What an amazing and totally unsurprising story. Apparently, “IndyMac’s seizure marks the fifth FDIC-insured failure of the year,” as reported on KNBC. It’s yet another case of the US government trying to bail out a financial institution. I can see Jim Rogers seething in a mixture of disbelief and “I-told-you-so” right now.
IndyMac is a California-based bank (which might explain why I’ve never heard of them, living up here in Eastern Canada) that has 33 branches. It’s amazing that it held as much as it did given this relatively small number of branches.
But there was a run on the bank. Total withdrawals of about $100 million/day this past week. Who knows why? Apparently they’d been in trouble (privately) since January, but how many people would have been clued in to that? Like most banks, IndyMac didn’t keep enough actual cash anywhere on hand. So the government shut them down for this weekend. They’ll be open again on Monday. But do you really still want to do your banking there? The problem is, I think most banks are in this situation in the US.
I can hear Jim Rogers say that Fannie and Freddie are next up. We know Rogers is shorting them, anyway. Seems to me that anyone who thinks the American economy is heading back up is still way off the mark. If anything happens to Fannie and Freddie, and they are really half the US mortgage market…. whoaaaa, Nelly. I bet gold orders everywhere are severely backed up right now. Kitco’s had a delay for some time now, at least six months.
But this is a riveting story – far more interesting and important than junk television. You can read the FAQ here on the FDIC’s site; it’s all about the failed bank (which is going to open again on Monday).
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