Old news, but yes another bank failure, if more than $100k in deposit in danger of loosing the moneyIndyMac FDIC information"All accounts that exceed the $100,000 insurance limit, and/or all accounts that appear to be related and exceed this limit, are reviewed by the FDIC to determine their ownership and insurance coverage. If you think you might have uninsured deposits you should call the FDIC Call Center to arrange for a telephone interview with a Claims Agent at 866-806-5919."CNN: "About 95% of the $19 billion in deposits in the bank are insured, but that leaves $1 billion that was not covered by FDIC guarantees. "How many bank failures can FDIC cover? when will FDIC run out of cash, will FED then step in and pump in more FIAT money? or what is the action here?and 1 billion not insured.The "FDIC" equivalent in another country had to get cash injections from the member banks, why? they had lost part of the insurance money in the stock market

Looks like the FDIC's DIF fund has about $50 billion to cover about 4 Trillion in insured deposits based on the graphs in http://www.fdic.gov/about/strategic/rep ... in_hi.html .The real question is the recovery ratio on IndyMac alt-A mortgage assets and how those get applied to FDIC-insured deposits vs. other liabilities of IndyMac. Does anyone know the pecking order for creditors in an FDIC seizure situation?At the very least, some banks are going to see some customer churn as rich depositors move their over-$100K eggs out of fragile baskets.

Regarding FDIC running out of cash, they will just borrow from the Treasury if necessary.Also, I would assume there would be a big (temporary) boost in the premiums the banks pay to replenish the fund. A little googling turned up this link with the priority of claims

From the FDIC website:QuoteThe banking system in this country remains on a solid footing through the guarantees provided by FDIC insurance. Our industry-funded reserves are strong and our insurance guarantee is backed by the full faith and credit of the United State Government. No bank depositor has ever lost a penny of insured deposits. On this, our 75th anniversary, we will continue that proud tradition."# # #Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,494 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.75 years or six months - it doesn't make any difference. Haven't the FDIC guys heard of martingales ?

QuoteOriginally posted by: AlanA little googling turned up this link with the priority of claimsThanks! That list makes sense, but doesn't specify the order in which money raised by liquidation of IndyMac versus FDIC money is used. I would assume that liquidation funds are applied first, in the order specified. Only if those funds are insufficient to cover the depositors (mingling FDIC and non-FDIC-backed deposits), then the FDIC steps in to cover the shortfall on FDIC-based deposits. If so, I'd think that the FDIC won't have to pay too much (other creditors will take the losses) and that even the $1 billion non-FDIC deposits will see a fairly high recovery ratio.

All that is true, but chew on this... FDIC is NOT liquidating IndyMac. My guess is it's because there is NO BID, which means the FDIC, to avoid another fire sale of mtg assets, just took $32bn of mtges on their balance sheet (and, guess what, FDIC's balance sheet is only $53bn). Does this procedure sound familiar to anyone?Next thing to think about, while we're contemplating just how over-leveraged FNM/FRE are, is FDIC's capital ratios (and let's include the $4-8bn they're gonna pay for unwinding IndyMac, which is their own, relatively conservative estimate). And yes, of course, the FDIC can charge banks extra, but are we not getting into some very dangerous territory here?It's all looking pretty scary to me, to tell the truth.

QuoteOriginally posted by: MartinghoulAll that is true, but chew on this... FDIC is NOT liquidating IndyMac. My guess is it's because there is NO BID, which means the FDIC, to avoid another fire sale of mtg assets, just took $32bn of mtges on their balance sheet (and, guess what, FDIC's balance sheet is only $53bn). Does this procedure sound familiar to anyone?Next thing to think about, while we're contemplating just how over-leveraged FNM/FRE are, is FDIC's capital ratios (and let's include the $4-8bn they're gonna pay for unwinding IndyMac, which is their own, relatively conservative estimate). And yes, of course, the FDIC can charge banks extra, but are we not getting into some very dangerous territory here?It's all looking pretty scary to me, to tell the truth.Those are good points, but it may not be as grim as it seems. Yes, FDIC took on $32 billion in dodgy mortgages as the supposed assets of IndyMac but FDIC also took on only $19 billion in liabilities (the amount of guaranteed deposits).I do agree with you on the increasing perils of the territory, but the edge of the precipice might be a little further down the slippery slope than it first appears. That said, stocks of regional banks dropped significantly today, so other bigger dominos may be heading for a tumble. WaMu lost 30% and its 10X the size of IndyMac.

