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Tuesday, July 15, 2008

Schumer's '911 call' led to IndyMac's bank run

Sen. Charles Schumer likens his role in the collapse of IndyMac Bancorp Inc. to a bearer of bad news.

Others have accused the New York Democrat of starting a run on the bank.

Regulators said Schumer’s letter, which he made public, lit the match that led to massive customer withdrawals.

Schumer counters this was a damaged bank and its management drove the California institution into the ground. True enough, but the senator’s words were the catalyst to put IndyMac six feet under.

He’s defended his actions, saying that he was doing his job as a Senate banking committee member. He blamed the Office of Thrift Supervision for being “asleep at the switch” and said the Bush administration was “blaming the fire on the person who called 911.”

Except most times when a person calls 911, he doesn’t then call the major newspapers to claim the credit for doing so. (And if he did, I’d be liking that guy as the firebug.)

I have no problem with Schumer’s writing a letter to the OTS, the Federal Deposit Insurance Corp. and two other agencies to express his concerns. But in publicly disclosing them, he crossed the line.

And if he doesn’t think so, then California Sens. Barbara Boxer and Dianne Feinstein should feel free to pick a New York bank and express their concerns over its financial condition.

Doesn’t sound like a good idea, does it? Because ultimately the health of our economy is based on the confidence we all have in it.

Bank runs remain one of the scariest things that can happen. One day, you’re glad your money’s safe in the bank. The next, you can’t wait to take it home and stuff it under your mattress.

Some banks are not going to make it through this ongoing credit crisis. And with quarterly financials being released by banks this week, we’re going to learn who’s hurting the most.

I’ll be hoping Chuck Schumer resists the urge to tell us which one he thinks is on the verge of collapse.
Posted by Mike Armstrong @ 3:05 AM  Permalink | 5 comments
Comments   
  • 0 like this / 0 don't   •   Posted 8:32 AM, 07/15/2008
    Deny, deny, deny, then blame Bush. Typical Democrat response.
    — MiddleNameHussein
  • Comment removed.
  • 0 like this / 0 don't   •   Posted 10:07 AM, 07/15/2008
    Typical Democratic response - blame Bush. As if these idiotic 'regulated' bank structure weren't alredy in place for the 3/4 of a century.
    — brew7676
  • 0 like this / 0 don't   •   Posted 2:09 AM, 07/17/2008
    New York Times reported that hedge fund managers have a new champion in their effort to keep legally dodging the taxes the rest of us pay: none other than New York Senator Charles Schumer. Now you know who is Schumer's friend and why he caused the bank run on Indymac. He truly support hedge fund and private equity because they truly support him. http://www.nytimes.com/2007/07/30/washington/30schumer.html?_r=1&oref=slogin "Large Investor decided to pay a few bucks to a Senator in New York to force the issue."(Prospect Mortgage Backed By Sterling Fund--Private Equity Acquired The Mortgage Branches from Indymac before FDIC takeover) http://www.housingwire.com/2008/07/03/regulators-to-schumer-weve-got-a-whole-bag-of-shhh-with-your-name-on-it/ "And do remember that there are many investment bankers located in New York, making them pretty influential constituents of Sen. Schumer." http://www.pasadenastarnews.com/opinions/ci_9783402 "In a Sunday news conference, he said everything in his letter was already known to the public." If it was already known to the public, what is the reason for his public letter? It is contradict to what he said previouly :"I just bring private message to the public. Do not kill the messanger." What a great liar from time to time! http://www.cnn.com/2008/POLITICS/07/13/indymac.schumer/?iref=mpstoryview Same thing he did for FRE and FNM, he forced FRE and FNM to buy $145 billion bad loans last September. So his hedge fund friend could short the stock, then his private equity friend could take huge discount to acquire the properties. So obvious criminal acts, but he is still out law and do whatever to harm the American and benefit himself and his friends.
    — makemoneyschumer
  • 0 like this / 0 don't   •   Posted 10:38 PM, 07/20/2008
    Schumer is a real idiot.
    — Mr Nick


5 comments
About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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