Government shuts down mortgage lender IndyMac
LOS ANGELES (AP) -- IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.
The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.
The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands.
IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.
IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.
Other bank services, such as online banking and phone banking were scheduled to be made available on Monday.
"This institution failed today due to a liquidity crisis," OTS Director John Reich said.
The lender's failure came the same day that financial markets plunged when investors tried to gauge whether the government would have to save mortgage giants Fannie Mae and Freddie Mac.
This "news" should come as a surprise to no one. Wednesday we brought this imminent bank collapse to your attention, and asked if you bought more Gold and Silver. Did you? Do average Americans even realize what has just occurred? "The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history." This news should be met with shock and outrage, not to mention FEAR. Yet nobody seems to notice or care.
We are DOOMED.
U.S. takes bold steps to shore up Fannie, Freddie
WASHINGTON (Reuters) - The United States on Sunday offered massive aid to Fannie Mae and Freddie Mac to bolster confidence in the mortgage finance giants and head off a potential meltdown in financial markets.
The dollar jumped and stock futures rallied on the powerful message of support from the U.S. Treasury and the Federal Reserve, which also drew criticism for being a potential bailout that could cost U.S. taxpayers dearly.
Unveiling the latest emergency measures to calm markets roiled by the country's prolonged housing crisis, the Fed said Fannie and Freddie could have access to its emergency cash if necessary, effectively opening its discount window in a move echoing recent action to save investment bank Bear Stearns.
The Treasury separately said it would temporarily boost its line of credit to the two mortgage financiers, as well as purchase equity in them, a step never taken before, if needed.
Both companies, which are shareholder-owned but also government-sponsored, said they are adequately capitalized, but welcomed the measures and said they would help confidence.
Both companies, which are shareholder-owned but also government-sponsored, said they are adequately capitalized, but welcomed the measures and said they would help confidence.
The Dollar jumped? Off a cliff a cliff maybe... It certainly hasn't jumped higher. As of 10PM est. the Dollar is up a colossal 0.04. Weeeeeeeeeeeeeeeeeeeeeeee! This news hardly strikes me as being supportive of a "strong Dollar policy" Mr. Paulson. As a matter of fact it strikes me as hugely inflationary, not to mention a burden that is way too big for the taxpayers of this crumbling nation to sustain. The Fed and Treasury's response to the impending failure of these two "government sponsored entities" is akin to giving a drowning man a drink of water.
Yes, it would be a catastrophe if Fannie and Freddie fail. But the catastrophe lies at the feet of the Fed and the Treasury. Printing more money to prop up these government sponsored failure will solve nothing. Perhaps global Forex traders have finally come to the realization that the Fed and Treasury are unable to fix what ails this country's financial system, and are soon to vote "no" when it comes to the US Dollar. Perhaps Americans will soon wake up to the fact that the Fed is at the root of all that ails this country today, and they will demand that the Fed be extinguished in much the same fashion they demanded they be created following the credit crisis of 1907, 100 years ago.
Obviously, throwing money at these perpetual financial crisis isn't working. The banking industry is worse off now, today, than it was in march when the fed bailed out Bear Stearns. How can anybody believe a Fed bailout of Fannie and Freddie will be successful? For that matter, is it even LEGAL for the Fed to bailing out Fannie and Freddie? They are not banks. They are government sponsored money laundering outfits. This country is being robbed blind with its eyes wide open, yet to ignorant to see the crime.
We are DOOMED.
Government not expected to help more companies
NEW YORK (AP) -- The U.S. government is signaling it won't throw a lifeline to struggling financial companies -- except for mortgage linchpins Fannie Mae and Freddie Mac -- marking a shift to a new and potentially more volatile phase of the credit crisis.
Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses -- unlike Bear Stearns Cos., whose buyout the government helped orchestrate in March. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies' earnings expected to be down a stunning 69 percent from a year ago when all the numbers are in.
And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.
The short-term uncertainty about Freddie Mac and Fannie Mae -- which together hold or guarantee half the nation's mortgage debt -- was to an extent relieved on Sunday. Federal officials again threw their support behind the government-sponsored enterprises; the Treasury pledged to expand its current line of credit to the two companies and Treasury Secretary Henry Paulson also said the government could, if needed, buy equity capital in the companies, whose stocks lost half their value last week. The Treasury's moves would require congressional approval.
Meanwhile, the Federal Reserve said it will provide additional loans if needed.
But some of Wall Street's biggest investors believe there was another message in the government's announcement -- the rest of the financial sector seems unlikely to get a helping hand. Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments -- a number projected to ultimately reach $1 trillion.
But some of Wall Street's biggest investors believe there was another message in the government's announcement -- the rest of the financial sector seems unlikely to get a helping hand. Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments -- a number projected to ultimately reach $1 trillion.
"The credit crisis has obviously entered into a new phase -- the government has one bailout left in them, and this is it," said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.
"One consequence of Freddie and Fannie is that other firms are allowed to go under," he said. "If you couldn't get your act together after four months of unprecedented financing terms, maybe you don't deserve to be thrown yet another lifeline."
It's official. We are DOOMED.
Gold and Silver made significant and powerful breakouts from their four month long consolidation on Thursday and Friday. It is a bit ironic that the recent highs in Gold coincided with the Bear Stearns bail out in mid-March, and Gold breaks out from the consolidation that followed that bailout as the Fed steps to the plate with a new bailout that makes the Bear Stearns bailout look like a handout to "that guy" with the cardboard sing at the intersection. Bernanke and Paulson, the the two biggest flim-flam men to ever walk the streets of Washington have just sealed the US Dollar's fate. The only thing left in this meltdown of the US Financial System is the realization that it has been destroyed, the bitching that will be sure to follow, and the riots in the streets as the Haves realize they are now Have-Nots.
It's no longer a secret. We are DOOMED.
Gold and Silver will now become the investors choice not only as a flight to safety, but as a hedge against the hyperinflation that is sure to result from no certain crash of the Fed and Treasury's Ponzi Scheme that has been disguised as a "financial system" for the past 100 years.
We maintain our view that Gold will soon test the $1000 barrier again, pause to refresh in August, and then soar to new highs after Labor Day. Silver will be along for the ride, and we would not be surprised to see the gains in Silver double those in Gold over the next 4-6 months. A very key number to focus on now for Silver Investors is the Gold to Silver ratio [Gold / Silver]. A mover below 50.50 in this ratio should signal the beginning of an explosive move higher in Silver. Be prepared to double down and load the boat. All dips in the Precious Metals should be bought. Shorting these metals markets now would be most unwise. If you need to short something, short ANY rallies in the US Dollar or bank stocks. Do not fall for the headlines touting "sell-offs" in Oil. Obviously, once again, "falling Oil prices" only represented another buying opportunity. Gold and Silver are now the "investment of choice" for savvy investors. DON'T get caught "out of you position" attempting to trade this market now. Look back at Gold and Silver's run following their consolidation breaks after Christmas last year to recognize the benefit of "adding" to your positions on dips. Always "be in the market" and you should profit handsomely in the second half of 2008 while those that sit glued to CNBC perish.
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