The Schumer-making-crashy-bank thing made me think...

[Manedwolf]

As one analyst says:

The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senators comments has not a coincidence. Director Reich concluded that Senator Schumer had given the bank a heart attack.

Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?

http://www.cnbc.com/id/25654303

Just stop and realize for a moment. Unless McCain gets on his game, by this time next year, the world's most complex and powerful economy will have Obama, Nancy Pelosi, Harry Reid, and Chuck Schumer sitting at the controls, pushing the buttons.

 

[Regolith]

Don't remind me.

[Dannyboy]

The Dems will probably have a veto-proof majority in the Senate, so it's a moot point.

[Bigjake]

The Dems will probably have a veto-proof majority in the Senate, so it's a moot point.

That is one of the few sticking points keeping me from just holding my nose and voting for that turd.

I'd love to see that "Maverick" eat a humiliating defeat, He'd be no better than Obama with a stacked senate, and would more than likely go along with the socialists willingly on some of the worst of their nonsense.

This just sucks either way..

[roo_ster]

Maybe hte ideal is a McCain as POTUS with a non-veto-proof Dem majority.

[Ben]

Obama, Nancy Pelosi, Harry Reid, and Chuck Schumer sitting at the controls, pushing the buttons.

Unless the Greens win the election. They just nominated Cynthia McKinney, and her VP running mate is some hip-hop artist. 

[longeyes]

Let the children play.

The Time-Out is coming.

[RocketMan]

Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?

I doubt there is any kind of conspiracy or overarching master plan involved.  Schumer did it for the most basic of reasons:  He is stupid.

[El Tejon]

You mean he did it "because he could."

[Azrael256]

I doubt there is any kind of conspiracy or overarching master plan involved.

I had a prof who's favorite saying was "Never attribute to malice what can easily be explained by stupidity."

[RocketMan]

You mean he did it "because he could."

Yup, pretty much the same thing.

[The Annoyed Man]

[. . .] by this time next year, the world's most complex and powerful economy will have Obama, Nancy Pelosi, Harry Reid, and Chuck Schumer sitting at the controls, pushing the buttons.

I doubt the Chinese are going to let these goons run their economy. 

[De Selby]

Of course this article is totally unbiased, and has no interest in portraying Schumer as the cause of the bank's failure (rather than the obvious-bad loans) for partisan political reasons...

Or not.  I'm certain that there is professional work out there on this matter, or at least will be shortly.

In my mind, relying on obviously partisan hack pieces only discredits one's own political agenda. 

The mental gymnastics one needs to go through in order to conclude that these banks are failing because of the democratic campaign, and not because of their ridiculous lending policies during the past 8 years, is beyond me.  It seems like this guy is desperately reaching for a partisan explanation for what can easily be explained by....bad business decisions, the most natural cause of bad business results.

[MechAg94]

Certainly that bank put itself in a bad situation.  However, what I heard was that there was a run on the bank soon after that politician's comments were made public.  Was there any other news coming out at the same time to trigger that run?  That would be the question IMO. 

[De Selby]

Certainly that bank put itself in a bad situation.  However, what I heard was that there was a run on the bank soon after that politician's comments were made public.  Was there any other news coming out at the same time to trigger that run?  That would be the question IMO. 

The point is that the bank was going to fail-the run was customers trying to get their money out.  They were going to show up to a closed bank no matter what...the run just meant that more of them had some chance to scoot with their money before becoming mired down in the aftermath.

It looks to me like people are, in effect, bashing Schumer because he let people know they were about to lose their money.  I don't think there's any realistic debate that IndyMac would have soldiered on if only Schumer had been silent.

[Headless Thompson Gunner]

There is no way to know that IndyMac would have failed without Schumer helping.  All we know for certain is that IndyMac was in a tough spot, and that Schumer pushed 'em over the edge.

IndyMac could have raised some capital and remained open.  Or they could have found a larger, more solvent bank to merge with.  Or IndyMac could have closed themselves down in an orderly fashion.

It was Chucky Schumer who made sure none of the better alternatives would happen.

[De Selby]

Yep-he did that by letting the customers know what was going on.

Sorry, I can't have much sympathy for a company that is only in business today because its customers aren't really aware of how imperiled their investments and deposits are.

It would be one thing if the statements were only rumor, but when there is in fact a likelihood that the bank will fail, I have a hard time blaming someone who lets the customers know.

[Headless Thompson Gunner]

Yep-he did that by letting the customers know what was going on.

Sorry, I can't have much sympathy for a company that is only in business today because its customers aren't really aware of how imperiled their investments and deposits are.

It would be one thing if the statements were only rumor, but when there is in fact a likelihood that the bank will fail, I have a hard time blaming someone who lets the customers know.

