IndyMac and the Financial Meltdown

by James & Miel on July 15, 2008 · 0 comments

Hi All,

Things in the financial sector are melting down. Fed Chairman Ben Bernake has abandoned his June assessment that the economy will grow by 1% this year and treasury secretary Paulson is currently in the processes of organizing a bailout of Fannie Mae and Freddie Mac – the nations quasi-public mortgage agencies in charge of secondary markets. Two huge behemoths with trillions in mortgage debt.

Now, the latest news is that one of the bigger regional banks, IndyMac has failed. What happened was there was a big run on the Bank – investors withdrew 1.1 billion. This depleted the banks reserves and federal regulators had to take over. Well, it turns out that people who got their money out before the bank went under were the lucky ones.

The LA times is reporting that there are long lines at IndyMac branch locations where people are waiting to withdraw their funds. The unfortunate part of this is that for those who had more than the FDIC guaranteed amount of deposits, their savings and investments may be gone forever. Customers in California are starting to get testy. Check out the LA Times Story and don’t forget to watch out the video, its indicative of the problems the bank failure is causing.

Best,

James

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