Which financial company will go bankrupt next?
- Thread starter The Kin
- Start date
AP
Schumer: concerned over IndyMac stability
Thursday June 26, 7:48 pm ET
By Marcy Gordon, AP Business Writer
Schumer presses regulators for action to avoid disaster from IndyMac; stock plunges
WASHINGTON (AP) -- The possible collapse of big mortgage lender IndyMac Bancorp Inc. poses significant financial risks to its borrowers and depositors, and regulators may not be ready to intervene to protect them, Sen. Charles Schumer, D-N.Y., said Thursday.
A wave of IndyMac depositors withdrawing their funds could leave IndyMac "in a disastrous financial situation," Schumer said.
Schumer, who sits on the Senate Banking Committee, voiced concern in letters to the heads of the Federal Deposit Insurance Corp.; the Office of Thrift Supervision, an agency of the Treasury Department; the Federal Home Loan Bank of San Francisco; and the Federal Housing Finance Board, which regulates the system of regional home-loan banks.
Shares of Pasadena, Calif.-based IndyMac, which already have tumbled nearly 95 percent over the past year, dropped 28 cents, or 26 percent, to 79 cents in trading Thursday. They lost another cent in after-hours trading.
Gutted by losses from write-downs on mortgage-backed securities, the company warned last month that it wouldn't return to profitability this year unless the slide in U.S. housing prices slowed. IndyMac posted a loss of $184.2 million, or $2.27 a share, for the first quarter, compared with a profit of $52.4 million, or 70 cents a share, a year earlier.
"I am writing to you out of concern for the safety-and-soundness risks posed by IndyMac," Schumer told FDIC Chairman Sheila Bair; John Reich, director of the thrift agency; Richard Rosenfeld, chairman of the Federal Housing Finance Board; and Dean Schultz, president of the San Francisco FHLB. "The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."
He asked what steps the agencies are taking.
Schumer asked, for example, whether the FDIC has considered ordering IndyMac to reduce its reliance on brokered deposits, sold by securities firms to customers outside of a bank's local area, which can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit. Brokered deposits make up more than 37 percent of IndyMac's total deposits, according to Schumer's letter.
OTS spokesman William Ruberry declined to comment, other than to say that the agency is reviewing Schumer's concerns. FDIC spokesman Andrew Gray said the agency "does not comment on open and operating institutions."
Michael DiVirgilio, a spokesman for IndyMac, said the company was reviewing Schumer's letters and had no immediate comment.
Schumer: concerned over IndyMac stability
Thursday June 26, 7:48 pm ET
By Marcy Gordon, AP Business Writer
Schumer presses regulators for action to avoid disaster from IndyMac; stock plunges
WASHINGTON (AP) -- The possible collapse of big mortgage lender IndyMac Bancorp Inc. poses significant financial risks to its borrowers and depositors, and regulators may not be ready to intervene to protect them, Sen. Charles Schumer, D-N.Y., said Thursday.
A wave of IndyMac depositors withdrawing their funds could leave IndyMac "in a disastrous financial situation," Schumer said.
Schumer, who sits on the Senate Banking Committee, voiced concern in letters to the heads of the Federal Deposit Insurance Corp.; the Office of Thrift Supervision, an agency of the Treasury Department; the Federal Home Loan Bank of San Francisco; and the Federal Housing Finance Board, which regulates the system of regional home-loan banks.
Shares of Pasadena, Calif.-based IndyMac, which already have tumbled nearly 95 percent over the past year, dropped 28 cents, or 26 percent, to 79 cents in trading Thursday. They lost another cent in after-hours trading.
Gutted by losses from write-downs on mortgage-backed securities, the company warned last month that it wouldn't return to profitability this year unless the slide in U.S. housing prices slowed. IndyMac posted a loss of $184.2 million, or $2.27 a share, for the first quarter, compared with a profit of $52.4 million, or 70 cents a share, a year earlier.
"I am writing to you out of concern for the safety-and-soundness risks posed by IndyMac," Schumer told FDIC Chairman Sheila Bair; John Reich, director of the thrift agency; Richard Rosenfeld, chairman of the Federal Housing Finance Board; and Dean Schultz, president of the San Francisco FHLB. "The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."
He asked what steps the agencies are taking.
Schumer asked, for example, whether the FDIC has considered ordering IndyMac to reduce its reliance on brokered deposits, sold by securities firms to customers outside of a bank's local area, which can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit. Brokered deposits make up more than 37 percent of IndyMac's total deposits, according to Schumer's letter.
OTS spokesman William Ruberry declined to comment, other than to say that the agency is reviewing Schumer's concerns. FDIC spokesman Andrew Gray said the agency "does not comment on open and operating institutions."
Michael DiVirgilio, a spokesman for IndyMac, said the company was reviewing Schumer's letters and had no immediate comment.
Quote from Thermactor:
Bank of America......Soon to be just called BAC aka Bank of China....
Here's one that's not on the list SOV
http://whatstrading.com/2008/06/27/sovereign-bancorp-inc-sov-755-502/
http://whatstrading.com/2008/06/27/sovereign-bancorp-inc-sov-755-502/
Except that Goldman get the cream of the crop. They offer better compensation, and hire much smarter people. I have the edge of currently having friends at pretty much all of the Ivies + Standford. The super smart physics and math majors always get scooped up by Goldman or BX if they don't get directly into hedge funds or PE.
The other BB's hire a good number of plain vanilla "finance" majors. Your populist B.S. about Paulson is crap. That doesn't explain why Goldman's prop trading division does so incredibly well/it's clearly a result of superior quant models.
07-Jul-08 11:16 ET In Play
Lehman Brothers: Platts review bars Lehman from key oil trade window - Reuters (22.41 -0.44) : Reuters reports that the energy pricing agency Platts has put LEH under a temporary review that effectively excludes it under a temporary review from trading benchmark-setting oil contracts, four sources close to the matter said on Monday. The exact cause of the move was not immediately clear, although the practice of disallowing a market player from trading during Platts' price-setting window is relatively common and can be imposed for a variety of reasons, from credit issues to trade disputes to shipment technicalities. But it will be a setback for the No. 4 Wall Street bank, which has strived in recent years to build up a commodity and energy trading division to rival that of the long-standing giants GS and MS, and has seen its shares slump by nearly two-thirds on write-downs. A Lehman spokeswoman was not immediately able to comment, while Platts declined to confirm or deny the review on Lehman.
Lehman Brothers: Platts review bars Lehman from key oil trade window - Reuters (22.41 -0.44) : Reuters reports that the energy pricing agency Platts has put LEH under a temporary review that effectively excludes it under a temporary review from trading benchmark-setting oil contracts, four sources close to the matter said on Monday. The exact cause of the move was not immediately clear, although the practice of disallowing a market player from trading during Platts' price-setting window is relatively common and can be imposed for a variety of reasons, from credit issues to trade disputes to shipment technicalities. But it will be a setback for the No. 4 Wall Street bank, which has strived in recent years to build up a commodity and energy trading division to rival that of the long-standing giants GS and MS, and has seen its shares slump by nearly two-thirds on write-downs. A Lehman spokeswoman was not immediately able to comment, while Platts declined to confirm or deny the review on Lehman.