RE: USA Banking Massive Collapse & What That Means To YOU

[Mrs. Sharon B. Hodge]

Depression 2008 Martial Law USA


Jim Rogers Speaks the Truth about Fannie Mae and Freddie Mac - July 15, 2008



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Washington offers no relief for savers
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Associated Press
Monday August 18, 1:35 pm ET

http://biz. yahoo. com/ap/080818/uneasy_economy_where_s_the_outrage...

By Jeannine Aversa, AP Economics Writer
Assailed by low savings rates and falling shares, savers find no relief from Washington

WASHINGTON (AP) -- Two giant mortgage companies get into hot water over risky investments.
The government steps in to throw them a lifeline should they need it

Hundreds of thousands of Americans buy homes more expensive than they can afford.
Congress approves a rescue package

Troubles erupt at a Wall Street investment firm that made bad bets on mortgage investments.
The Federal Reserve steps in and provides financial backing for the company's takeover

Meanwhile, tens of millions of people pay their mortgages on time, don't max out their credit cards and put money into retirement funds.
They may even save a little extra on the side

In return, they get rates on their savings that don't even keep up with inflation.
They also are witnessing the horror of their nest eggs shrinking as the value of their homes plummets and the stock market tumbles

Washington policymakers seem more focused on rescuing those who behave badly by putting at risk taxpayers who've played by the rules and shunned the get-rich-quick schemes of Wall Street croupiers

If the government can toss a lifeline to troubled mortgage underwriters Fannie Mae and Freddie Mac, they why won't they do something for Americans who save their money?

Why aren't the nation's savers storming the Federal Reserve or the Treasury Department or the halls of Congress demanding that something be done for them?

"Perhaps there is a mentality that you can't beat city hall," ponders financial adviser and author Ric Edelman

Or, maybe it's just that the mentality of people who are savers also helps make them flexible enough to roll with the punches

"I'm not a crybaby about what goes on in the world," says Cathy Tozzi, 70, a retired school finance director

The elderly -- who are no longer working and are living off their income from savings and other investments -- are getting walloped by the current economic hard times

"People like my mom. You expect them to be upset.
People who are doing a lot of saving now versus people who are done saving are two very different groups," said John Huizinga, professor of economics at the University of Chicago's Graduate School of Business

Tozzi, who lives in Brooklyn, N.Y. has cut back. "I shop at the 99 cent stores. There are ways of saving money.
" Even so, she worries about inflation "eating into my savings"

People who grew up during the hardships of the Great Depression are from a generation that was more frugal and knew how to save.
To them, debt was a dirty word

"They grew up with the mentality that you make the best of what is handed to you. They don't worry they won't make it to Rome or Paris this year. They will settle for a car trip," says Alan Hilfer, director psychology at Maimonides Medical Center in Brooklyn, N.
Y

The average rate on a one-year CD these days is around 23 percent, according to Bankrate. com However, inflation has been rising closer to 5 percent over the past year, so savers are seeing their returns wiped out

"Savings are taking it on the chin," says Greg McBride, senior financial analyst at Bankrate. com "The Fed's rate cuts geared to aiding ailing homeowners with adjustable-rate mortgages have come at the expense of savers and retirees dependent on fixed income," he said.
"For the past 12 months, there has been a double whammy for savers as interest rates have fallen and inflation has increased"

The average rate on a savings account is a rock bottom 0.37 percent, Bankrate says. That's even worse than the 0.
46 percent rate for the same time last year

David Middleton and others are so mad about the situation in Washington that they got together and formed the grassroots group, Fed Up USA.
The group -- whose members number around 40 -- have protested in Washington and elsewhere against "federal financial irresponsibility"

Middleton, 32, who once worked in the information-technology field and is now self employed, says he was spurred to put on an "activist hat" earlier this year. That's when the Fed provided a loan of $28.82 billion as part of JPMorgan's takeover of the ailing Bear Stearns. "I was outraged. These companies make their decisions and their bets and they should be responsible for that.
They should not be bailed out on the backs of the taxpayers," he said

He was equally aghast at the sweeping housing-rescue package approved by Congress and signed into law by President Bush last month.
The package provides cheaper mortgages to struggling homeowners and lets the government lend money to Fannie Mae and Freddie Mac or buy their stock should they need it

Mike Shedlock, who writes the popular blog Mish's Global Trend Analysis, urged his readers to contact their elected officials in Washington to vote against the Fannie and Freddie aid package.
Some people didn't think it would make a difference in the outcome but they wrote protest letters anyway, he says

"People are getting disgusted," says Shedlock. At the same time, he acknowledged trying to motivate people to rise up is tough.
Shedlock frets that the United States is "being run into the ground in debt" by Washington

