Posted on 07/11/2008 4:18:12 PM PDT by 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. ...
(Excerpt) Read more at online.wsj.com ...
Almost a complete repeat of the Great Depression. It will become worse as we shake out the excesses of the last 15 years of easy money. Typically, the worst of the financial pain is felt 3 years after market crash (March of 2008). Good news is we have six times the food and much better communications network. We’ll get back on track quickly afterwards but it won’t be pretty.
It depends where you live. The housing market must fall until it reaches a 3 to 1 income ratio. IN other words, homes are still overpriced compared to personal incomes. Nationally, home prices may average to this decline but you will likely see them grow again in about five years (start of a new bull market). Houses have about 10% more to drop over the next year into 2009 and foreclosures will accelerate in this time.
It’s a cumulative effect and takes time. 2009 will be ugly, 2010 worse and 2011 be a depression with many energy jobs added. Dollar could outright collapse this year. 2012 and 2013 will see marginal growth and 2013 we’ll see global investment back into the U.S. stock market and start of a new bull market.
Not after this year they won’t. It’s an election year. But next year will be different and the BIS and other G8 nations will not tolerate the U.S. further exporting inflation. We will deflate by -20 GDP over a four year span. I calculated this in June 2007, so now a 3 year span... That was also before the recent oil spike, my numbers in oil price was $120, not $147! This year and part of next will feel like 1970’s stagflation but deflation is what is truly occuring.
Really a shift from Efficient Market Hypososis back to Save and Invest economy and dislocations is an under-stated word for what is coming down the pike as the free market is never fooled.
The twin city empire cut of America cut too deeply with there financial shenanigans this time. As my grandmother once said, ‘Don’t ever trust a banker, they love foreclosures!’ She of course lived through the Great Depression. America will go on, the speakeasy crowd and immoral bankers of the Roaring Twenties went on to become the Greatest Generation by 1946. We do have the mightiest military on earth, unlimited food supply and millions of innovators. Depression conditions won’t last several years this time either.
“Your thinking is right,anyone who thinks the Gov. can is probably at DU or some other “We’re from the Gov.,we’re here to protect you” site.Don’t panic,just prepare.”
Exactly. And it was mostly private sector i-Banks that loudly proclaimed subprime would not spill over into the ‘real economy’. As Ben Franklin said, better to have it and not need it then need it and not have it. Have 30 days of food and water at all times for ANY emergency. Have 90 days supply of vital medicines if you are Diabetic, have Heart condition etc.
This one is big and can cause other major ripple effects onto other banks. Like dominoes all lined up, this can cause systemic collpase. It’s serious but after it’s all said and done and gets worse of the next 3 years, America will come back.
‘When banks and government colludes, American’s will wake up homeless and penniless’ Alexeander Hamilton - First U.S. Treasurer.
Actually, read Alexander Hamilton. Had many inputs about government, banking and housing as early as 1790.
Sure, many of the Democrats love the gods and clods model by Cuba and Venezuela.
Ah, the study of economics...
It's obvious you have given this topic some thought and have some interesting conclusions.
Inflation or deflation?
I, imho, do not see the collapse as you do.
I do not believe we have unlimited food supplies and I am not a Malthusian. There's too much world demand for food and it will continue to grow. Populations are growing in many other countries and food stuffs will be needed.
The rest of the world may not need us nearly as much as it has in the past.
Oil will continue to rise and I see no factors to offset that in the near future. Again, other countries will continue grow as we may falter.
I think you are correct about stagflation...
The Fed will really have no choice but keep the money press humming to payoff U.S. debt and keep the Recession wolf from the door—it's already here.
If Obama is elected, imho, we will see public works projects to employ those who have lost employment in the private sector. A great military can only remain great if it's country is in good fiscal condition. I agree I our biggest gift is our innovation. Have a great day...
The present day country was Hamilton’s vision and not Jefferson’s...
Have a great day...
Sweden? Did they move from Basil?
>>>>the United States has only recently (since the 60’s) suffered mass moral failure. This country has been paying the price ever since and it continues to worsen.<<<
Nonsense.
Slavery was an evil and anti-human practice in the U.S. for more than 100 years and was a “mass moral failure”.
The 600,000 who died in the resulting Civil War would equate to about 6 MILLION today, all from a U.S.A. 1/3 the size of today’s. Hundreds and tens of thousands died from horrific wounds in battles lasting only ONE OR TWO DAYS.
I can’t buy into your pessimism, which I infer to come from the notion that “Since Roe v. Wade God has been punishing the United States.”
Why should the world trust Wall Street again? Greater transparency? Greater integrity? Better court system?
Considering that McCain has few real principles, and no knowledge of economic principles, I believe he will join the stimulus crowd as the cries of the Keynesians will drown out any sensible economists.
He will avoid like the plague any policy that will tar him with the same brush that blackened Herbert Hoover's reputation, the reputation for being stingy in the face of great need.
If things went well with the economy, McCain might be grudgingly applauded for being stingy. In bad times, it won't look so good. And other than on immigration, McCain doesn't like looking bad.
It will stop literally overnight... you know... when you go to use your credit card, and you find out Citibank has vanished...and so has your credit card.
As if there wasn't enough danger, the one that will break the zero-savings public, is when they go to the grocery store and come home with nothing.
NOT having %100K is a greater problem for me.
While 401Ks fill the dictionary meaning of 'defined contribution', that's not the common usage in regard to Corporate Pensions as defined under ERISA.
A defined contribution pension simple posits that you have credits added to an account each year at some rate, usually a % of your salary/wage. And there's a yearly interest rate that's adjusted each year. At retirement, at the companies decision, you can get some or none of that money rolled into an IRA. Usually, most to all goes into an annuity chosen by the company - at a rate that's better for the company than you.
The amount in your 'account' is not really in a separate account, but is the same old pension-fund account used previously. If the company goes bankrupt, the feds step in and cover the pension debt at a reduced rate.
This scheme is just a way to avoid having pensions somewhat inflation adjusted by being based on the last few years salary/wage, as are usually the defined benefit plans. The laws around conversions from defined-benefit to this style of defined-contribution are hugely in the companies behavior. For folks halfway through their career (15-20 years), this cuts the total cost to the company for pension benefits in half.
401Ks are great, and give about 200+% better return than either the defined-benefit or defined-contribution pension setups as the extra market growth above the 5-7% imputed rate for corporate plans accrues to the employee, not the company.
Any pension plan except 401Ks should be illegal.
Because it's more of a conservative/liberal thing, not a Dem/Rep thing. And compassionate conservatism isn't conservative in a lot of ways.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.