Indymac Bank, the largest independent mortgage provider (a title formerly held by Countrywide until it failed into the arms of Bank of America), was seized Friday by federal regulators. The bank held about $32 billion in assets, although its anyone's guess what those might be worth these days. The Federal Deposit Insurance Corp will run the bank, promising to have it open for business on Monday. The Journal says the cost of the bank failure will be between $4 billion and $8 billion.
Weirdly, the same finger prints that were found on the corpse of Countrywide are all over this collapse of a large mortgage bank. That's right. Meet the founder of Indymac, Angelo Mozilo. Back in Mozilo, the former chief executive of Countrywide, and David Loeb, a founder of Countrywide, founded Indymac. Mozilo left in 2000. Someone please tell us there's not a third huge home lender founded by the toxic duo.
Crisis Deepens as Big Bank Fails [Wall Street Journal]
Posted by guest , Jul 12, 2008 1:18AM
Is anybody besides Goldman Sachs and Blackstone getting rich off this whole fucking disaster that is called the credit crisis?
Schwarzman, James, Blankfein and Thain too (he still has 2.7 mil shares of GS).
I hope somebody kills the fuckers. It would be good for morale and a cause for celebration.
Posted by guest , Jul 12, 2008 1:23AM
P.S. to my post above.
Oh. Add that fucking Mozilo guy too. I think many would celebrate if that turd were flushed.
Posted by guest , Jul 12, 2008 1:25AM
Sometimes there is just no other way...
Posted by guest , Jul 12, 2008 9:52AM
guest@1:18, wow you are pretty jaded now! I guess you lost a bit of money due to the ineptitude of the MoMo.
So, anyone who profited by reading the obvious handwriting on the wall should be put to death? That's harsh...
Posted by StMarc , Jul 12, 2008 10:41AM
(From another post)
Incidentally, OTS blames that rumormongering bastard Sen. Charles Schumer (D-NY) for IndyMac's bank run-style failure.
Schumer blames IndyMac's "dumb as a sack of wet hair" management for lending money to dead people, cats, and space aliens.
Only one possible response...
Burn him! Burn the witch!
M
Posted by guest , Jul 12, 2008 11:26AM
@StMarc,10:41am,
Don't burn Schumer; burn Mozilo and Loeb.
@9:52am,
No dude. I'm losing money right now because of the ineptitude of Wall St, just like most everyone else is. Some select, messy assinations of hi-profile Wall St assholes would send a very powerful message to those left standing.
Dude, please don't try to justify the the astonishingly risky, unrestrained behavior of the Wall St playuhs, ballers and rainmakers(what a fucking retarded name, rainmaker) that created this fucking debacle.
Yes, Wall St created it. The mortgage idiots wouldn't have been making insanity loans to unqualified borrowers if there wasn't a whole group of Wall St IB's just waiting and ejaculating all over themselves in anticipation of buying those loans, packaging them up, selling them to bagholders, and then betting with leveraged money on whether the mortgages would fail or not. They kept collecting fees all along the way too. Yes, burn the mother fuckers.
The damage they've done to America is ongoing, and its extent is still unknown.
Posted by guest , Jul 12, 2008 11:45AM
@St Marc and @9:52am,
Don't think it can't happen. Hiding behind lawyers and ill-gotten money is no deterrent to a small group of committed, pissed-off and well-trained people.
Had Wall St's greed encroached on drug-gang territory, I have no doubt that the distinguished Hamilton E James would have been wasted long ago (his fucking complicit family too). Don't you agree? Talk about messy.
As the 1:25am poster said, "Sometimes there's just no other way..." (To right things , that is)
Posted by guest , Jul 12, 2008 11:53AM
@11:45 - Fear and greed are the great motivators on Wall St. Your idea would give a new meaning to the "fear" part.
Can't you just imagine Schwarzman having piss running down his leg and into his $5k shoes while he's standing there wondering if they're coming for him next? Hahaha. I'd love it.
Posted by guest , Jul 12, 2008 6:22PM
Bring back Sandy.
And the umberella.
Posted by NSD , Jul 12, 2008 6:23PM
@11:26 - if you are referring to your portfolio, don't complain. find a way to be profitable or move into cash. no one made you invest in anything, you did it of your own free will.
Posted by guest , Jul 12, 2008 7:34PM
NSD=ass pimple
Posted by guest , Jul 12, 2008 8:23PM
Wow, some real heat in here. Let's try to look on the humorous side.
Given that he has been wrong on every single call that he has made to this point during the financial crisis and having taken credit for "breaking news", we can look forward to Gasbagarumor breaking the news on Monday morning that Indy went down and that there is a connection to Mazilo and Loeb and that they called him (he doesn't need to call sources, as all roads in the media lead to the bigest fucking dope in the media and they call him) to give him the inside skinny. "Soes alls yous guys need to knows is that I breaka all da nuuus." So in anticipation of this ineviable claim, laugh your ass off at the expense of the on airheaded moron. Break news? Breaks wind instead. Couldn't break a window with a bulldozer. So be watching on Monday and let's see how many times he claims to have broken "dis" story.