Washington policymakers -- in Congress, the Bush administration and at the Fed -- should hold banks, investment firms and other involved in the nation's financial debacles accountable for their actions, Middleton said.
And, policymakers should bolster their oversight and provide more information to the public

Middleton said he stakes out evening church events to pass out fliers

"We really want to get the message out to people," he said

Getting the word out, may be easier than getting Washington to come around. Middleton has written letters to Fed Chairman Ben Bernanke and his lawmakers in Washington. "I got back the standard form letter ... thank you for your comment," he says

Bernanke and Treasury Secretary Henry Paulson have said the rescues were necessary to avert a broader financial meltdown. And, the Fed's rate cuts -- while providing some relief to distressed homeowners with adjustable-rate mortgages -- were aimed at shoring up the wobbly economy.
That benefits everyone -- savers and the profligate alike

Older savers may feel that keeping their hard-earned money mostly in a bank is the safest way to go, especially as they watch some of the big nosedives on Wall Street

Yet, the recent collapse of IndyMac and some other banks is increasing anxiety about that, experts say.
"Who is supposed to be more on top of financial things than a bank? But banks made all these terrible mortgage loans and caused these disruptions, and we are dependent on them for our (financial) security," Hilfer says

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Large U.
S bank collapse ahead, says ex-IMF economist
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Reuters
By Jan Dahinten
8-19-08

http://news. yahoo. com/s/nm/20080819/bs_nm/usa_banks_crisis_dc

SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S.
bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday

"The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps.
I would even go further to say 'the worst is to come'," he told a financial conference

"We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund's chief economist from 2001 to 2004

"We have to see more consolidation in the financial sector before this is over," he said, when asked for early signs of an end to the crisis

"Probably Fannie Mae and Freddie Mac -- despite what U.S.
Treasury Secretary Hank Paulson said -- these giant mortgage guarantee agencies are not going to exist in their present form in a few years"

Rogoff's comments come as investors dumped shares of the largest U.S. home funding companies Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalize the U.S.
housing finance titans

A government move to recapitalize the two companies by injecting funds could wipe out existing common stock holders, the weekend Barron's story said.
Preferred shareholders and even holders of the two government-sponsored entities' $19 billion of subordinated debt would also suffer losses

Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces

"There was this view early on in the crisis that sovereign wealth funds could save everybody.
Investment banks did something stupid, they lost money in the sub-prime, they're great buys, sovereign wealth funds come in and make a lot of money by buying them

"That view neglects the point that the financial system has become very bloated in size and needed to shrink," Rogoff told the conference in Singapore, whose wealth funds GIC and Temasek have invested billions in Merrill Lynch and Citigroup

In response to the sharp U.S. housing retrenchment and turmoil in credit markets, the U.S. Federal Reserve has reduced interest rates by a cumulative 3.
25 percentage points to 2 percent since mid-September

Rogoff said the U.S.
Federal Reserve was wrong to cut interest rates as "dramatically" as it did

"Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States"



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To America, with Shame
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Fannie Mae, Freddie Mac and the free fall of the US economy

By John Sakowicz

http://www. bohemian. com/bohemian/08. 06. 08/news-0832. html

This is the fourth of a multipart series on the state of the economy and how we got here,

Let's talk about evil, The evil I'm talking about is not just the $29 billion taxpayer-funded bailout of Bear Stearns, about which I have previously written, It's not the billions of dollars that are now being lent from the Fed's "discount window" to Wall Street's broker-dealer community—those like Merrill Lynch, UBS, Morgan Stanley and Lehman Brothers—on a daily basis, It's not even such banks as Citigroup, Bank of America, Wachovia and IndyMac that lent recklessly during the subprime era and are also borrowing heavily just to keep afloat during the current credit crisis, And really, it's not the recent bailout of Fannie Mae and Freddie Mac that the US Budget Office conservatively estimates will cost taxpayers $25 billion to $30 billion,

No, the evil I'm talking about is the evil that lies buried in one paragraph of the 694-page housing bill that was passed by Congress and signed by President Bush last week, It is the evil of a monstrous national debt, some $10,615 trillion, authorized in Section 3083 of that bill called "Increase in Statutory Limit on the Public Debt," The 10 zeroes found in $10,615 trillion represents an increase of $800 billion, and the first time the limit on the government's credit card has grown to 14 digits,

But the real evil—an evil that underlies even the evil of our national debt—is the attitude of the Bush administration illustrated in what Dick Cheney said to former secretary of the treasury Paul O'Neill during a Cabinet meeting on Jan, 19, 2004, "Deficits," he dismissed, "don't matter,"

It is the evil of the fall of America, as we lose our leadership position in the global marketplace, It is the evil of the fall of a once great nation—under God, with liberty and justice for all—as the dollar collapses and our trading partners lose confidence in the United States to pay its bills and honor its agreements,

Hoping to stretch a safety net under hundreds of thousands of families losing their homes to foreclosure is not such a bad thing, right? Trying to limit the shock waves in credit markets as they ripple from the housing sector all across the American economy and the world financial system is not such a bad thing, right?