QuoteAfter IndyMac's failure, which bank could be next?Monday July 14, 4:46 pm ET By Madlen Read, AP Business Writer NEW YORK (AP) -- The bank executives who promised months ago that the worst of the financial crisis had passed are looking less and less credible to investors. And that could pose a problem as the industry releases what are expected to be dismal second-quarter earnings over the next few weeks.Certainly, not all banks are going the way of IndyMac Corp., which was seized by the government on Friday. In fact, analysts expect several banks to come out on top as the industry consolidates in the coming years.But for now, investors aren't taking any chances. After IndyMac was seized -- the seventh bank to fail since the credit crisis began last summer, and the second-largest bank to fail in the Federal Deposit Insurance Corp.'s 75-year history -- stocks in nearly all the nation's banks were clobbered Monday as the market bet that there will be more failures.Stocks that were hit the hardest Monday included First Horizon National Corp., which operates in the Southern United States; Zions Bancorp, located in Utah and Idaho; and Washington Mutual Inc., the nation's largest savings and loan. Stocks of bigger banks such as Wachovia Corp., Citigroup Inc., Bank of America Corp., and Wells Fargo & Co., also tumbled.It's going to take more than a few hopeful corporate outlooks and capital raising plans this earnings season for investors and consumers to feel at ease again. No matter how much cash a bank has on hand, if enough customers are worried about their deposits and withdraw them, that bank will be in trouble, said Adam Schneider, a principal with Deloitte Consulting LLP."The noise becomes the story after a while," Schneider said. "Any institution can be hurt by a run on the bank."A virtual run by investors who had bought securities through Bear Stearns Cos. led to its demise in March, when the flailing investment bank was bought by JPMorgan Chase & Co.By examining banks' ratios of defaulting loans to total outstanding loans and to reserves and stock -- two measures of a bank's health -- only a handful of companies appear to be in jeopardy, according to bank analyst Richard Bove of Ladenburg Thalmann. These small banks include Downey Financial Corp., Corus Bankshares Inc., Doral Financial Corp., BFC Financial Corp., BankUnited Financial Corp. and FirstFed Financial Corp.However, bank runs are unpredictable. To be sure, IndyMac did hold an extremely high number of defaulting loans compared to its total loans and reserves -- but the Southern California lender was not on the FDIC's list of 90 banks that could be in danger of failing.This is why even those banks that have worked to raise extra cash are still losing investors.Responding to its plunging stock price, National City said Monday it "is experiencing no unusual depositor or creditor activity," and that it had more than $12 billion in extra short-term liquidity at the close of the business day Friday. National City is expected to report a second-quarter loss on July 24.And Washington Mutual tried to reassure investors Monday by saying it has enough cash available to survive tough conditions.But home values are still falling, giving the market little reason to believe in a rebound anytime soon."It is a bit premature to suggest that this is the bottom," said Aite Group LLC bank analyst Eva Weber. "We'll need to keep a close eye on what the housing market continues to do."The situation could be worse, according to Deloitte's Schneider. "We're not seeing massive runs on the bank on a Depression-era scale." And the ones that have occurred are "pretty orderly failures."Also, big-name banks that have been losing money for nearly a year now -- like Citigroup Inc. -- have not yet seen depositers bail.Citigroup, the nation's largest bank by assets, is expected on Friday to post a second-quarter loss, which would be its third-straight quarterly shortfall. The other four big U.S. banks are also expected to report worse results than last year and issue grim outlooks. Wachovia Corp. already announced it will post a loss for the second quarter, and analysts predict JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo will report profit declines.Washingto Mutual is expected to report a second-quarter loss next week. Lehman Brothers analyst Bruce Harting predicted Monday the thrift will take a $4 billion loss provision, and that its loan losses will eventually amount to $26 billion.For consumers, the worry is that they'll have an even more difficult time finding loans at affordable rates. When a bank says it is tightening lending standards and shedding assets, it means it's issuing fewer loans and charging higher rates -- particularly for mortgages and home-equity loans."They can expect a harder and longer search, and they can expect that rates will vary from institution to institution," Schneider said, noting that banks are targeting customers with better credit histories and more stable jobs and incomes.The FDIC estimated it will take $4 billion to $8 billion to cover IndyMac's deposits, likely lowering its reserve ratio to a level that would require it to reassess the rates it charges banks.When it comes to the day-to-day business of operating checking and savings accounts, not very much is changing for the consumer. But IndyMac's failure serves as a stark reminder to not deposit more than $100,000 in an account at a single institution -- the FDIC generally only guarantees up to $100,000 of your money if your bank goes under, or $250,000 for some retirement accounts. Beyond that amount, the government decides whether to pay back the customer on a case-by-case basis.Incredible.

