You get this quote from IndyMac's CEO (note I'm short IMB):
IndyMac chief calls mortgage market "panicked"
IndyMac Chief Executive Mike Perry told employees in an e-mail on Wednesday that the current turmoil in the mortgage market appears to be broader and more serious than previous disruptions.
"Unfortunately, the private secondary markets ... continue to remain very panicked and illiquid," Perry said.
August 05, 2007
Take one part IndyMac the Liar's Loan King, one part mortgage meltdown and one part HousingPANIC, what do you get?
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14 comments:
The situation must be really bad when these former cheerleaders are saying things like that.
Get your money out of American banks and invest into other currencies. I would not trust even Citibank. Who knows what kind leveraged CDO time bombs those banks still have.
He's just gettin them ready for the mass layoff announcement this week
This worries me: "He said changes are being made to pricing and underwriting to ensure more of the company's mortgage production qualifies for sale to government affiliated buyers."
By 'government affiliated buyers' he means Fannie Mae and Freddie Mac, doesn't he?
The reason this worries me is that I do NOT want my tax dollars spent bailing out any of this irresponsible behaviour. The unwinding of this asset bubble is going to affect these institutions as well. While Fannie Mae and Freddie Mac are supposed to be independent from the government, the market acts like they have a government guarantee backing them.
I worry that when things really go wrong there will be the temptation to spend my tax dollars to support these untenable government-created institutions.
Paul e. Math: FYI, that is exactly why everybody is now focusing on loans that conform (at least in sufficient appearance for Freddie & Fannie) to their standards, i.e. "conforming" loan products, but nothing guarantees that these GSEs will purchase loans even if conforming, just that they will not purchase if they do not conform.
I fully expect an RTC type mechanism to be set up using our tax dollars to buy up all the toxic waste CDOs & MBSs that have gone under and settle out the assets that back them for pennies on the dollar, regardless of Freddie & Fannie. It will likely be a joint task force under Treasury that will include the FDIC, the Pension gurantee version of FDIC, Freddie & Fannie etc.
So even if you rent or did not get involved in this toxicity and have 30 year fixed or paid off you are going to bail out wall street, its a given in order to prevent the greater economy from tanking. That the reinforcing wonder of being highly leveraged when your in a downward death spiral which the credit markets are currently teetering towards!!
Anonymous said...
He's just gettin them ready for the mass layoff announcement this week
August 05, 2007 4:00 PM
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Yep!!!
If Citi, BofA, JPM fail, you don't have to worry about money. You should be more worried about guns and ammo.
I gotta second anons perspective.
He's sending out a warning.
It is because they know they are not getting their money back.
Guys..CitiBank and BofA are not going to fail on anything short of a nuclear war. These are large central banks which the fed will protect at all costs. They have tons of forign assets, gold, silver, and global currencies to draw against to cover mortgage losses. They make money from many different services besides home mortgage lending.
You can't compare these kind of banks to smaller thrifts like IndyMac. IndyMac has bet the farm pushing home mortgages, especially Alt-A. If they have violated banking regulations (I'm guessing they have) and over-leveraged themselves to the point where they don't have enough cash for daily bank operations then we'll see a repeat of 1989 all over again.
A bail-out through taxation could possibly be the Fed's solution to this growing crisis.
However, if people keep loosing heir jobs, houses, marrages, pensions, 401K's, health-care, etc..., will the country really be in a position for a massive bail-out?
The only way BofA and Citi would fail is if the government ceased to function. If the government ceases to function, you don't need banks, you need food, water, and ammo; just as anon 4:52 said.
They won't make it through the week
banks failing: new the black helicopter for the tinfoil hat gangs
31 billion in assets and an FDIC insured FSB. They aren't going anywhere
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