I wanted to drop a few notes about the ‘recovering economy’ lie that is being touted. First, this site is going to continue to go a bit sideways as I am working on posts that are all financials based and you know how TPTB really hate it when we aren’t talking about oil spills, terrorists, illegal aliens, and left vs. right. When one tries to explain that Goldman Sachs runs the government and not the other way ’round, or Greece is collapsing everything hits the fan. (As I write this, my host is running Emergency Maintenance because of problems.)
One coming attraction that should really set the world ablaze is the statement I heard today on ‘Your World’ that Bambi is going to say tomorrow that he will veto any financial reform legislation that threatens the independence of the Federal Reserve. Wow – that’s a newsflash, isn’t it.
More importantly, how many have noticed that the reports of bank seizures have taken a remarkable dive in the MSM? I’m sure MarketTicker has noticed, and I have to wonder what odds he would give on seven banks being seized the same day in only one state, that being Illinois on April 23rd, 2010?
In 2008, a total of 25 banks failed with 20 of those banks failing between July 11th and December 12th – this during the height of the Federal Reserve, Treasury, and Congressional freakout. In 2009, a total of 140 banks failed during the entire year; with an average of just over 11 banks a month. I just took a look at the FDIC Failed Banks List again, and we are currently at 64 banks in the first four months of 2010; an average of 16 banks per month.
Watch the entire video because it will explain in detail the money trail and why so few mortgage modifications are being made. No wonder they would not allow the banking systems to collapse, there wouldn’t be any bad paper to make an outrageous profit off of.
FOR IMMEDIATE RELEASE March 19, 2009 Media Contact: David Barr Office: (202) 898-6992 Cell: (703) 622-4790 Email: firstname.lastname@example.org
The Federal Deposit Insurance Corporation (FDIC) has completed the sale of IndyMac Federal Bank FSB, Pasadena, California, to OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings bank organized by IMB HoldCo LLC. OneWest will assume all deposits of IndyMac Federal. IMB HoldCo signed a letter of intent with the FDIC on December 31, 2008, to purchase IndyMac Federal.
The 33 branches of IndyMac Federal will reopen as branches of OneWest tomorrow. Depositors of IndyMac Federal will automatically become depositors of OneWest. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of January 31, 2009, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion. The FDIC will retain the remaining assets for later disposition.
FDIC and OneWest have entered into a loss share transaction on the single family residential portfolio. Under terms of the loss share agreement, OneWest will continue the FDIC’s existing loan modification program.
Customers who have questions about the transaction can call the FDIC toll-free at 866-806-5919. The phone number will be operational this evening until 9:00 p.m. Pacific Time; on Saturday from 9:00 a.m. to 6:00 p.m. Pacific Time; on Sunday from noon until 6:00 p.m. Pacific Time; and thereafter from 9:00 a.m. to 5:00 p.m. Pacific Time. Interested parties can also visit the FDIC’s website at http://www.fdic.gov/bank/individual/failed/IndyMac.html.
IndyMac Federal sustained losses of $2.6 billion in the fourth quarter 2008 due to deterioration in the real estate market. The total estimated loss to the Deposit Insurance Fund is $10.7 billion. No further payments on receivership claims for uninsured funds from former IndyMac Bank, F.S.B. will be distributed as a result of this transaction.
Publication: Financial Deals Tracker Date: Friday, March 20 2009
The Federal Deposit Insurance Corporation (FDIC), an independent government agency, has sold IndyMac Federal Bank, FSB, a provider of banking and home lending services, to OneWest Bank, FSB, a newly formed federal savings bank organized by IMB HoldCo LLC, a thrift holding company controlled by IMB Management Holdings LP.
IMB HoldCo is owned by a consortium of private equity investors led by Steven T. Mnuchin, co-chief executive of private equity firm Dune Capital Management LP, and other investors in the consortium include J.C. Flowers & Co., LLC, Paulson & Co., MSD Capital, L.P., Stone Point Capital LLC, SSP Offshore LLC, a fund managed by Soros Fund Management LLC, and SILAR MCF-I LLC, a fund controlled by Silar Advisors, LP. All the entities are based in the US.As of January 31, 2009, IndyMac Federal Bank had total assets of $23,500 million and total deposits of $6,400 million. OneWest has agreed to purchase all deposits and approximately $20,700 million in assets at a discount of $4,700 million. The FDIC will retain the remaining assets for later disposition.Announcement (December 31, 2008):FDIC has entered into a letter of intent to sell IndyMac Federal Bank to IMB HoldCo.Following the completion, IMB HoldCo will capitalize IndyMac Federal Bank with approximately $1,300 million in cash. The transaction is expected to close in the first quarter of 2009.Rumor (December 28, 2008):According to Bloomberg, the New York Times reported that a consortium of private equity and hedge fund firms is in negotiations to acquire IndyMac Federal Bank.The consortium includes investment firms J.C. Flowers and Dune Capital Management LP, and the hedge fund manager Paulson & Co., Inc.The acquisition would include IndyMac’s 33 branches, reverse- mortgage unit and its $176,000 million loan-servicing portfolio.Barclays Capital, Inc. and Deutsche Bank Securities, Inc. are acting as financial advisors to the FDIC. Merrill Lynch & Co., Inc. is acting as financial advisor, while Weiner Brodsky Sidman Kider PC and Cleary Gottlieb Steen & Hamilton LLP are acting as legal advisors to the consortium. Sullivan & Cromwell LLP is acting as legal advisor to J.C. Flowers and SSP Offshore. Simpson Thacher & Bartlett LLP is acting as legal advisor to Stone Point Capital, MSD Capital, and J.C. Flowers. Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal advisor to Paulson & Co.
