The collapse of IndyMac reminds us that the banking is built upon a certain amount of trust. Not only of the bankers themselves, but also of politicians. One of whom, the notorious activist legislator Charles Schumer, is accused of betraying that trust by leaking confidential information, or misinformation, about IndyMac’s health, thereby starting the run that brought down the institution. (California’s attorney general, fellow Democrat and gadfly politician Jerry Brown, refused to investigate the matter.)
Today’s Kip Clip is therefore dedicated to Senator Chuck E. Cheese:
Greedy capitalist bastards. They’re almost as bad as United States senators.
1 response so far ↓
Link Brian Miller // Sep 9, 2008 at 10:35 pm
Sorry Kip, but IndyMac was toast for a while — people knew it was in trouble for 12 months.
How could it survive? It was one of the largest purveyors of "liar loans" (Alt-A no doc mortgages).
Will you give me a mortgage for $3 million? I make $1 million a year, I swear!
(That was about all the documentation a no-doc mortgage required).
With that sort of cash burn, IndyMac's failure was a foregone conclusion. Chuck just stated the obvious for all the complete morons who still had money locked up in the institution, which had earned a dismal rating from TheStreet.com months before its end.