Well, the answer is yes, And no, As usual, it kind of depends on with whom you speak, During the week of July 28, I attended six D, C, press conferences as politicos rolled out their plans for the housing bill,

"The bill will make a big difference not only in the housing market, but also in the entire economy," said Sen, Harry Reid, Senate Majority Leader, The White House agreed in a rare show of bipartisan agreement, "It's good that the Democratic Congress has finally acted," said Tony Fratto, the deputy White House press secretary,

This is all true,

As many as 400,000 Americans families will be saved from foreclosure in the near future, Up to $300 billion will be available in refinanced mortgages to help borrowers at risk of losing their homes by trading in "unaffordable" mortgages for mortgages backed by the government, Also, there will be grants of $4 billion to local governments to buy and refurbish properties that have already been foreclosed upon, and in many cases, also abandoned,

There will be loan limits on reverse mortgages, popular with many senior citizens, and the maximum fees that lenders can charge seniors on these mortgages will also be reduced, First-time buyers who purchase homes from April 9, 2008, to July 1, 2009, will be eligible for a tax credit of $7,500, There will be new housing tax benefits for veterans, too, And of course, there are also tax breaks for homebuilders and other large corporations,

For all consumers—not just past homebuyers—there will be new laws requiring fuller disclosure and clear language used in variable-rate mortgage contracts, And there will be stricter broker oversight, New minimum standards will be set for licensing mortgage brokers and bank loan officers, And the Feds will authorize state and local housing agencies to issue up to $11 billion in tax-exempt bonds to refinance bad mortgages not eligible in any other program,

Almost unnoticed in the bill is a small provision for creating a permanent affordable housing trust fund, with the long-term goal of building more rental housing for people too poor to buy homes, (Why didn't anybody think of this first, before all the subprime borrowers were preyed upon and lent to?)

This all sounds good, So what's the problem?

Here's the problem, The housing bill just signed by the president is the latest in a series of extraordinary interventions by the Bush administration, Congress and the Federal Reserve to bail Wall Street out, And it gives broad—and unprecedented— authority to the Treasury Department,

On the surface, the bill looks good, It safeguards two mortgage finance giants, Fannie Mae and Freddie Mac, by presumably spending only a few billion to prevent the collapse of the two companies which own or guarantee half of the nation's $12 trillion in mortgages, Look more closely and you'll see two corporations controlled by Wall Street's robber barons, and used by them as their personal Speed Queen heavy-duty, industrial money-laundering machines,

Look even more closely and you'll see the little-noticed Section 3083, You see a national debt ceiling raised by $800 billion, because we are blackmailed into thinking our economy will collapse if we don't raise it, Imagine that $800 billion spent on our nation's schools, healthcare or decaying infrastructure, Imagine an $800 billion investment in alternative energy and our nation's energy independence,

Again, remember that this bailout insures up to $300 billion in refinanced mortgages, The remainder—$500 billion—could conceivably be spent on other bailouts that loom ahead,

Even Secretary of the Treasury Henry Paulson, the architect of the rescue plan, said he never expected to be given this much new authority, The only real limit on his spending is the new $10,615 trillion debt ceiling,

Critics in Congress who voted against the bill voiced concern that we were rewarding Wall Street's greed, They argued that we, as a nation, were rewarding predatory lending practices, They argued that we were rewarding massive fraud, They specifically argued that the housing bill bails out the banks and broker-dealers that are joined at the hip with Fannie Mae and Freddie Mac through the trillions and trillions of dollars of those bogus insurance policies against default called credit-default swaps,

Finally, critics in Congress were outraged we were rewarding lobbyists—lobbyists hired by the fat cat executives at Fannie Mae and Freddie Mac—at a cost to taxpayers of tens of millions of dollars, Yes, you, the taxpayer, paid for Fannie Mae and Freddie Mac's lobbyists for this bill, How's that for adding insult to injury!

