Post by: Manedwolf on July 12, 2008, 10:09:52 PM
Quote
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?
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.
Post by: Regolith on July 12, 2008, 10:45:22 PM
Post by: Dannyboy on July 13, 2008, 04:50:56 AM
Post by: Bigjake on July 13, 2008, 05:34:42 AM
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..
Post by: roo_ster on July 13, 2008, 06:08:53 AM
Post by: Ben on July 13, 2008, 06:26:08 AM
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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.
Post by: longeyes on July 13, 2008, 07:48:47 AM
The Time-Out is coming.
Post by: RocketMan on July 13, 2008, 09:11:30 AM
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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.
Post by: El Tejon on July 13, 2008, 09:29:09 AM
Post by: Azrael256 on July 13, 2008, 09:31:14 AM
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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."
Post by: RocketMan on July 13, 2008, 10:41:51 AM
You mean he did it "because he could."
Yup, pretty much the same thing.
Post by: The Annoyed Man on July 13, 2008, 12:45:48 PM
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[. . .] 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.
Post by: De Selby on July 13, 2008, 10:02:40 PM
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.
Post by: MechAg94 on July 14, 2008, 10:44:56 AM
Post by: De Selby on July 14, 2008, 12:22:24 PM
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.
Post by: Headless Thompson Gunner on July 14, 2008, 12:36:14 PM
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.
Post by: De Selby on July 14, 2008, 12:38:16 PM
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.
Post by: Headless Thompson Gunner on July 14, 2008, 12:55:33 PM
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. 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.
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.
Post by: De Selby on July 14, 2008, 01:01:34 PM
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.
Post by: Manedwolf on July 14, 2008, 01:25:06 PM
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.
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.
Post by: Headless Thompson Gunner on July 14, 2008, 01:36:51 PM
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.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.
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.
Post by: De Selby on July 14, 2008, 01:43:32 PM
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.
Post by: Headless Thompson Gunner on July 14, 2008, 01:55:48 PM
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.
Post by: De Selby on July 14, 2008, 02:07:41 PM
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.
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.
Post by: RocketMan on July 14, 2008, 07:30:32 PM
Post by: Manedwolf on July 14, 2008, 07:46:35 PM
Maned,
This is more like yelling fire in a theater that is...on fire.
This is more like yelling fire in a theater that is...on fire.
No. It's like noticing a tiny bit of smoke from something smoldering, yelling "Fire" and causing a trample panic, instead of seeing what can be done to put it out while at the same time quietly getting people towards the exit.
Hadn't you already known Schumer is an absolute idiot who spews trash from his mouth with absolutely no brain behind it? Look at what he says about guns.
Post by: De Selby on July 14, 2008, 07:55:18 PM
Maned,
This is more like yelling fire in a theater that is...on fire.
This is more like yelling fire in a theater that is...on fire.
No. It's like noticing a tiny bit of smoke from something smoldering, yelling "Fire" and causing a trample panic, instead of seeing what can be done to put it out while at the same time quietly getting people towards the exit.
Hadn't you already known Schumer is an absolute idiot who spews trash from his mouth with absolutely no brain behind it? Look at what he says about guns.
Uh, you consider what was imminent failure absent some miracle appearance of tens of billions in cash (in a market with a serious credit crunch) to be "smoke"?
I'm amazed at how a group that can be so supportive of private property rights, can be so permissive of theft via mismanagement. Schumer didn't hold himself out to be an honest provider of banking services, then take millions in money into his accounts, and use it to gamble on garbage loans resulting in huge losses. IndyMac did that.
IndyMac took other people's money, and lost it through grossly negligent management. What kind of culture of personal property rights do you expect to maintain when you live in a country where "that's just the cost of doing business", and it's wrong to even mention it out of fear that the grossly negligent business might fold because it has to give back angry customers' money?
Post by: Manedwolf on July 14, 2008, 08:05:07 PM
You might as well quit arguing with shootinstudent. It's apparent he is a banking expert, too.
Yeah, I'm noticing that.
Post by: Headless Thompson Gunner on July 14, 2008, 08:11:20 PM
You might as well quit arguing with shootinstudent. It's apparent he is a banking expert, too.