Go fuck yourself.

New York Times article.QuoteAs home prices continue to decline and loan defaults mount, federal regulators are bracing for dozens of American banks to fail over the next year.But after a large mortgage lender in California collapsed late Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next?The nation’s banks are in far less danger than they were in the late 1980s and early 1990s, when more than 1,000 federally insured institutions went under during the savings-and-loan crisis. The debacle, the greatest collapse of American financial institutions since the Depression, prompted a government bailout that cost taxpayers about $125 billion.But the troubles are growing so rapidly at some small and midsize banks that as many as 150 out of the 7,500 banks nationwide could fail over the next 12 to 18 months, analysts say. Other lenders are likely to shut branches or seek mergers.

QuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: MartinghoulAll that is true, but chew on this... FDIC is NOT liquidating IndyMac. My guess is it's because there is NO BID, which means the FDIC, to avoid another fire sale of mtg assets, just took $32bn of mtges on their balance sheet (and, guess what, FDIC's balance sheet is only $53bn). Does this procedure sound familiar to anyone?Next thing to think about, while we're contemplating just how over-leveraged FNM/FRE are, is FDIC's capital ratios (and let's include the $4-8bn they're gonna pay for unwinding IndyMac, which is their own, relatively conservative estimate). And yes, of course, the FDIC can charge banks extra, but are we not getting into some very dangerous territory here?It's all looking pretty scary to me, to tell the truth.Those are good points, but it may not be as grim as it seems. Yes, FDIC took on $32 billion in dodgy mortgages as the supposed assets of IndyMac but FDIC also took on only $19 billion in liabilities (the amount of guaranteed deposits).I do agree with you on the increasing perils of the territory, but the edge of the precipice might be a little further down the slippery slope than it first appears. That said, stocks of regional banks dropped significantly today, so other bigger dominos may be heading for a tumble. WaMu lost 30% and its 10X the size of IndyMac.The thing that worries me about this picture is a) IndyMac was not one of the banks on the FDIC 'watch list' of 90 troubled institutions; b) the US GOVT, as a whole, is running out of balance sheet very very fast here, and yet no end is in sight. What happens when there's no balance sheet left?

see this thread: sen. chuck schumer caused it

QuoteOriginally posted by: MartinghoulThe thing that worries me about this picture is a) IndyMac was not one of the banks on the FDIC 'watch list' of 90 troubled institutions; b) the US GOVT, as a whole, is running out of balance sheet very very fast here, and yet no end is in sight. What happens when there's no balance sheet left?This is where the government simply prints more money. Printing more money has the magical effect of reducing everyone's debt-related liabilities and making U.S. exports more price-competitive -- people would owe less money and sell more stuff abroad! Of course, an inflation-driven surge in interest rates would make houses even less affordable, reduce housing prices further, and cause more foreclosures -- perhaps that's not so good.....The real issue is: if FRE and FNM are "too big to fail" so that U.S. officials bail-out the these firms, then is the U.S. treasury "too big to fail" which means that other central bankers will bail-out the U.S.????

Go fuck yourself.

QuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: MartinghoulThe thing that worries me about this picture is a) IndyMac was not one of the banks on the FDIC 'watch list' of 90 troubled institutions; b) the US GOVT, as a whole, is running out of balance sheet very very fast here, and yet no end is in sight. What happens when there's no balance sheet left?This is where the government simply prints more money. Printing more money has the magical effect of reducing everyone's debt-related liabilities and making U.S. exports more price-competitive -- people would owe less money and sell more stuff abroad! Of course, an inflation-driven surge in interest rates would make houses even less affordable, reduce housing prices further, and cause more foreclosures -- perhaps that's not so good.....The real issue is: if FRE and FNM are "too big to fail" so that U.S. officials bail-out the these firms, then is the U.S. treasury "too big to fail" which means that other central bankers will bail-out the U.S.????Wouldn't a surge in inflation make people less likely to default? If I borrowed money for 30 years at 6.5%, and inflation rose to, say, 6.5% over the term of the mortgage, I'd be pretty happy.I don't get the balance sheet thing. Even if half the agency-backed bonds went into default (which is highly unlikely), and the govt had to absorb the losses, it'd still cost less than the Iraq war. The budget situation would just go from horrible to more horrible.