"This bill has fallen prey to the special interests on Wall Street and K Street at unjustifiable expenses to taxpayers and homeowners on Main Street," said Sen, Charles Grassley, R-Iowa, who voted against the bill even though he had worked on many of its tax provisions in committee,

"The bill should have barred the mortgage companies from spending millions to lobby Congress to raise our national debt," said Sen, Jim DeMint, R-S,C,

A look at the history books shows that there is no precedent for this bailout, Not the 1989 response to the savings and loan crisis, Not even the creation of the Home Owners' Loan Corporation in 1933 that was part of the New Deal, There's also no precedent for this national debt, Yet no one seems worried,

During the week I spent in Washington reporting this story, I have concluded that we are a nation of disinterested and mostly happy bystanders, Polling data tells us this much: As long as our paychecks clear every two weeks, we are happy, As long as our beer is cold, we are happy, As long as we have a warm puppy to hold, we are happy, As long as we can fill up our Chevy Mastodons, we are happy, As long as we have HBO and Showtime, we are happy, As long as we are not foreclosed upon and homeless, we are happy,

A $10,615 trillion national debt is more than we want to think about, Fannie Mae and Freddie Mac are also more than we want to think about, We like to think of the United States as a participatory democracy It is—but only in theory, Participatory democracy is for the disgruntled and for kooks,

This is what we're not told: Fannie Mae and Freddie Mac are not essential to the mortgage market, If they were phased out over five or 10 years, the market would absorb the business they left behind, That's the way competitive markets work, Fannie and Freddie exist only to guarantee debt-backed securities, like CMOs, CDOs and SIVs,

These are securities that were underwritten by the robber barons of Wall Street and that were pushed by the new master race on Wall Street—the prime brokers working in the shadow banking system—and that are now held by chumps who were lied to: pension plans, insurance companies, mutual funds, hedge funds and other institutional holders,

Fannie and Freddie were only in the insurance business, a business now corrupted by credit-default swaps and other swaps and derivatives, things that didn't exist 10 years ago, So why bail out Fannie and Freddie? And why give them special advantages that suppress competition?

Because Fannie and Freddie spent more than $170 million for lobbyists in the last decade, more than what our No, 1 defense contractor, General Electric, spent,

Because senior executives at Fannie and Freddie get annual pay packages that they don't want to lose, In 2007, Freddie Mac paid chairman and CEO Richard Syron $19,8 million, even though the company's stock lost half its value, Meanwhile, at Fannie Mae, president and CEO Daniel Mudd got a 7 percent raise, Total compensation: $13,4 million, including a $5,4 million stock award, Again, the mortgage company lost billions during 2007,

Other government agencies can't hire lobbyists or award exorbitant CEO bonuses, so why Fannie and Freddie? Because Wall Street's balance sheets are too inextricably linked to Fannie and Freddie, As the stock prices of Fannie and Freddie go, so does much of Wall Street,

But mainly because other federal bailouts are looming on the horizon, William Poole of the Cato Institute, a chief executive at the Federal Reserve Bank of St, Louis from 1998 to 2008, said last week, "Congressional inaction and taxpayer indifference over the last 15 years has committed us to a generation of bailouts,"

With a debt ceiling of $10,615 trillion, our children, and our children's children, will be paying the price, And this is evil, We have mortgaged their futures,

I am deeply ashamed of my generation's apathy and willful ignorance, Here and now, I apologize to my children and any future grandchildren for blowing it,

It's too late to get out of the bailout business, Too late, The stock and bond markets sank, Treasury securities sank, The dollar sank, The national economy sank, The world economy sank,

In my generation, everything sank,

We may be a nation of the stupidly happy, but at this time in our history I am reminded of Pablo Neruda's "Song of Despair": "You swallowed everything, like distance, / Like the sea, like time, In you, everything sank,"

At the Group of Seven (G7) conference in Tokyo this year, Gilles Moec, chief economist for Bank America London, said it all, "The problems are going through financial markets in all parts of the world, right now, There's not much we can do about it—not the G7, not anybody, The danger is that a real depression will turn into a self-fulfilling prophecy,"



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Hundreds of banks will fail, Roubini tells Barron's
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Reuters
Sun Aug 3, 2008

http://www. reuters. com/article/mergersNews/idUSN0344130720080803

NEW YORK, Aug 3 (Reuters) - The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron's in Sunday's edition

Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said -- at least $1 trillion and more likely $2 trillion

The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron's reported

He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too

U.
S consumers, meanwhile, are "shopped out" and saving less, while the Federal Reserve's performance in handling the crisis has been poor, Roubini said, because it failed to see that the problem extended beyond subprime mortgage debt

Now, Roubini told Barron's, the government is overregulating, bailing out troubled participants and intervening in every market

"The regulators should investigate themselves for bailing out Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the creditors of Bear Stearns and the financial system with new lending facilities. They have swapped U.S. Treasury bonds for toxic securities," he told Barron's.
"It is privatizing the gains and profits, and socializing the losses as usual This is socialism for Wall Street and the rich"

