U.S. Shuts Big Bank As Crisis Intensifies

Wall Street Journal ^ | July 11, 2008 | Damian Paletta and David Enrich

[politicket]

IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators in one of the largest bank failures in U.S. history.

The Pasadena, Calif., thrift was one of the largest savings and loans in the country with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank and Trust Co., which failed in 1984 with $40 billion of assets.

IndyMac specialized in Alt-A loans, a type of mortgage that can often be offered to borrowers who don't fully document their incomes or assets. ...

[silentreignofheroes]

“barter”

Tax this!

Squirrels and rabbits are showing up here again,but deer are everywhere in season.

[Alter Kaker]

Political correctness is rapidly killing this country.

Political correctness led to a run on this bank? Huh?

[Freedom_Is_Not_Free]

I fully acknowledge that inflation may well win. I don’t pretend to know the answer. It would help me ENORMOUSLY if I did know the answer.

My only point was to remind or teach people that deflation has a chance to win and sink our economy doing so. The conventional wisdom is that high inflation is going to happen due to the FEDs low funds rate and pumping money. But then, the conventional wisdom is that the FED is pumping, when in fact they are not.

Because most people and analysts are assuming we will have runaway inflation, I wanted to caution that this is NO WAY a certainty and that deflation has an excellent chance to win this contest.

Between the two, I’ll take the high inflation, thank you very much. I hate to see banks fail in droves, businesses close down, unemployment soar and economic activity freeze up at every level.

[politicket]

Because one bank closes, the World is coming to an end?

I never said the world was coming to an end, so please don't attribute that phrase to me.

What I did say is that we have been, and will continue to be challenged by economic turmoil for the foreseeable future. I also believe that the economic underpinnings of this country are in desparate shape and an economic collapse is quite feasible in the United States. I also happen to believe that there are those who have been planning for this and would love to see it happen. I believe that the Fed's have been, and are, making the "last push" to seize control of the local banking institutions, with the goal of weeding out the middle class in this nation.

You may not agree with my analysis, but that's what makes discussion forums interesting...

[Transformers]

Thanks for your reply.

I was thinking that too. Ok, I’ll go a step further. With everything feeling so shaky in so many ways, do you think there’s a strong chance for civil unrest in the near future? I know my youth pastor admitted this such thing recently, he senses something is up. I have too for awhile. I think others are as well.

[Tammy8]

My hubby is the all time king of bartering- you can’t even imagine.LOL Most people around here are really into it, when they need anything the first stop is all the neighbors- and only if no one has what we need do we make a trip to town.

[Alter Kaker]

The libs told the banks that if you they didn’t loan money to sub-prime borrowers, the majority of whom were minorities, then they were “racist”.

Forgive me, but that explanation is idiotic. Banks didn't loan to sub-prime borrowers because they were afraid of being accused of being racist, banks loaned to sub-prime borrowers because they could make a lot of money by lending to sub-prime borrowers at higher than normal rates.

The purpose of any corporation is to make money, and that's the only thing that banks -- as all normal corporations -- are interested in.

[Tammy8]

That’s a good idea, I may get some in yet.

[Freedom_Is_Not_Free]

Disagree. I think it stems from unadulterated avarice, which results in a nuclear response from the FED every time we are on the cusp of a mild recession that would pass quickly. In their zeal to avoid a few mild recessions, the FED flooded the world with a massive liquidity bubble, the ONLY result of which can be what we are now experiencing. Direct cause and effect.

[Transformers]

No he’s right they did. The banks were demanded by the Feds to open up funding as to not do so was considered discrimatory. This is true.

[Mr. Jeeves]

The libs told the banks that if you they didn’t loan money to sub-prime borrowers, the majority of whom were minorities, then they were “racist”.

Forgive me, but that explanation is idiotic.

For another reason, too - it was Ronald Reagan and the Republicans who pushed the idea that minority home ownership would spawn a new generation of conservatives, because people with a "stake in America" would forsake their sinful ways and focus on improving themselves and their communities.

That worked well, didn't it? ;)

[silentreignofheroes]

Sounds like good spot and a good dude.We do it here.

[Tammy8]

Oh yeah, plenty of deer here- I almost bagged a big buck with the truck yesterday. They were grazing in a alfalfa field and something spooked them; they fled across the road right in front of me, one almost didn’t make it.

[politicket]

With everything feeling so shaky in so many ways, do you think there’s a strong chance for civil unrest in the near future?

There will soon be coming a time in this country when it will be illegal and punishable by prison time to speak parts of God's Word - especially with regard to the subject of homosexuality.

My state of Colorado just enacted a law that makes it a crime, punishable by up to a year in prison, for a business entity to distribute any type of printed material that goes against the homosexual agenda. It is also against the law to keep a person from using public restroom facilities of their choosing, based upon that person's sexual identity for that particular day.

In short, there is quickly coming a time when Christian's will have a choice to make - follow God's law - or follow man's law.

[An Old Man]

"making the "last push" to seize control of the local banking institutions"

Have I been laboring under a false impression that that was accomplished many years ago when they put those neat little FDIC stickers on the bank windows.

[Misterioso]

Our "Supreme Court" legalized the murder of unborn children in 1973. Since then, an average of 4,400 babies have been murdered each and every day in this country.

I don't understand. How was this a correction by God?

[Arkinsaw]

The purpose of any corporation is to make money, and that's the only thing that banks -- as all normal corporations -- are interested in.

SHORT term profits are all they are interested in. How do they get that (unsustainable) 25% growth next quarter? What do they have to do to meet the analysts unrealistic forecasts?

Truth is, you can't be a growth stock each and every quarter forever.

There are companies right now that are making a profit during trying times but are getting slammed because they "missed" analysts predictions.

We have had a casino going on, not an economy.

[anglian]

MORE REASONS TO CENSURE SCHUMER

The Senator would appear to have a major conflict of interest in that the top 9 campaign contributors to his 2004 re-election campaign were investment banks according to the Center for Responsive Politics.
See COMMENTS: Regulators to Schumer on IndyMac: Please shut up
http://latimesblogs.latimes.com/money_co/2008/07/sen-charles-e-s.html

[Freedom_Is_Not_Free]

Is that your opinion on Bear Sterns as well? You know... That investment bank that Ben Bernanke claimed would have taken down the entire US banking sector and the entire US economy with it, if it had been allowed to just fail ala IndyMac. That bank.

So yes, the answer to your question is, yes the failure of one bank can mark that the world is coming to an end, especially when it it just the first of many more to come.

I hope you are still in a position to ask that question again in 3 years instead of posting that your world is indeed coming to an end, or feeling that it is in any event.

You ain’t seen nothing yet.

[Transformers]

Wow - I had no idea. That’s messed up.