Posted by guest , Jul 12, 2008 8:31PM
Pretty funny 8:34. You obviously read the post from another subject. In the event that you have not, I have cut and pasted it for you. Very funny.
The simple fact of the mattter is that his nickname is Gasbararumor for a reason. He is a fucking moron who knows nothing about finance and is little more than a puppet used by people wanting a desired outcome - and they got it. Beyond his obvious stupidity and inability to complete a sentence, Gasbagarumor is dangerous. Why you may ask? Because he is so desperate to succeed, and so limited in his abilities, he is inclinded to make shit up or at best single source it. And, yes, VF may have pointed the finger at CNBC, but they were really fingering Gasbagarumor who has little more than to say "alls yous guys knows wes guys broke dat story foyst" And, he plants stories with outlets like the Post. Check this out from this morning's NY Post:
"Charlie Gasparino, one of the CNBC reporters mentioned in Burrough's story, said: "CNBC didn't report rumors. What we were talking about was market activity. . . In those critical hours we were reporting what was happening in the markets. What are we going to do? Ignore it?" Bullshit moron. They call you Gasbagarumor for a reason.
Posted by guest , Jul 12, 2008 8:34PM
Sorry. meant 8:23
Posted by NSD , Jul 13, 2008 2:37AM
@7:34 is that you togfd?
why the animosity? there is always some one on the other side of the trade. if you are on the wrong side, figure out how to get on the right side.
Posted by guest , Jul 13, 2008 9:54AM
NSD? TOGFD? BFD. 2:37 in the morning? Got to be the subject of the comment responding at such an hour.
Obviously, not written by a trader. Correct, there are two sides to every trade. Figuring out how to get on the other side (or right side as you state) is a gross oversimplification. That would be like shorting against yourself.
Now you, the nocturnal poster, are probabaly shorting against yourself all night long. My advice - use your left hand more!
Posted by guest , Jul 13, 2008 10:55AM
@9:54 - Laughed so hard, I snorted OJ all over my keyboard!
Posted by guest , Jul 13, 2008 12:35PM
Thank you 10:55. Thank you very much. Always happy to bring a smile!
Posted by guest , Jul 13, 2008 5:45PM
Dear 11:26-
I understand your anger, but as a proud member of the legal community, let us not forget that the lawyers behind the A-holes deserve at least as much blame. It's a lot easier to screw up the whole financial system once your lawyer figures out how you can write a loan to a dead person, sell it into a pooling agreement and collateralize it to be sold off on the Irish stock exchange. I take offense when you say that it's all the Ibankers faults. Keep in mind that "Wall Street" includes a lot of shady f*ckers at law firms with a J.D. on top of that MBA.
Thanks for listening, and I'm sure that I speak for structured finance lawyers everywhere when I say, I'm sorry.
Posted by guest , Jul 13, 2008 6:47PM
Less than 14 months ago Goldman Sachs and Morgan Stanley underwrote a $500 million preferred equity offering from Indy Mac.
Anyone know the legal ramifications to the brilliant due diligence from these self styled masters of the universe who shoveled shit to investors only to see it go to $0 in under 14 months?
85 Broad, any comments?
Posted by guest , Jul 13, 2008 8:15PM
5:45 and 6:47, you both make compelling arguments. Perhaps Shakespeare said it best when he said "let's begin by killing all the lawyers". Most Americans would agree, a good starting point. Surely, a lot of IB's get thrown into that pot as well. But I would like to go back to the guest who properly fingered the media's complicity here - specifically the on airhead editor at CNBC - one Gasbagarumor. Since hiring this street punk, they have continued to spiral downward. I agree with the commentor who said this guy couldn't break a window with a bulldozer let alone break news. Saw a commentor predict that he would get cut loose this week. We can only hope. Then we can go after the IB's, the attorneys and so on.
Posted by guest , Jul 13, 2008 9:32PM
a timely clip to remind us what the mood during bank runs can be like:
http://www.youtube.com/watch?v=MJJN9qwhkkE
"old man potter's giving 50 cents on the dollar"
Posted by StMarc , Jul 13, 2008 10:42PM
8:15 - The Shakespearean character who wants to off all the lawyers is plotting to overthrow the government and he views lawyers and the legal system as the biggest obstacle to his plan. People use that line all the time and, while its sentiment is universal, it doesn't mean what they think it means.
That being said, yeah, as I pointed out earlier and 5:45 said so eloquently, lawyers make it possible for these idiots to do these things by finding ways around the laws that are supposed to stop them from doing them. Guilty as charged.
In my defense, I personally am a corporate lawyer and I spend most of my time drafting contracts and license agreements to make both parties honest money.
M
Posted by guest , Jul 14, 2008 1:35AM
"Real Bank Failures of the O.C." episode 2.