Yeah, I'm beginning to get that impression.Edit: Heh, looks like Maned beat me to it.
Post by: De Selby on July 14, 2008, 08:23:32 PM
You might as well quit arguing with shootinstudent. It's apparent he is a banking expert, too.
You don't need to be a banking expert to recognize when someone is behaving recklessly with the property of another. That's a matter of common sense, which is why it's all the more egregious when "financial experts" do it.
Post by: MechAg94 on July 15, 2008, 11:27:34 AM
But some of these threads are more lively because of it so no big deal. 
It was very irresponsible of Schumer to do what he did. It is even more reckless and irresponsible if he is on the committee that is overseeing this bank activity and watched them get into this situation over the last few years. Whether any other motives were involved is unknown. IMO, that goes for any party.
Isn't a bank run where creditors demand all their money back and it is more than what the bank has on hand to give? Given that, it is impossible to guess whether the bank would have failed soon, later, or ever. All that is for sure is that they were in a poor financial position and Schumer's comments came at a bad time.
Post by: RaspberrySurprise on July 16, 2008, 02:48:24 AM
Post by: MechAg94 on July 16, 2008, 05:08:02 AM
Post by: De Selby on July 16, 2008, 11:48:23 AM
I tend to agree with that, but I still think Schumer should keep his mouth shut about it, mainly due to his position in the Congress. If he were some guy in the media I wouldn't care so much.
In other words, you're upset that Schumer let IndyMac's customers in on the truth about IndyMac's financial situation, and that those consumers then acted on his truthful information?
Post by: MechAg94 on July 16, 2008, 12:13:51 PM
Post by: De Selby on July 16, 2008, 12:15:14 PM
No, just that if his job is oversight of this sort of mess, he is probably supposed to prevent it or make sure it is public long before it gets that bad.
Okay, but once it gets that bad....stating truthful information to the media is wrong? He should keep indymac's secrets from its customers?
And look-now IndyMac's being investigated for fraud. But don't let that stop you from blaming a guy who stated truthful information in public for this mess.
Post by: Headless Thompson Gunner on July 16, 2008, 04:36:08 PM
In reality, IndyMac wasn't in imminent danger. Deposits had been increasing steadily in the weeks prior to Chuck's bank run. OTS regulators had been monitoring the bank all along, and had concluded that a regulatory takeover wasn't necessary because there was no immediate danger of failing. They had been working with IndyMac and other banks to come up with a buyout that would protect all of IdnyMac's depositors. (A buyout would have been perfectly normal in a case like this, not a "miracle" as shootinstudent claims.)
John Reich, Director of the Office of Thrift Supervision, wrote a letter back to Schumer, trying to beg, plead, or shame Schumer into shutting up. It didn't work.
Quote
"As a regulator of insured depository institutions, we do not publicly comment on the financial condition or supervisory activities related to open and operating institutions," Reich wrote. "We believe it is critically important to maintain the confidentiality of examination and supervision information."
He went on: "Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades. Rumors and innuendo cause damage to financial institutions that might not occur otherwise and these concerns drive our strict policy of privacy."
Reich knew that Schumer's comments were going to cause a run that could kill the bank. Schumer had to have known it too. Nobody could be that stupid, least of all a Senator on the banking oversight committee. Schumer leaked his letter because he wanted IndyMac to fail.He went on: "Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades. Rumors and innuendo cause damage to financial institutions that might not occur otherwise and these concerns drive our strict policy of privacy."
Regulators were aware of the problems with IndyMac and were working with them behind the scenes to find a buyer to take over the bank and prevent any losses to depositors. According to the OTS:
Quote
* With limited prospects of maintaining adequate capitalization, IndyMac sought to obtain a significant capital infusion or to find a buyer.
* The pressure on IndyMac required time to be relieved. Negative news coverage and a subsequent deposit run beginning on June 27, 2008 took that time away. The deposit run followed the release of a letter from Senator Charles Schumer to the FDIC and OTS on June 26, 2008. The letter outlined the Senators concerns with IndyMac. The institution did not have sufficient access to liquidity to withstand the deposit run.
