Financial Crisis Deepens as Big Bank Fails

UPDATE: 6:30 PM ...

The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York.

More here from the Feds.

The biggest whiner in the Senate, forever telling us that the Bush administration doesn't tell us anything, now we know why that is. They are irresponsible idiots. Everyone knows Sen Schumer has a big mouth, and generally nothing but lies for facts. It's just how it is in the liberal flat Earth society. The collapse of IndyMac Bank he may have gone over the line.

IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators, in the third-largest bank failure in U.S. history.

IndyMac is the biggest mortgage lender to go under since a fall in housing prices and surge in defaults began rippling through the economy last year -- and it likely won't be the last. Banking regulators are bracing for a slew of failures over the next year as analysts say housing prices have yet to bottom out.

The collapse is expected to cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion, potentially wiping out more than 10% of the FDIC's $53 billion deposit-insurance fund.

The Pasadena, Calif., thrift was one of the largest savings and loans in the country, with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank & Trust Co., which failed in 1984 with $40 billion of assets. The second-largest failure was American Savings & Loan Association of Stockton, Calif., in 1988.

Triggering a run on the bank's asset's -- It was all about BDS and grandstandinmg, wasn't it op-Chuck? If you had any doubts about Sen Schumer being an irresponsible idiot, this should clear those doubts up.

The director of the Office of Thrift Supervision, John Reich, blamed IndyMac's failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank's solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a "heart attack."

"Would the institution have failed without the deposit run?" Mr. Reich asked reporters. "We'll never know the answer to that question."

So can he be prosecuted for triggering the collaspe and why nt. In case you didn't notice, Schumer's big mougth costs the I.S> Treasury $4-8 billion and all uninsured depositers everything over $100,000. I doubt this kind of irresponsible action is covered by the 'debate' clause of the U.S. Constitution.