Jul 12 2008
Fed Seizes IndyMac: 2nd Largest Bank Failure in U.S. History
Well, hello another shoe dropping:
“The federal government took control of Pasadena-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history.
Citing a massive run on deposits, regulators shut its main branch three hours early, leaving customers stunned and upset. One woman leaned on the locked doors, pleading with an employee inside: “Please, please, I want to take out a portion.” All she could do was read a two-page notice taped to the door.“
- IndyMac Bank seized by federal regulators
- IndyMac Seized by U.S. Regulators Amid Cash Crunch
- Regulator to run IndyMac while buyer sought
“Depositors have been withdrawing cash at an elevated pace since late June, when Schumer questioned IndyMac’s ability to survive the housing crisis.
In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts, the OTS said.
“This institution failed today due to a liquidity crisis,” OTS Director John Reich said. “Although this institution was already in distress, I am troubled by any interference in the regulatory process,” he said.”
Yep! Another bank is exposed for simply not having close to enough to back up its obligations. Really, this is a problem shared by any and all banks in the global charade that is fiat banking. Fiat banking is really just one gargantuan confidence game hoping that only a small fraction of people who have been lured to deposit assets on a “demand” basis (meaning, they can walk on in at any time and expect their assets to be ready for withdrawal, like your checking / ATM account) will actually exercise this right. The truth is that the bankers have those assets tied up in other money making opportunities that may or may not be liquid — so they can earn extra profits!
At the moment, what??, having pledged much of those demand deposit assets on all sorts of asset backed securities, like subprime Mortgage pools backed by collapsing home and real estate values,… well, let it suffice to say IndyMac will, in our estimation, not be the last to drop.
And how will the Feds make them solvent? Helicopters? C-130s as was just suggested by a reader? Whatever the case, expect lots of printing to cover the shortfalls.
Serious problems, dear readers. Very serious.
