Indymac failure, Freddie and Fannie on the ropes

[rufus dog]

When is the public going to get the connection that Republican rule creates havoc on the economy? S&L under Reagan/Bush, and W is on pace to under perform his dad.

[smalll]

1. I'm worried about Fannie Mae and Freddie Mac. Never heard of "Indymac" --

hoping (for the economy's sake) that Indymac is some kind of obscure boutique firm that provides capital to arugula farmers, skateboard manufacturers and mumblecore movie producers.

:shrug:

[JI7]

2. nope, you might have heard of some of their subsidiaries

Indymac Bank
Financial Freedom
New York Mortgage Company
Barrington Capital Corporation

from wiki

[rufus dog]

3. Mortgage bank

The fed took control today, concerned that Indy could not meet thier obligations under the FDIC. Largest thrift failure, second largest financial institution failure in US history. So everyone will be taking out their money on Monday! Their deposits are 19 billion, of which 1 billion would not be covered under FDIC.

[high density]

11. FDIC has already pledged to pay 50% of that 1 billion that was not insured

Some of the rest may be recovered later on when the bank's assets (loans) are sold to a different institution.

[vaberella]

6. As far as worrying Indymac is a threat to all banks. However, Indymac is not over just downsized.

If you go to bloomberg.com the article is there stating it's been completely downsized.

[rufus dog]

8. you are correct

The assets currently are greater than the liabilities. Hopefully it is a "cash flow issue," in meeting short term debt.

[IamyourTVandIownyou]

4. Repubs and Corps like recessions.

It forces some of the better minds back into the cubicle job pool because their new startup businesses couldn't weather it.

[vaberella]

5. This crap is the reason by the end of the week my money is out of Chase.

I'm done with most of these banks. I'm keeping HSBC around because they're a british bank.

[rucky]

14. Chase may be the one of the last standing.

It's heavily invested in by foreign entities. Just something to look into before you pull out.

[WinkyDink]

7. I'm waiting for the connection specifically to GWB to kick in.

[soothsayer]

9. fannie and freddie are hardly on the ropes. I think this is mkt manipulation,

plain and simple. Stories being told to create panic so the story tellers can short the stocks, then buy them cheap and make money on the way back up again. Fannie is adequately capitalized, having raised $11B earlier this year, bringing their reserves to $46B or so. Freddie can use some more cash on hand, and will raise it later this year prolly, but both have wayyyyy more than they are required to have. Way more.

[RUMMYisFROSTED]

10. $46B vs. $2.5T of guarantees?

[high density]

12. $2.5 trillion of guarantees, and most of those are performing loans

Or do you assume that everybody is going to stop paying their mortgages?

[RUMMYisFROSTED]

13. 2%= $50B, no?

[SOS]

15. Indymac CEO Michael Perry gets $15,920,000 a year.

Great job!

http://www.forbes.com/lists/2006/12/794L.html