IndyMac had a good chance at returning to normalcy, either through recapitalization or a buyout. Either possibility would have protected depositors. By forcing the run when he did, Schumer killed any chance at a positive outcome for IndyMac.* The pressure on IndyMac required time to be relieved. Negative news coverage and a subsequent deposit run beginning on June 27, 2008 took that time away. The deposit run followed the release of a letter from Senator Charles Schumer to the FDIC and OTS on June 26, 2008. The letter outlined the Senators concerns with IndyMac. The institution did not have sufficient access to liquidity to withstand the deposit run.
The bottom line is that we know for certain IndyMac wouldn't have failed right now without Schumer's intervention, and we know there was a strong possibility that IndyMac wouldn't have failed at all if not for Schumer's actions. Schumer killed the bank deliberately, by behaving in a manner that was shockingly, reckless, and deliberately negligent.
If there were any justice in the world Schumer would be tarred and feathered for this stunt. Here's to hoping IndyMac shareholders sue the bejeezus out of him.
Post by: m1911owner on July 16, 2008, 05:53:43 PM
If you or I did what Schumer did, we'd not only be looking a massive lawsuits, we'd probably also be looking a spending some hard time in the slammer.
Post by: Waitone on July 18, 2008, 02:49:26 AM
Post by: thebaldguy on July 18, 2008, 01:42:00 PM
I'm laughing at the blame game. Let me get this straight: a bank is doing bad, but customers shouldn't know because they will pull their money out.
Ok.
I have a right to bank where ever I want. If a bank is going bad, why should I give them my money? Why should I support inflated salaries of the big shots at the bank for doing a bad job?
Post by: De Selby on July 18, 2008, 01:45:39 PM
Don't consumers have a right to know how a bank is doing? If a bank is not doing very well, don't the customers have a right to know?
I'm laughing at he blame game. Let me get this straight: a bank is doing bad, but customers shouldn't know because they will pull their money out.
Ok.
I have a right to bank where ever I want. If a bank is going bad, why should I give them my money? Why should I support inflated salaries of the big shots at the bank for doing a bad job?
I'm laughing at he blame game. Let me get this straight: a bank is doing bad, but customers shouldn't know because they will pull their money out.
Ok.
I have a right to bank where ever I want. If a bank is going bad, why should I give them my money? Why should I support inflated salaries of the big shots at the bank for doing a bad job?
Because they'll be able to take better care of your money if no one ever talks about what's going on with the books?
I don't get it either; blame goes to the guy who committed fraud in running the bank, not the guy who let the public know they were being cheated.
Post by: longeyes on July 18, 2008, 01:51:20 PM
Post by: thebaldguy on July 18, 2008, 02:01:48 PM
No banker will ever tell you to NOT put more than $100,000.00 in their bank. They don't always look out for YOUR best interests.
Post by: Racehorse on July 18, 2008, 02:50:43 PM
They don't keep much money on hand at all. Anyone that would knowingly leak information that would cause a run on a bank is very irresponsible. It's usually possible to sell off the assets and liabilities of a bank to keep customers from losing their money. In this case, it would have been possible. But Schumer precipitated a run on the bank that caused many people to lose a lot of money.
When a business or economy runs in large part on consumer confidence, as ours does, predictions of doom usually become self-fulfilling prophecies.
Post by: thebaldguy on July 18, 2008, 03:58:56 PM
There seems to be a basic lack of understanding on the part of some in this thread about how a bank functions. No bank ever has the money on hand to repay all or even a substantial portion of its depositors. A run on ANY bank would cause it to fail. Banks work by borrowing money from consumers and businesses and then lending that money to other consumers and businesses. They make money by charging more to those they lend to than what they pay out to depositors.
They don't keep much money on hand at all. Anyone that would knowingly leak information that would cause a run on a bank is very irresponsible. It's usually possible to sell off the assets and liabilities of a bank to keep customers from losing their money. In this case, it would have been possible. But Schumer precipitated a run on the bank that caused many people to lose a lot of money.
When a business or economy runs in large part on consumer confidence, as ours does, predictions of doom usually become self-fulfilling prophecies.
They don't keep much money on hand at all. Anyone that would knowingly leak information that would cause a run on a bank is very irresponsible. It's usually possible to sell off the assets and liabilities of a bank to keep customers from losing their money. In this case, it would have been possible. But Schumer precipitated a run on the bank that caused many people to lose a lot of money.
