Another One Bites The Dust
This one's a biggie. "The collapse is expected to cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion, potentially wiping out more than 10% of the FDIC's $53 billion deposit-insurance fund." WSJ (07.12.08), via Calculated Risk, via Eschaton:
"IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators, in the third-largest bank failure in U.S. history. IndyMac is the biggest mortgage lender to go under since a fall in housing prices and surge in defaults began rippling through the economy last year -- and it likely won't be the last." Crisis Deepens as Big Bank Fails"The director of the Office of Thrift Supervision [ed. - as in the guy who was supposed to be regulating the lending practices of financial institutions like IndyMac], John Reich, blamed IndyMac's failure on comments made in late June by Sen. Charles Schumer, who sent a letter to the regulator raising concerns about the bank's solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a 'heart attack.'" Schumer sez fuck off you ass-covering moron. "'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,' Sen. Schumer said. 'Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.'" Long and short? IndyMac was going critical long before Schumer said anything. Barry makes the point: "Why is it that all these rumor-mongerers and shorts are only bringing some firms to their knees? How come they always seem to be the over-leveraged, under-capitalized, unhedged, most poorly-managed companies?"