IndyMac was taken over this weekend by the FDIC. Here are some stunning facts:
Assets: $32 billion
Deposits: $19 billion
Peak market cap: $5 billion
Current market cap: $10 million
For those of you who don't know, Countrywide Financial produced this spawn in the 1980s to off load get this, loans too large for Fannie Mae and Freddie Mac. As the market boomed, they eventually spun off this unit into IndyMac in 1997 right in time for the epic housing boom. They felt they were okay with Alt-A and Pay Option ARM loans and I dug up a video of CEO Michael Perry talking on CNBC in September of 2006 of how great things were. It is a must watch.
Either way, the doors open and the war chest of the FDIC just shrank big time. We'll be having more failures like this throughout the year. And then we have some of Kudlow's minions trying to blame this on a letter dished out by Senator Charles Schumer on June 26, 2008 urging oversight on IndyMac. At the time IndyMac was trading at .80 cents a share. Now, they are trading at .10 cents off from their $50 peak price.
Maybe the letter was part of the mental recession eh?
http://www.doctorhousingbubble.com/indymac-indymac-history-and-collapse-the-saga-of-the-second-largest-bank-failure-in-history-here-in-sunny-southern-california/"> IndyMac history from Countrywide spawn to uber toxic mortgage provider and collapse