When a business or economy runs in large part on consumer confidence, as ours does, predictions of doom usually become self-fulfilling prophecies.
I've worked in brokerage/finance/banking for over 10 years. I know how banks work all too well. I know that they only need to keep a small percentage of cash on hand. I'm also upset that they are depending on people keeping their money in a bank to keep it afloat because they made bad business decisions.
Again, why should I keep my money in a bank that gave loans to people they shouldn't have given loans to? I'm supposed to support a business that made bad business decisions? I'm supposed to make sure the overpaid bad decision makers keep making millions in salaries? They don't get punished, employees get laid off, and they keep their jobs and big salaries for running a bad business?
Maybe it's time to starve the monster. Maybe it's time to pass a law that says if a bank gets bailed out, the big shots go to jail.
HAHAHAHAHAHAHAHAHAHAHA! Like THAT would ever happen...
Post by: De Selby on July 18, 2008, 04:14:30 PM
There seems to be a basic lack of understanding on the part of some in this thread about how a bank functions. No bank ever has the money on hand to repay all or even a substantial portion of its depositors. A run on ANY bank would cause it to fail. Banks work by borrowing money from consumers and businesses and then lending that money to other consumers and businesses. They make money by charging more to those they lend to than what they pay out to depositors.
They don't keep much money on hand at all. Anyone that would knowingly leak information that would cause a run on a bank is very irresponsible. It's usually possible to sell off the assets and liabilities of a bank to keep customers from losing their money. In this case, it would have been possible. But Schumer precipitated a run on the bank that caused many people to lose a lot of money.
When a business or economy runs in large part on consumer confidence, as ours does, predictions of doom usually become self-fulfilling prophecies.
They don't keep much money on hand at all. Anyone that would knowingly leak information that would cause a run on a bank is very irresponsible. It's usually possible to sell off the assets and liabilities of a bank to keep customers from losing their money. In this case, it would have been possible. But Schumer precipitated a run on the bank that caused many people to lose a lot of money.
When a business or economy runs in large part on consumer confidence, as ours does, predictions of doom usually become self-fulfilling prophecies.
Yeah, I think we all understand that-but that isn't what happened to IndyMac.
A bank that is performing well doesn't have people lining up in the streets to take their money based on truthful press releases; IndyMac had that because the bank was failing in such a way that the liabilities were going to eat the whole thing.
Post by: Racehorse on July 19, 2008, 04:36:10 AM
Again, why should I keep my money in a bank that gave loans to people they shouldn't have given loans to? I'm supposed to support a business that made bad business decisions? I'm supposed to make sure the overpaid bad decision makers keep making millions in salaries? They don't get punished, employees get laid off, and they keep their jobs and big salaries for running a bad business?
I haven't seen anyone here blaming the customers for wanting to take their money out. I don't think anyone has a problem with that. What I have a problem with is Schumer spouting off about the bank's status thereby creating a situation where depositors lost more money than they would have otherwise. Do you think that was the right decision on Schumer's part?
Post by: Racehorse on July 19, 2008, 04:41:21 AM
A bank that is performing well doesn't have people lining up in the streets to take their money based on truthful press releases; IndyMac had that because the bank was failing in such a way that the liabilities were going to eat the whole thing.
Actually, a bank that is performing well could very easily have people lining up in the streets to take their money if a high-ranking official gave an opinion that the bank was not stable and may fail.
Of course IndyMac was doing poorly. But had Schumer kept his mouth shut, a lot more depositors would have gotten their money out than actually did. Headless Thompson Gunner's post made that point quite well.
I just don't get it. Why are you defending Schumer? What he did was idiotic at best and malicious at worst.
Post by: Rocketman56 on July 19, 2008, 06:39:19 AM
the OTS asked him not to, then I would have to look at that as a political act.. Regulators
have taken over banks to save depositors.. (It happened a short while ago to ANB here in town..)
Usually, depositors don't lose in a take-over.. Shareholders do, but that's a different issue..
There's a suspicion of malice here.. A valid suspicion... Who are the people who lost a lot
of money in IndyMac, either depositors or shareholders?? If many are elite in the other party,
then the suspicion becomes even more valid.. Schumer would have had that information
or could have obtained it easily..