Schumer didn't merely let the customers know what was happening, he caused what happened.  It was the run on the bank that caused its insolvency, and it was Schumer who caused the run on the bank. 

The bank was able to operate in its present condition.  It had been doing so for months.  It could have continued for months still, certainly long enough to allow for a more orderly dissolution.  But thanks to Chucky, that won't be possible.

[De Selby]

How long the bank "could have" gone on we don't know-but we do know it was highly likely to fail at some point. 

Like I said, you're basically bashing the guy for letting customers know factual information about the bank's condition. 

What kind of business is it where only the customer's complete ignorance as to your financial condition allows you to keep on going? And how is it fair to keep their money in a situation where you know that if they were aware of how bad your management had been, they would be lining up in the streets to get their money back?

I guess I tend to support more honesty and transparency, even if it means some badly managed businesses will fail today instead of three months from now.

[Manedwolf]

How long the bank "could have" gone on we don't know-but we do know it was highly likely to fail at some point. 

Like I said, you're basically bashing the guy for letting customers know factual information about the bank's condition. 

What kind of business is it where only the customer's complete ignorance as to your financial condition allows you to keep on going? And how is it fair to keep their money in a situation where you know that if they were aware of how bad your management had been, they would be lining up in the streets to get their money back?

I guess I tend to support more honesty and transparency, even if it means some badly managed businesses will fail today instead of three months from now.

He yelled "Fire" in a crowded theater. Period.

He was on committees for BANK OVERSIGHT. So when he said that, everyone pulled their money out. At that point, they became insolvent.

[Headless Thompson Gunner]

How long the bank "could have" gone on we don't know-but we do know it was highly likely to fail at some point. 

Like I said, you're basically bashing the guy for letting customers know factual information about the bank's condition. 

What kind of business is it where only the customer's complete ignorance as to your financial condition allows you to keep on going? And how is it fair to keep their money in a situation where you know that if they were aware of how bad your management had been, they would be lining up in the streets to get their money back?

I guess I tend to support more honesty and transparency, even if it means some badly managed businesses will fail today instead of three months from now.

C'mon, shootinstudent.  You know better than that.  You know IndyMac's poor situation was already public knowledge.  Facts didn't kill IndyMac.   The run caused by Senator Schumer's attacks did that.  He didn't help the bank, its customers, or the country at large.  All he did was flex his political muscle and destroy a bank.

You cannot deny that Chucky Schumer forced the bank to close sooner than it otherwise would have.  You cannot deny Schumer eliminated any possibility for a positive resolution for this bank. 

And here's a newsflash for you:  A sufficiently large run will make any bank fail, regardless of how weak or strong it is.  Do you want Senators to try to start a run on your bank?  I don't.  I don't think it's a Senators job or proper place to destroy other peoples' businesses, savings, or investments.

[De Selby]

Headless,

The problem is that your comments presume some foreseeable way that IndyMac would not have failed.  There isn't one, hence, the actual cause of indymac's failure was...indymac's failure.  Schumer's comment just meant that people tried to jump ship today instead of losing their deposits by surprise tomorrow-the bank was already failing.  The run was a result of an obvious failure on the horizon, not the cause of failure.

Maned,

This is more like yelling fire in a theater that is...on fire. 

[Headless Thompson Gunner]

There are plenty of ways in which IndyMac wouldn't have failed.  Buyout, merger, capital infusion, central bank loan...  Right there, right off the top of my head, are 4 easy ways the bank could have avoided failing.

The fire analogy is a good one.  I'd take it a bit farther than Maned, though.  I'd say that Schumer shouted 'fire' in crowded theater while at the same time lighting the theater on fire.  Yes, in the end he proved right about the theater being on fire.  That doesn't absolve him of the guilt for being the one to light the fire in the first place.

[De Selby]

There are plenty of ways in which IndyMac wouldn't have failed.  Buyout, merger, capital infusion, central bank loan...  Right there, right off the top of my head, are 4 easy ways the bank could have avoided failing.

The fire analogy is a good one.  I'd take it a bit farther than Maned, though.  I'd say that Schumer shouted 'fire' in crowded theater while at the same time lighting the theater on fire.  Yes, in the end he proved right about the theater being on fire.  That doesn't absolve him of the guilt for being the one to light the fire in the first place.

Yeah, but those are all lottery ticket/magic potion solutions.  Sure, it's possible Enron might not have failed too if it suddenly had some portion of its business that made 10,000 percent profit.  But for these purposes, I think it's more than reasonable to confine the discussion to events that had something approaching a realistic chance of taking place.

[RocketMan]

You might as well quit arguing with shootinstudent.  It's apparent he is a banking expert, too.