This is EXACLTY what happens when you do dumb things. Your business fails.
IndyMac Bancorp Inc. became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash.
The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mailed statement today. Customers will have access to funds this weekend via automated teller machines. Regulators intend to eventually sell the company.
The Pasadena, California-based lender specialized in so- called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. IndyMac's home state, where Countrywide Financial Corp. was also located before it was bought last week, has been among the hardest hit by foreclosures.
``Given their focus on Alt-A and a heavy concentration in California, they would have suffered meaningful losses in almost any scenario,'' Brian Horey, president of Aurelian Management LLC in New York, said before the seizure was announced. Aurelian is short-selling IndyMac shares to gain from declines.
Had IndyMac ``applied some common sense and changed their approach to underwriting as the housing market peaked, they might have lived to see the next cycle,'' Horey said.
"Common sense". That pretty much sums it up there. Yes, it's sad that half of IndyMAC's employees will now be out of a job, but let's face it, when people get too greedy and make bad business decisions, it's their own fault. Would you have liked to have paid to bail these idiots out? They had a $900 MILLION dollar loss. Had some idiot politician wanted to bail them out, that's $3 bucks for every person in America to take idiot businessmen by the hand and say "that's ok, you'll be all right".
That's exactly what people are talking about with bailing out the larger lenders, but we're talking about a $300 BILLION dollar bailout that Christopher Dodd wants to put out. That's $1,000 per person in America. Oh, and did he forget to mention that he got a sweetheart deal on refinancing his home? Must have slipped his mind.
The only people to blame are the management team at IndyMAC. There's no one to bail them out, since we are all tired of propping up idiots. So guess what happens? You put an "out of business" sign in the window and you close up shop.
Travis
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