"A government big enough to give you everything you want, is big enough to take away everything you have"
Thomas Jefferson

Friday, July 11, 2008

Schumer Comments Fails Bank

IndyMac Bank assets were seized by federal regulators today

And blame for the failure lands to none other than our infamous camera friendly Senator Charles Schumer!

The director of the Office of Thrift Supervision, John Reich, blamed IndyMac's failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank's solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a "heart attack."
"Would the institution have failed without the deposit run?" Mr. Reich asked reporters. "We'll never know the answer to that question."
And who will pay for Schumer's flippant remarks and his love and quest for face time in front of a camera, the public, the average borrower. The banks will experience increased FDIC insurance rates that will ultimately be passed onto the consumer.
 The failure could be felt across the entire banking industry, as the FDIC will likely have to raise insurance assessments for all banks to build up government reserves. "It takes a big chunk out of the FDIC insurance fund," said Chip MacDonald, a banking lawyer at law firm Jones Day. He said that if the FDIC hikes insurance fees, that will add to already-intense pressure on bank profits.

9 comments:

Anonymous said...

WOW, SCOTT. AS SOMEONE WHO DOES NOT LIKE SCHUMER ONE BIT...I BELIEVE THAT YOU ARE THE MOST INTELLECTUALLY DISHONEST PERSON IN NORTHERN NEW YORK.

"IndyMac specialized in loans it had long argued were of minimal risk: low documentation loans to residential mortgage borrowers." -- STRAIGHT FROM CNN TONIGHT.

I.E....THEY SPECIALIZED IN SUBPRIME MORTGAGE.

YOU ARE EITHER 100% DISHONEST, OR YOU HONESTLY HAVE NO IDEA WHAT YOU ARE TALKING ABOUT ON ANY TOPIC YOU TYPE ABOUT...IT COULD EASILY GO EITHER WAY, SCOTT GRAY. SHAME ON YOU FOR TRYING TO DUMB DOWN OUR NEIGHBORS!!!

RWiley said...

If PVI had spent his time reading and viewing more than one news source he would have been able to put the Wall Street story in perspective. For months, there have been numerous signs of doom for IndyMac and no one is to blame except their officers and their lending practices. Unfortunately, people have a tendency to trust banks. Remember what happened right here in Watertown?

Political IV said...

Anon #1

You obviously have no idea about banking do you?

Subprime mortgages while not a great way to do business, will not necessarily put a bank out of business. Subprime mortgages do more damage to the borrower and if the bank has enough deposits they can survive some mortgages going bad.

Read closely this bank had a run a deposits, attributed to Schumer's remarks. A large run on deposits like they experienced will put a bank out of business quickly.

Anonymous said...

Are you saying the Wall Street Journal is dishonest?

Anonymous said...

Political IV, are you a banker? You question other's knowledge of the banking industry. Does that mean that you, yourself, make a living in the banking industry? I suspect not.

Political IV said...

It would be a fair statement to say I have banking experience.

Anonymous said...

I wonder if Republicans are responsible for ANYTHING? For the party of personal responsibility, they sure love to lay the blame anywhere but on themselves.

Anonymous said...

Can't lay any blame on the OTS. Where have they been during all these mortgage/banking problems?

Anonymous said...

In response to Political IV's post above admitting financial experience:

"Legislator Gray is in his fourth term of office. He is serving in his second consecutive term as Chairman of the Finance & Rules Committee (2006-2008).."

Taken from the County Legislature's website.

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