Feds Trying to Prevent Bank Run After Indy Mac Collapse
Posted July 14th, 2008 by Michael Nystrom
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IndyMac OK (other banks, meh, not so much maybe)
Another article: U.S. overseer says IndyMac "safe and sound" (Reuters, 7/14/08)
Excerpts (emphases mine):
PASADENA, California (Reuters) - Three days into its receivership, the former IndyMac Bank is "as safe and as sound as any bank in the country right now," John Bovenzi, the U.S. banking official running the failed bank, said on Monday, while conceding that he expects more bank failures.
Bovenzi, who oversees bank receiverships for the Federal Deposit Insurance Corp, was not surprised to see hundreds of customers waiting outside the bank's Pasadena, California, headquarters Monday morning to withdraw their money...
(...)
"There will be more bank failures," Bovenzi said. "I don't expect it to be a large number. I don't expect there will be large bank failures. There will be small bank failures."
(...)
The certificates entitle IndyMac depositors to receive more of their frozen funds as the FDIC sells off the bank's assets.
They [depositors] will likely have to wait at least several months, if not years, as the FDIC resolves IndyMac's fate.
---
I find this statement rather amusing (from the first paragraph) -- here's the first part of the statement:
IndyMac Bank is "as safe and as sound as any bank in the country right now," John Bovenzi, the U.S. banking official running the failed bank, said on Monday...
and the second part:
...while conceding that he expects more bank failures.
Therefore, IndyMac Federal is as safe and sound as the other banks that are about to fail. Gee, that gives us great confidence, Mr. Bovenzi.
Their soothing
words did not seem to do much, as people were lined up at 4am to withdraw whatever money they could, according to internet news.
5 TRILLION THATS WITH A "T"
5 TRILLION THATS WITH A "T" TRILLION TO BAIL OUT THE BANKS, FREDDIE , AND FANNIE! THIS IS HYPERINFLATION FOLKS! thyis money has to be printed... HYPER INFLATION!!!!!!!!
as for me and my home, we shall worship the LORD
Freddie and Fannie
According to Freedom Works "The top five foreign holders of Freddie & Fannie long term debt are China, Japan, Cayman Islands, Luxembourg, & Belgium with a total of $1.3 trillion in agency bonds".
Bailing out the banks
means killing off the people. Piece by piece we are being systematically taken out. Watch Money Masters to see that none of this is real. It is all being done by a select few people intentionally.
Interesting Jim Sinclair comment on the FDIC
Posted On: Monday, July 14, 2008, 4:26:00 AM EST
FDIC Says No Problem, But For How Long?
Author: Jim Sinclair
Dear CIGAs,
The first comment by the FDIC was that the only funds not insured amounted to one billion dollars, or 5% of the deposits guaranteed. If that was true then the FDIC would have put about 1/3 of its capital in play.
The following article suggests the FDIC put only 10% of its capital into play.
The FDIC says there is no problem because they can raise premiums paid by banks. Sure, but how long would it take to replace their capital if 2 or more significant banks were to fail? That replacement would likely take a decade.
All of these cosmetic insurance schemes on deposits and securities will fail to pay in cash. You will get paid in short term, renewable (but not at your decision), government notes.
Now do you see why removing as many financial agents between you and yours is so important?
Now do you see why taking paper certificates or becoming a book entry at the transfer agent is no waste of your time?
If you have not protected your share investments do it tomorrow and as a byproduct dump the shorts
Do you know does the FDIC
Do you know does the FDIC guarentee to give you your money back immediatley, or is it paid back over time?
Very good question
Anybody?
Never mind
I see in other articles that it may take a while to get your funds from a defunked bank. Quite ugly.
Tip to avoid bank run
Well, the best way to avoid becoming a victim of a run on the bank situation is to take your money out before it happens. I think.
'I always think of all you canvassors and precinct leaders and delegates at the front line and caucuses.
Good luck out there &Thank you. You're a gift.
Too big to fail
Why is it only banking corporations are too big to fail?
Why is it that the bail-outs go to the corporations but the homeowners they duped still loose their homes?
I thought it was the governments job to keep corporations from becoming too big to fail which is why they broke up ATT only to have it buy itself back up again.
The problem is this artificial entity called a corporation. An artificial legal entity with all the rights of a person but that can never die and who sole purpose is greed. Corporations should not be allowed to buy other corporations or own their stock. This would at least slow down their becoming too big to fail BS. I say let them fail and let better small businesses take their place and compete. And if no one wants to buy the mortgage paper then release it.
Don't question the banks policies
It is irresponsible and will lead to a run on the bank; leading to a full on collapse. That's basically what she said.
If banks are that vulnerable people should question them, or not even trust them at all.
A capitalist in need is a socialist indeed!
Privatize your profits--socialize your losses. That should be the motto in corporate America. So why do we have to bail them out?
The question and answer
The question and answer session with Melanie Hobson was so scripted it made me laugh. I find it inconcievable that everyone's bank account in the country could be backed up by FDIC insurance. My gut instinct about FDIC is that it is a fraud. They might be able to back up a few bank failures, maybe a dozen or two, but not all of them. No way! Even if they did, they would just be calling the fed to back them up with more worthless paper currency.
Things are only impossible until they are not.
-- Jean Luc Picard
FDIC
No, don't believe it's a fraud. But if you go to their site, you will see that they have about 49 billion (fractional reserve too) in assests to cover bank closures. The Indy bank just apparently cost them between 4 to 8 billion, so a few more and they will be insolvent too. Remember, they are just an insurance company too and there to give people a "safe" feeling. Insurance companies go broke too and they will if several more fail. Don't know if you've had to argue with an insurance company before, but I'd rather not have to in order to get my own money back.