He said that sometimes it is necessary to use public money to rescue institutions, but in a way that does not bail out the people who made the mistakes "In each one of these episodes, the government bailed out the shareholders, the bondholders, and to some degree, management," Roubini told Barron's

As for the banks that will go bankrupt, they will include community banks that finance homes, stores, downtown areas, commercial real estate and other mainstays of U.
S towns and cities, Roubini said

"Of three dozen or so medium-sized regional banks, a good third are in distress," he told Barron's, saying half of the group could go bankrupt Some big banks could wind up insolvent, he added, but said they might be deemed too big to fail

Nouriel stressed that he is "quite bullish" about the state of the global economy and that he is positive about the medium and long term


Sure this 'FEDERAL' agency will protect all your hard earned savings - As a stooge of FOREIGN banking illuminati pigs like ROTHSCHILD empire you can trust your LIVES to these monsters who are deliberately trashing the US economy!



..
George Green's latest July Warning - GET OUT NOW

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IndyMac Files for Bankruptcy Protection
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REUTERS
Published: August 2, 2008

http://www. nytimes. com/2008/08/02/business/02lender. html?_r=3&am...

IndyMac Bancorp, the third-largest banking failure in United States history, said Friday that it had filed for bankruptcy protection, less than three weeks after being seized by federal regulators following a bank run by depositors

Skip to next paragraph The company, based in Pasadena, Calif.
, filed for Chapter 7 protection on Thursday with the federal bankruptcy court in Los Angeles, indicating it plans to liquidate IndyMac said it expected the court will appoint a bankruptcy trustee promptly

The filing was widely expected.
It does not include IndyMac Federal Bank, which is now run by the Federal Deposit Insurance Corp and is the successor to IndyMac’s former banking unit Most deposits in IndyMac Federal are insured up to $100,000

IndyMac Bancorp, the holding company, has $50 million to $100 million of assets, $100 million to $500 million of liabilities, and fewer than 50 creditors, according to the bankruptcy filing

The collapse of IndyMac was the largest U.S.
banking failure in two decades Regulators at the time said IndyMac ended March with about $32 billion of assets, and about $19 billion of deposits, most of which were insured

IndyMac was the fifth of seven bank failures this year, the F.D.I.
C said

IndyMac once specialized in "Alt-A" and other below-prime home loans, which often did not require borrowers to fully document income or assets

It collapsed as borrower defaults began to mount, while tight capital markets forced it to take losses on mortgages it sold and kept on its books

This can happen to ANY of us, at ANY bank - US economy is coming to a total collapse and time is running out for total withdrawl


Police keep an eye on customers waiting outside of an IndyMac Bank branch in Encino, Some depositors wait for hours in line, then complain of difficulty getting their money Police are called at branches in Encino and Northridge




ABC News 7-14-08 - THOUSANDS WITHDRAW MONEY FROM COLLAPSING INDYMAC BANK


Reuters 7-15-08 IndyMac customers line up for cash

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Cops to IndyMac customers: Remain calm or face arrest
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Daily News Wire Services
07/15/2008

http://www. dailynews. com/breakingnews/ci_9887404

Police ordered angry customers lined up outside an IndyMac Bank branch to remain calm or face arrest Tuesday as they tried to pull their money on the second day of the failed institution's federal takeover

At least three police squad cars showed up early Tuesday as tensions rose outside the San Fernando Valley branch of Pasadena-based IndyMac

Federal regulators seized Pasadena-based IndyMac on Friday and reopened the bank Monday under the control of the Federal Deposit Insurance Corporation Deposits to $100,000 are fully insured by the FDIC

Worried customers with deposits in excess of insured limits flooded IndyMac Bank branches on Monday, demanding to withdraw as much money as they could or get answers about the fate of their funds

When it was clear some wouldn't get in before closing, FDIC employees apparently took down names and told them to return Tuesday

Other customers began lining up at 1:30 a.
m Tuesday, and by dawn, tensions escalated because people on the list were getting priority

By 8 a.
m, about 50 people on the list waited in one line and many more waited in another

Five people were allowed in at a time

Customers became infuriated, and police told them they could be arrested if they didn't remain calm

Police stood by at some other branches around Southern California but there were no other reports of problems

For more news and observations about crime in Los Angeles



A customer argues with Robert Brown, right, from the Federal Deposit Insurance Corp, while Hanita Horowitz, center, explains how she had waited in line more than 10 hours the day before They are in front of Indymac Bank in Encino