Posted by guest , Jul 14, 2008 3:46AM
5:45 here ...
I unfortunately am not. As opposed to the (and i'm not being sarcastic when I say) generally-honest corporate contract lawyers, none of us in the structured finance arena really did any good. 2 years ago I tried to explain to some colleagues how there would be no good end to all of this and he tried to assure me that these mechanisms were positive for the economy because they were creating liquidity. Which I guess this finance mechanism did, but only through spreading the risk to all parties and increasing leverage. As we now can see, those side effects clearly weren't worth it.
The real problem, is that for the most part, none of these people will be held accountable, nor will the banks that pushed these mechanisms. It's very difficult to shift the liability for, say, a predatory lending case, up the chain from the originator, through the pooling agreement and to the CDO originator and issuer.
As far as the "due diligence" question goes. I'm not in that area, but I believe the standard would be scienter. Which is fairly difficult to prove. Not quite "knowing" but almost. So they would have to prove that Goldman, for example, knew the reality and pushed the product knowing that it would cause defaults/losses. Or that they purposefully disseminated false information. I think you may start to see some malpractice claims as instruments default and it starts to show that some law firms were churning and burning so quickly that (a) parties were listed in contracts that weren't actually parties to deals, or (b) money was supposed to be in accounts that didn't actually exist, but proving complicity in a scheme here, I just don't see as realistic.
Posted by guest , Jul 14, 2008 4:50AM
@3:46AM
On your point of scienter. Isn't the SEC's case against Cioffi and Tannin based on this very point? They alleged Cioffi and Tannin marketed and sold the Bear funds knowing full well they were experiencing losses.
I think there are going to be numerous suits against banks that told the markets they were in a strong financial position and then does a capital raising a month later to shore up their balance sheets. This amounts to misleading and deceptive conduct.
It's not a good time to be on the Board of Directors of a bank.
Posted by guest , Jul 14, 2008 4:57AM
Have you guys seen pictures of Hank Paulson when he made his speech on the steps of the White House?
He was all alone. There was nobody (not even his staff) behind him giving him support in this difficult moment.
Posted by guest , Jul 14, 2008 7:07AM
Dude, nobody should be pissed off. Just go and short the shit out of every financial stock there is.
So clearly I, and most of you, missed BSC, but there is tremendous downside still in LEH, FNM, FRE, MS, MER.
Everybody get a hold of Dick Bove's report he published over the weekend of banks likely to go under and go out and short them all. I started shorting LEH at the 32 level and I feel pretty baller here. For the smaller no name banks, look at Bove's report, seriously. That's the only way we all can make some hay out of this shit-storm...
And then we can all find ways to justify shorting these suckers. Much like they jsutified makign structured products as a way to enhance liquidity, we shorters are bringers of price transparency, efficiency and bubble deflation.
John Paulson of Paulson & Co. is my homeboy and my hero in life.
and once we make the money, we can let the lawyers live. after all, there's got to be somebody left to sue these investment banker suckers...
-SHORT SHORT SHORT!
Posted by guest , Jul 14, 2008 7:16AM
I agree with guest @7:07.
While I dont' have a brokerage account to follow his advice, my two cents on the situation at Lehman is this:
the cause of the huge decline in Lehman's stock price is not necessarily or only Einhorn. It is thousands of people, investors, hedge-funds, small & big traders shorting Lehman because they missed out on shorting Bear. Because they see that indeed a bank can go under, they are all cumming over themselves in anticipation that at least one more bank can fall. Because they missed the party with Bear, they want to make sure that they don't miss it with Lehman. And frankly, it is quite a no-brainer, easy bet. That is why Lehman is more volatile than even Bear was before it went under.
The week is just starting. Rolling out of my bed for another week. you guys have been active all weeekend.
Posted by guest , Jul 14, 2008 7:56AM
guest@7:07am,
Please answer a question for me:
Another poster wrote, "Someone is always on the other side of a trade". If everyone is shorting LEH as you suggest, then who the hell is going long on LEH at current prices?
Something doesn't make sense. Please advise.
Posted by guest , Jul 14, 2008 10:09AM
hey asshole @7:56
Weren't there people going long on BSC the morning it opened at $2.83 after JPM announced the $2 / share takeover?
Posted by guest , Jul 14, 2008 10:28AM
Hey Asshole @10:09am,
Those people who went long on Bear at $2.83 got rewarded a week later at $10.50, didn't they? Were you shorting Bear at $2.83? Bear happened quickly. Please answer about LEH. Thanks.
Posted by guest , Jul 14, 2008 11:13AM
the people on this board are mostly full of bovine patties.
ANY person on this board who works at at any registered firm with a code of ethics isn't shorting any financial stocks.
period.
perhaps there are some independent day traders here, but what, like 3% of the people who post here?
and if you're a trader for for an investment partnership, you're not posting on dealbreaker during business hours exposing positions to the public.
cow dungers!