(Updated)
The Feds seized the assets of mortgage lender IndyMac Bank. IndyMac is the largest single bank to be bailed out by the FDIC since the failure of Continental Illinois National Bank and Trust Company whose assets totaled over $40 billion in 1984. Continental Illinois Bank's remaining assets, 80% owned by the Fed, were eventually sold to BankAmerica in 1994.
Wow. Who's whining now Mr Gramm?
AP:
The banking regulator said Friday it has transferred IndyMac's operations to the Federal Deposit Insurance Corporation after determining the thrift is unlikely to meet its depositors' demands.
IndyMac has been struggling to raise capital and stay in business as home prices tumble and foreclosures soar.
http://seattletimes.nwsource.com/...
And earlier today, the US Treasury offered no bailout for Fannie Mae and Freddie Mac, the country's largest mortgage holders.
The fate of the government-chartered companies was a focus of trading Friday as it had been earlier in the week. Shares of Fannie Mae and Freddie Mac fell sharply over several sessions on concerns about their stability. Wall Street is worried that a collapse of the two financiers would cause further shock to the financial system, and trigger more losses to banks and brokerages with significant holdings of mortgage-backed securities.
http://www.huffingtonpost.com/...
AP Update:
The government was considering giving Fannie and Freddie access to the Fed's emergency lending program as one option to prop up the firms, said Sen. Christopher Dodd, D-Conn., citing conversations with Fed Chairman Ben Bernanke and Paulson.
http://news.yahoo.com/...
Hat tip to sclminc for finding this update from the Fed:
Press Release:
----------------------------
FDIC Establishes IndyMac Federal Bank, FSB as Successor to IndyMac Bank, F.S.B., Pasadena, California
http://www.fdic.gov/...
WSJ Update:
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.
....
The bank will be run by the FDIC and reopen Monday. The FDIC typically insures up to $100,000 per depositor. IndyMac had roughly $19 billion of deposits. Nearly $1 billion of those deposits were uninsured, affecting about 10,000 people, the FDIC said.
http://online.wsj.com/...
(hat tip: gloriana)
http://www.dailykos.com/...
Bloomberg Update: IndyMac planned to axe half its staff last Monday. So there, warning signs well before Friday's news dump.
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.
http://www.bloomberg.com/...
Commenter Neon Vincent has some great links with additional information on the origins of this banking failure.
http://www.dailykos.com/...
Also Granny Doc pointed out McCain's connection to the last S&L bail out during the late 1980s and early 1990s that led up to the Keating Five scandal.
http://en.wikipedia.org/...
And commenter bobinson explains how the banking failure trail leads straight to Phil Gramm's former chairing of the Senate Committee on Banking.
http://www.dailykos.com/...
Oh, l'est we forget that Wendy Gramm is responsible for that Enron Loophole Keith Olbermann reported, giving speculators a free reign of the oil and other energy markets. Californians remember Enron speculators very well.
<a</p>
Note: Thanks for the recommends Kossacks. A few commented on this tidbit...if true, holy freakin' cow!
Together Fannie Mae and Freddie Mac touch more than half of the nation’s $12 trillion in mortgages by either owning them or backing them.
Bush is officially the undisputed worst president in US history and one of the worst disasters to ever hit the planet.
Note:
OMG, first time on the recommended list! Thank you all for your comments, diggs, recommends and especially the tips! Have a fantastic weekend!