Lillian Krasn, left, tells a news crew how long she has been waiting in line at IndyMac Bank in Encino


Pasadena police officer Chris Burchett is on crowd-control duty outside the IndyMac Bank in Pasadena


At least a hundred people wait in line in front of IndyMac Bank in Encino on Tuesday


Russell Arjoon from Santa Clarita said he had been waiting since 5 a.
m in a line to enter the IndyMac Bank branch in Encino on Tuesday Tensions rose outside the branch when patrons accused others of cutting in line, and police were dispatched to calm the crowd


Jerry Weiner sits in his walker waiting with wife Ann to enter the IndyMac Bank branch in Encino just after it opened at 8 a.m.
Tuesday They said Ann brought Jerry, a World War II veteran captured in the Battle of the Bulge, to wait in line after removing him from the hospital Jerry said his intention was to pull his retirement and all funds out of the bank if he could get in Tuesday morning

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Confusion at IndyMac fuels customers' anger
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Los Angeles Times
July 16, 2008

http://www. latimes. com/news/printedition/front/la-fi-indymac16-20...

Police keep an eye on customers waiting outside of an IndyMac Bank branch in Encino

Some depositors wait for hours in line, then complain of difficulty getting their money Police are called at branches in Encino and Northridge

Los Angeles Times
By Andrea Chang, E Scott Reckard and Kathy M Kristof
July 16, 2008

Depositors of failed IndyMac Bank endured long waits in the summer heat for a second day Tuesday, with crowds becoming irate at several branches and customers with large accounts complaining of serious problems in getting their money

Banking experts said the chaotic scenes risked touching off runs on other banks unless federal regulators quickly cashed out insured accounts and gave depositors accurate information about their funds

The Federal Deposit Insurance Corp took over Pasadena-based IndyMac late Friday and has assured depositors that accounts with $100,000 held in a single name or $250,000 in a retirement account are safe

But many customers have said that when they checked their balances online, tens of thousands of dollars appeared to be missing.
And when they went to branches in search of answers, they encountered lines hundreds of people deep and unhelpful staff members On Tuesday, reports of unruly crowds brought police to branches in Encino and Northridge, although there were no arrests or injuries

Noelle Gabay of Northridge, a budget analyst for the state of California, said FDIC officials acknowledged that she was owed $213,500 but provided her access only to $99,000

"My trust in the FDIC is gone," said Gabay, 49 "The question is now, where do we put our money? Do we buy a bigger mattress?"

Bert Ely, a banking consultant in Arlington, Va, whose clients include financial-services trade groups, said the IndyMac situation was "generating anxieties all across the country"

"They should have been better prepared for this," he said, adding that regulatory oversight of IndyMac had been lax

Ely noted that the bank, hobbled by massive defaults on loans made at the height of the real estate market, was not on the FDIC's list of troubled institutions as of March 31. It was placed on the list in June. However, he said IndyMac's fall was hastened by public questions from Sen. Charles E. Schumer (D-N.Y.
) last month about the bank's strength -- comments that apparently helped trigger a $13-billion run on deposits

Schumer has responded to such criticism by saying that IndyMac brought on its own problems by engaging for years in "poor and loose lending practices" that regulators should have prevented

Longtime bank analyst Frederick Cannon, chief equity strategist for Keefe, Bruyette & Woods, said because of the distress at IndyMac, executives at other banks "are working very actively with their depositors to explain how insurance works, and what's covered"

Read The Rest HERE
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Customers wait outside of the IndyMac headquarters in Pasadena for the bank to open The FDIC took over ailing IndyMac bank on Friday

IndyMac headquarters in Pasadena, The federal regulators who seized IndyMac Bank late last week reiterated Sunday that its branches would be open as usual Monday morning

A long line forms outside the IndyMac headquarters in Pasadena before the bank's opening Monday morning

Customers wait outside of the IndyMac branch in Irvine Officials of the Federal Deposit Insurance Corp sought to assure customers -- at least those who had less than $100,000 deposited or less than $250,000 in a retirement account -- that their money was safe and would be fully accessible today

A customer peers in the widow while joining dozens of concerned people lining up at the Irvine branch of IndyMac Federal Bank on Monday

A poster behind customers lined up at the Irvine branch of IndyMac Federal Bank says, "You can count on us" The FDIC took over ailing IndyMac Bank on Friday and opened Monday under new management of the federal government

The line outside of the IndyMac headquarters in Pasadena wraps around the block

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Banks hit by fallout from the crisis at IndyMac
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Some depositors at the failed thrift, seized by regulators, leave without all of the funds that were in their accounts Bank shares slide, but institutions say they are well-capitalized