Print Some Money
So will the Fed just start up the dollar printing presses to bail out failing banks, while further destroying the dollar?
Or did the Fed only have buddies at Bear Stearns?
Many more US bank failures likely after IndyMac
http://www.guardian.co.uk...
Many more US bank failures likely after IndyMac
Sunday July 13 2008
By Jonathan Stempel
NEW YORK, July 13 (Reuters) - U.S. banks may fail in far greater
numbers following the collapse of the big mortgage lender IndyMac
Bancorp Inc, straining a financial system seeking stability after
years of lending excesses.
More than 300 banks could fail in the next three years, said RBC
Capital Markets analyst Gerard Cassidy, who had in February estimated
no more than 150.
Banks face pressure as credit losses once concentrated in subprime
mortgages spread to other home loans and debt once-thought safe. This
has also led to investor worries about the stability of mortgage
finance companies Fannie Mae and Freddie Mac; IndyMac is not related
to either.
While analysts declined to say which banks will fail next, several
smaller lenders and one large one, Washington Mutual Inc, appear
already to have elevated levels of soured loans, relative to their sizes.
"You have to look at companies with the greatest exposure to the
highest-risk assets, which include construction loans and exotic
mortgages," Cassidy said. "The final nail in the coffin for any
depository institution would be a funding crisis where it is unable to
gather deposits at reasonable cost, or wholesale funding markets are
cut off."
yep its just now
yep its just now starting!
as for me and my home, we shall worship the LORD
Fantastic article
covers so much of the litigation happening against banks, but there is this precious paragraph in their that's very telling. It's long, but important.
www.webofdebt.com/article...
Putting the Genie Back in the Bottle
So what would happen if the mega-banks engaging in these irresponsible practices actually went bankrupt? These banks are widely acknowledged to be at fault, but they expect to be bailed out by the Federal Reserve or the taxpayers because they are “too big to fail.” The argument is that if they were allowed to collapse, they would take the economy down with them. That is the fear, but it is not actually true. We do need a ready source of credit, so we need banks; but we don’t need private banks. It is a little-known, well-concealed fact that banks do not lend their own money or even their depositors’ money. They actually create the money they lend; and creating money is properly a public, not a private, function. The Constitution delegates the power to create money to Congress and only to Congress.12 In making loans, banks are merely extending credit; and the proper agency for extending “the full faith and credit of the United States” is the United States itself
It gives the government the authority to coin gold and silver.
One of their only true functions.
Creating money and coining money aren't the same thing anymore.
___________
Lisa C.
“Elections are short term efforts; revolutions are long term projects.”
--Ron Paul
Join the rEVOLution here: http://www.campaignforlib...
Get to an ATM or a bank first thing n the morning lol
I personally don't believe for one second, the public is going to hang back and relax when things cost as much as they do today. If the public is that stupid, they deserve it. The last of my shit is out of there in the AM, (although most of it has been already for a while.) No government and media propaganda machine is going to suddenly, successfully, comfort me. I don't give a shit about their bank problem. It is exactly that - Their bank problem. Not mine.
And down comes the house of cards! Heh heh, so beautiful. Better buy metal regardless of the price, and real fast too.
This is a good article by
James Turk - a former Federal Reserver
http://www.goldmoney.com/...
They try to spin it
Henry Paulson says it's a "housing correction", not a crisis. ABC talked about how safe the money is below $100k, but nothing about those who have more then $100k. Melody Hobson was alluding to blaming Shumers comment about the condition of the bank. Actually, he's the hero for warning people, because just recently, the Wall Street Journel just release a dirty laundry list of Fannie Mae's horrible track record:
http://online.wsj.com/art...
Correction, ABC says .50 cents on the dollar over $100k.
-
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$200,000 on joint accouts?
I was just pulling some funds from an uninsured Citigroup brokerage account into a federally-insured credit union, and was told that the $100,000 limit is doubled for a (two-person) joint account. I haven't seen anything about that in the news.
(Granted; Credit Unions, Banks, and Savings-and-Loans each have a separate federal insurance system. But I was under the impression that the terms were essentially identical - if only to avoid a tendency for us cattle, during hard times, to stampede from one type of institution to another due to differences in the rules, thrashing the already-shaky market in the process.)
Edit: Did some digging. If all the participants in a joint account have equal withdrawal rights and have signed signature cards on file with the bank/cu/S&L, they are EACH insured for $100,000. Thus if that's the only account they each have with that institution the total insurance on it is $100,000 times the number of joint particpants. So a husband/wife joint account is insured for $200,000 IF it's the only account they have with that bank/whatever. (Gets complicated if they have other accounts, unequal rights, etc.)
what's your plan when the
what's your plan when the FDIC goes under? Ever hear of a "husband/wife mattress account"?
We're moving it into other
We're moving it into other investments over the next few months.
This particular move is just an emergency measure - to get the cash:
- out of an UNinsured account (where, if the brokerage goes under, it will just vanish) and
- into insured accounts (were, if the institutions go under the FDIC will pay off and if the FDIC goes under the Fed will print some more money and we'll still have the same number of dollars, even if diluted by the printing press {along with all the other dollar-denominated assets in the economy}).
If nothing else, keeping the dollar count means we can use it to pay off the mortgage, no matter how much the government inflates the currency. B-)
The long-term solution to being on a sinking ship in a storm is to get to land (or at least a non-sinking ship). Being in a lifeboat in a storm is decidedly not a long-term solution - and often worse than staying on the sinking ship. But sometimes it's a good, or even necessary, intermediate step.
bump
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Ron Paul Supporter Since 1997
“We have allowed our nation to be over taxed and over regulated and overrun by bureaucrats, the founders would be ashamed of us for what were putting up with” Ron Paul