IndyMac Bancorp Inc. became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash.
The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mailed statement today. Customers will have access to funds this weekend via automated teller machines. Regulators intend to eventually sell the company.
Wondering why the financials are like lead sinks? Poole said in an interview:
Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he said. The fair value of Fannie Mae's assets fell 66 percent to $12.2 billion, data provided by the Washington-based company show, and may be negative next quarter, Poole said.
``Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer,'' Poole, 71, who left the Fed in March, said in the interview yesterday.
I am finding this most telling, Forbes (along with a flurry of articles on bank failures) reports:
U.S. Treasury Secretary Henry Paulson said Wednesday the United States must find a way regulators can allow investment banks to fail without threatening the stability of the financial system
It's kind of sobering for people who have been listening to the company these last six to nine months that they had everything under control,'' said David Hendler, an analyst at CreditSights Inc. in New York. ``They've got to start thinking about selling a strategic stake or selling the firm because there's just not enough business to go around
It appears options traders are pointing to a possible collapse.
Bear Stearns got emergency funding today from JPMorgan Chase & Co. and the New York Federal Reserve. The New York Fed agreed to provide financing through JPMorgan for up to 28 days, the bank said in a statement
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