Los Angeles Times
By E Scott Reckard and Andrea Chang
July 15, 2008

As thousands of customers waited hours in the heat Monday to withdraw deposits from failed IndyMac Bank, investors dumped the stocks of many mortgage lenders, precipitating the steepest one-day decline in banking shares since 1989

Southern California fixtures Downey Financial Corp. and FirstFed Financial Corp.
, specialists in the nontraditional mortgages that fueled the housing boom, were among the hardest hit, with their stock prices down 24% and 19% respectively Shares of Washington Mutual Inc, the biggest savings and loan, fell nearly 35%

Keefe, Bruyette & Woods bank analyst Frederick Cannon said one big fear for the banks was that depositors, seeing what was happening on Wall Street, would begin to pull their funds out That, he said, could create risks for even a reasonably healthy bank in a hurry

Branches of Pasadena-based IndyMac, which federal regulators seized late Friday, were thronged by customers, many of them elderly, seeking to withdraw deposits, even though most were fully insured by the Federal Deposit Insurance Corp

The FDIC, which was running Indymac on Monday, sought to reassure depositors with less than $100,000 held in a single name or $250,000 in a retirement account that their money was safe

But an estimated 10,000 IndyMac customers had deposits that exceeded those limits. Among them was 70-year-old Charles Tengeri, a retired teacher from Pasadena, who arrived at IndyMac's headquarters at 4 a.
m and grabbed one of the first spots in line

Read The Rest HERE




People wait in line for an IndyMac Bank branch to open under federal management at the company's corporate headquarters in Pasadena, California July 14, 2008

Customer Charles Tengeri speaks to the media after withdrawing his money from IndyMac Federal Bank Monday, July 14, 2008, in Pasadena, Calif, as customers lined up to pull as much money as they could from the failed financial institution

A man walks away after reading notices about the federal management takeover of IndyMac Bank at the company's corporate headquarters in Pasadena, California July 14, 2008 Regulators seized Pasadena-based IndyMac on Friday after a bank run in which customers withdrew $13 billion of deposits over 11 business days, as worries about the company's survival grew, regulators said

People wait in line for an IndyMac Bank branch to open under federal management at the company's corporate headquarters in Pasadena, California July 14, 2008 Regulators seized Pasadena-based IndyMac on Friday after a bank run in which customers withdrew $13 billion of deposits over 11 business days, as worries about the company's survival grew, regulators said

Customer Therese Lum reads a sign taped to the front door of IndyMac Federal Bank Monday, July 14, 2008, in Pasadena, Calif, as customers lined up to pull as much money as they could from the failed financial institution


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IndyMac depositors line up for cash after seizure
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Reuters
Mon Jul 14, 2008

http://www. reuters. com/article/topNews/idUSWA000014120080714?feed...

By Gina Keating

PASADENA, California (Reuters) - Hundreds of worried IndyMac Bancorp Inc customers descended on the company's branches on Monday to withdraw their money, after regulators seized what was once one of the largest mortgage lenders in the United States

Regulators took over the Pasadena-based lender on Friday after a bank run in which customers -- panicked over IndyMac's survival prospects -- withdrew $13 billion over 11 business days, regulators said

At a branch at IndyMac's headquarters, customers began arriving at 4 a.
m, five hours before the doors opened The Federal Deposit Insurance Corp now operates the thrift's 33 Southern California branches

"I didn't think anything like this would happen," said retired teacher Charles Tengeri from Pasadena, who was first to emerge from the branch after withdrawing $171,000 -- about two-thirds of his life savings "I withdrew as much as I could I know it's going to take a little time"

The FDIC said the renamed IndyMac Federal Bank will cover insured deposits, mostly up to $100,000, and initially cover 50 percent of uninsured deposits

"I have $360,000 in this bank, and I was misled by this bank," said Robert Clark, a Glendale resident.
"I gave the names of my mother, my sister and my brother on the account so I thought I would be insured I don't know what to do I really don't know what to do"

John Bovenzi, an FDIC official working as IndyMac Federal's chief executive, talked with customers as they waited for the doors to open, assuring one that "this bank is as safe and as sound as any bank in the country right now"

The FDIC is hoping to sell IndyMac within 90 days Among IndyMac's assets are a rapidly deteriorating mortgage loan book, the 33 branches, and the Financial Freedom unit that makes "reverse" mortgages for older Americans

SALE PROSPECTS

"I'd like to see if we can sell the institution as a whole to one healthy bank," Bovenzi said in an interview "Companies like Financial Freedom have a great deal of value, so there will be a market for those assets"

The FDIC did not ask Michael Perry, who had been IndyMac's chief executive, to have a role in operations following the takeover, Bovenzi added