Deal Value (US$ Million)13900Deal TypePrivate EquitySub-CategoryInstitutional Buy-out (IBO)Deal StatusCompleted: 2009-03-19
Deal ParticipantsTarget (Company)IndyMac Federal Bank, FSB.Vendor (Company)Federal Deposit Insurance Corporation
Is Bob Chapman of the International Forecaster correct when he says that his sources state that there are actually 2,035 banks in trouble and that in 2010, he expects between 2500 and 3000 bank failures? (See below post for audio.) Is he also correct when he states that this will cost the FDIC some $800 Billion to $1 Trillion dollars? What about that $800 Billion that Fannie and Freddie supposedly need? I’m still searching for confirmation of those exact numbers.
The Federal Deposit Insurance Corp. in the next year plans to add more than 1,600 staffers, mostly to handle bank failures, and is pushing its budget up 35% as the number of tottering banks climbs.
More than 130 banks have failed this year, and the agency’s inventory of assets in liquidation has more than doubled from the beginning of the year to $36.8 billion through the end of November. The FDIC has also agreed to share future losses on the assets of more than 80 failed banks, representing $108 billion in additional exposure.
In the agency’s 2010 operating budget, released Tuesday, the FDIC would spend $2.5 billion to fund its bank failure operations out of a total budget of $4 billion. The agency’s entire operating budget for 2009 was roughly $2.6 billion.
“It will ensure that we are prepared to handle an even larger number of bank failures next year, if that becomes necessary, and to provide regulatory oversight for an even larger number of troubled institutions,” FDIC Chairman Sheila Bair said in a statement.
In addition to expecting bank failures to increase, the FDIC said it expects the number of banks at risk of failing to rise in 2010. The FDIC has twice this year demanded banks pay billions in additional fees in order to keep its deposit-insurance fund solvent.
Regulators give banks a secret rating of 1 through 5 as a measurement of their health. Banks with a 1 rating are considered the healthiest.
“The number of 3-, 4- and 5-rated institutions has increased by over 80% thus far during 2009 and is expected to continue to increase next year,” the FDIC said. The forecast could mean further increases to the FDIC’s “problem list” of troubled banks, which stood at 552 at the end of the third quarter. (emphasis mine)
Do you remember when TurboTax Timmie as president of the NY Federal Reserve brokered the original AIG deal of $85 Billion, the sale of Bear Stearns, and allowed Lehman Bros to fail? Since that time, AIG has sucked $182 Billion out of our wallets with somewhere between $62 Billion and $90 Billion going to foreign banks. TTTimmie now wants to be able to seize any large company, and control the flow of money even more, with control being split between the Treasury, the Federal Reserve, and Congress; the institutions that appear to be the three founders of the current economic meltdown. TTT and the Obama administration are dancing on the fine edge in their appearances to the world right before the upcoming G20 meeting on April 2nd.
I was expecting what I read two days ago in the Washington Post:
The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.
The government at present has the authority to seize only banks.
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.
The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury’s role, are still in flux.
Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.
The administration’s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed’s other responsibilities, particularly its control over monetary policy.
The government also would assume the authority to seize such firms if they totter toward failure.
Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG’s most troubled unit.
And then this morning, once again from the Washington Post:
Treasury Secretary Timothy F. Geithner plans to propose today a sweeping expansion of federal authority over the financial system, breaking from an era in which the government stood back from financial markets and allowed participants to decide how much risk to take in the pursuit of profit.
The administration’s signature proposal is to vest a single federal agency with the power to police risk across the entire financial system. The agency would regulate the largest financial firms, including hedge funds and insurers not currently subject to federal regulation. It also would monitor financial markets for emergent dangers.
The administration yesterday detailed its proposed process, under which the Federal Reserve Board, along with any agency overseeing the troubled company, would recommend the need for a takeover. The Treasury secretary, in consultation with the president, then would authorize the action. The firm would be placed under the control of the Federal Deposit Insurance Corp. The government also would have the power to take intermediate steps to stabilize a firm, such as taking an ownership stake or providing loans.
One important difference is that the decision to seize a bank is made by agencies that have considerable autonomy and are intentionally shielded from the political process. Some legislators have raised concerns about providing such powers to the Treasury secretary, a member of the president’s Cabinet.
Our financial system has now been placed in the political arena alongside abortion and taxes….just more items for the politicians to use during elections. Thomas Jefferson is SPINNING in his grave…
If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children wake up homeless on the continent their fathers conquered – Thomas Jefferson