Care to comment on that supposition?
Steve
Post by: thebaldguy on July 19, 2008, 08:29:40 AM
Banks made very bad business decisions, and that needs to be kept secret from the general public? I think not! If they are afraid of a run on a bank, then the overpaid bank owners need to get their act together. They made very bad business decisions, and they feel that needs to be kept a secret so people won't suddenly pull their money out? Give me a break!
I hate supporting overpaid business owners who made bad business decisions, especially banks. They can lend out all their customers' money, lose it, and watch the FDIC cover their bad decisions will absolutely no risk. They get to keep their inflated salaries, and taxpayers foot the bill and inflation increases.
Deceiving customers and forcing them to keep money in a poorly run bank is not right. The heads of those banks need to suffer for their bad decisions, but that will never happen.
If you even think your bank sucks, pull out your money and put it into a better bank. Well run banks deserve your business; badly run banks do not.
Post by: De Selby on July 19, 2008, 12:21:27 PM
A bank that is performing well doesn't have people lining up in the streets to take their money based on truthful press releases; IndyMac had that because the bank was failing in such a way that the liabilities were going to eat the whole thing.
Actually, a bank that is performing well could very easily have people lining up in the streets to take their money if a high-ranking official gave an opinion that the bank was not stable and may fail.
Yes, but in that case, the opinion would not be truthful or it would be at least incorrect.
In this case, Schumer's opinion was neither untruthful, nor incorrect.
See the distinction? I'm defending releasing truthful, accurate information about a bank's performance. If the information is absolutely true and the implications drawn from it are accurate, the blame goes to the bank that made the bad business decisions, not the person who truthfully informed consumers.
By the logic you seem to be using here, the Justice Department, not Enron, screwed all the Enron retirees, since more of them would've had a chance to move stock before it went down to pennies if Enron had not been investigated.
Post by: PremiumSauces on July 20, 2008, 09:41:12 AM
Post by: Headless Thompson Gunner on July 20, 2008, 10:39:04 AM
I guess my point is why are banks trying to keep their business failures a secret? Why doesn't the general public legally have the right to know why and which banks are failing?
Banks made very bad business decisions, and that needs to be kept secret from the general public? I think not! If they are afraid of a run on a bank, then the overpaid bank owners need to get their act together. They made very bad business decisions, and they feel that needs to be kept a secret so people won't suddenly pull their money out? Give me a break!
I hate supporting overpaid business owners who made bad business decisions, especially banks. They can lend out all their customers' money, lose it, and watch the FDIC cover their bad decisions will absolutely no risk. They get to keep their inflated salaries, and taxpayers foot the bill and inflation increases.
Deceiving customers and forcing them to keep money in a poorly run bank is not right. The heads of those banks need to suffer for their bad decisions, but that will never happen.
If you even think your bank sucks, pull out your money and put it into a better bank. Well run banks deserve your business; badly run banks do not.
IndyMac's troubles were no great secret, customers had every opportunity to learn about them. I agree with you that it's a tragedy that the bank's depositors were deceived. But it wasn't IndyMac who lied to depositors, it was Schumer who deliberately painted a false picture of the bank's solvency. Schumer cherry picked negative information from a confidential investigation, stripped out all of the mitigating positive factors, then leaked that to the media along with heavily inflamed "ZOMG!!111 GIT YOUR MONEY OUT WHILE YOU STILL CAN" innuendos.
Banks made very bad business decisions, and that needs to be kept secret from the general public? I think not! If they are afraid of a run on a bank, then the overpaid bank owners need to get their act together. They made very bad business decisions, and they feel that needs to be kept a secret so people won't suddenly pull their money out? Give me a break!
I hate supporting overpaid business owners who made bad business decisions, especially banks. They can lend out all their customers' money, lose it, and watch the FDIC cover their bad decisions will absolutely no risk. They get to keep their inflated salaries, and taxpayers foot the bill and inflation increases.
Deceiving customers and forcing them to keep money in a poorly run bank is not right. The heads of those banks need to suffer for their bad decisions, but that will never happen.
If you even think your bank sucks, pull out your money and put it into a better bank. Well run banks deserve your business; badly run banks do not.