Today, Freddie Mac and Fannie Mae assured the government that they are adequately capitalized and that talks of a bailout are premature. Thank goodness because America had the 2nd largest bank failure in history to deal with today. Federal regulators from the OTC (Office of Thrift Supervision) have shut down IndyMac Bancorp and the FDIC (Federal Deposit Insurance Corp.) will be running it as of Monday.
Of course we know what this means, if you have more than $100,000 deposited with IndyMac, you are in trouble because as we all should know, FDIC only insures a maximum of deposits up to $100,000 per depositor per banking institution. Of course every time a bank fails, experts remind us not to deposit more than $100,000 with any one bank just in case, but we do it anyway. IndyMac customers are in for the shock of their lives on Monday. Of course, we don't have all of the details and certainly have no idea how many people on Long Island will be affected.
IndyMac, based in California, was started in 1985 by no other than Angelo Mozilo and David Loeb, the founders of Countrywide Financial. Go Figure! Their greed has now multiplied into two huge financial bombs. IndyMac suffered nearly $1 billion in losses due to its primary business in sub-prime mortgages, many of which they were unable to sell to the likes of Freddie and Fannie. In addition, our very own Senator, Chuck Schumer helped to fan the flames of IndyMac's demise. In the last few weeks, after he voiced concerns about IndyMac's shaky operations, depositors withdraw over $1 billion leaving IndyMac with a lack of capital to sustain operations.
Once the FDIC depletes much of its cash on hand for the bailout, where will it get more funds from, o' taxpayers? Alas, I shake my head.
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