IndyMac is the fifth US banking company to fail this year, and the largest since the 1980s savings-and-loan crisis

It ended March with about $19 billion of deposits, of which roughly $18 billion were insured, and $32 billion of assets, regulators said

Jitesh Patel, a doctor from Burbank, said he took a day off from work to withdraw his money from IndyMac

"We have money we are afraid we are going to lose," he said "I wish we were a little more savvy"

Bovenzi said he expects more banks to fail in the current credit downturn "I don't expect there will be large bank failures," he said "There will be small bank failures"

Gerard Cassidy, an analyst at RBC Capital Markets, on Sunday said 300 US banks might fail over the next three years because of credit losses and tight capital markets

Regulators expect the IndyMac takeover to cost the FDIC $4 billion to $8 billion The agency's insurance fund has about $528 billion

Tengeri, the retired teacher, said he was originally attracted to IndyMac because of the high interest rates it offered on deposits

Asked if the thrift's collapse would disturb his retirement, the 70-year-old said: "Very much"

(Writing by Jonathan Stempel; Editing by Maureen Bavdek)


IndyMac Bank customers in Pasadena encounter notices that the FDIC has closed the bank

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Customers swamp IndyMac to withdraw money
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Associated Press
By CHRISTINA HOAG
07/14/2008

http://www. mercurynews. com/breakingnews/ci_9879616

PASADENA, Calif—Worried customers with deposits in excess of insured limits flooded IndyMac Bank branches on Monday, demanding to withdraw as much money as they could or get answers about the fate of their funds
With the failed bank now under federal control, hundreds of people lined up before dawn outside its headquarters branch in Pasadena

The crowd swelled throughout the day, with customers seeking shelter from the hot sun under makeshift tents Many waited for hours to get inside what became IndyMac Federal Bank after its takeover Friday by the Federal Deposit Insurance Corp

"I didn't think this could happen," said Charles Tengeri, a retired school teacher who emerged from the bank with a check for $171,000—an amount he said represented most of his savings

"I'm glad to get anything out," he said

Customers had been limited over the weekend to taking out funds through automated teller machines, debit card transactions and checks

Customer Harvey Soldan spent Sunday night at a hotel near the bank so he could be among the first in line With more than $100,000 in deposits, he anxiously waited to speak with bank officials

"It's a question of how much we can get and how soon," Soldan said while waiting in line

FDIC spokesman David Barr, who was stationed outside IndyMac headquarters, said it could take several years before the agency fully addresses customer claims

"We have to completely

unwind the affairs" of the bank, Barr said. "We may sell a portion to another bank, sell real estate.
There may be lawsuits There are a lot of different aspects to this"
IndyMac is the largest regulated thrift to fail and the second-largest financial institution to close in US history, according to its regulator, the Office of Thrift Supervision

IndyMac Bancorp Inc, the holding company for IndyMac Bank, had been struggling to raise capital and manage losses from bad mortgage loans

The banking regulator transferred control of IndyMac to the FDIC because it did not think the lender could meet its depositors' demands amid a run on bank deposits by customers in recent weeks

The FDIC insures bank deposits of up to $100,000 per depositor and up to $250,000 for funds in retirement accounts such as an IRA

As of March 31, IndyMac had total deposits of $19.
06 billion from some 275,000 deposit accounts Of those, some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC has said

The FDIC was telling customers with unsecured deposits that they would receive an advance dividend equal to half of the uninsured amount

The agency plans to cover all insured deposits and then sell IndyMac assets Customers with deposits that aren't fully insured were told to file a claim with the FDIC so they can try to recover a share of any funds left over from the sale of those assets

Some customers might also be eligible to recoup dollar-for-dollar beyond the 100,000 limit depending on how their accounts are structured, Barr said

On Sunday, FDIC Chairman Sheila Bair sought to reassure IndyMac customers, saying customers with uninsured funds could still receive more money after the agency sells IndyMac's assets

Still, many IndyMac customers who rushed to the bank's offices Monday were nervous about the prospect of losing a large portion of their savings

"This is my life savings here I feel really horrible," said James Sherman, an IndyMac customer with more than $100,000 in the bank

Sherman was hoping to get 50 cents on the dollar above the federally insured limit, with the remainder of his money possibly being applied to his mortgage with IndyMac

"What do you resort to now, putting money back in the mattress?" he asked

FDIC officials could not immediately say how many customers had shown up to the bank's 33 branches to withdraw funds All those offices are located in Southern California

Tengeri said he was hopeful about getting the remainder of his life savings from the bank

"I'm keeping my fingers crossed," he said.
"I have full trust in the US government It may take a little time but I'm not worried"