Saturday, July 12, 2008

IndyMac Bank Failure Misses News Cycle

Immediately after the stock market closed for the weekend (7-12-2008), the Office of Thrift Supervision (OTS) reported the federal takeover of IndyMac. The seizure came after a run on the California-based bank. According to the FDIC this was the third largest bank takeover in US history. At least 3800 employees will be sacked.

IndyMac was a spinoff of Countrywide Financial (Angelo Mozilo and David Loeb) and was heavily invested in high-risk mortgages.

The event came in light of news that Freddie Mac and Fannie Mae, the largest US mortgage-based security firms, were faltering. Julie Creswell (NY Times 7-13-08) reported that both institutions hired high level politicos for years and bought off activist groups by donating to their charities.

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