democratic White House hopeful Barack Obama has made his first comments about the problems facing the GSEs.

He described the situation as being of "extraordinary concern", but did not support an immediate bail-out.

"I think we need to watch carefully and see how it plays out before we make a decision about which steps need to be taken, if any," he told reporters on a flight to San Diego.

"I have confidence that with some prudent steps by the government, that we'll be able to stabilise the situation."

Holy crappoly!!!  Does Obama ever say anything meaningfull???  This guy is such a retard.. omg...

Nationalization eh... people are weary of that word used with anything... it shouts COMMUNISM LMAO

[Anonymous]

http://www.reuters.com/article/marketsN ... 4420080713

Israel's Koor buys Credit Suisse shares for $378 mln

 TEL AVIV, July 13 (Reuters) - Israeli holding company Koor Industries (KOR.TA: Quote, Profile, Research, Stock Buzz) said on Sunday it has accumulated 8.97 million shares of Credit Suisse Group (CSGN.VX: Quote, Profile, Research, Stock Buzz) for 1.28 billion shekels ($378 million).

The shares are equal to a 0.89 percent stake in Credit Suisse, Koor said in a statement to the Tel Aviv Stock Exchange.

Earlier this month Koor said it had bought Credit Suisse shares worth 100 million Swiss francs.

Koor said it might acquire more shares from time to time up to a maximum of 1.5 billion shekels as well as sell shares in accordance with market developments.

In April, Koor said it would invest up to 1.5 billion shekels in Credit Suisse and Barclays Bank (BARC.L: Quote, Profile, Research, Stock Buzz).

Koor has bought some shares in Barclays, but not in significant amounts.

Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) has approved a credit framework to enable Koor to make the purchases.

Koor is 49.5 percent held by Discount Investment Corp (DISI.TA: Quote, Profile, Research, Stock Buzz), a subsidiary of conglomerate IDB Development (IDBD.TA: Quote, Profile, Research, Stock Buzz). IDB also holds another 10 percent of Koor. ($1 = 3.385 shekels) (Reporting by Tova Cohen; Editing by Quentin Bryar)

[Rory27]

i L.M.F.A.O at ANYONE who would put there $$$ into a bank called "IndyMac"...Thats ALLL i have to say about that :-P

[Anonymous]

Koor, good ol' Bronfman company:  http://www.transnationale.org/companies ... stries.php

[K-Sensor]

It seems to be a big event.  How long can the Government keep printing money to prop up these businesses.   America is stuffed and with it the rest of the World.

[Anonymous]

http://ktla.trb.com/video/?clipId=26937 ... lipFormat=

[Anonymous]

^  Damn.... who gets to decide who is on the "list" and who isn't?

[Anonymous]

Whoever has the biggest gun.