Democrats at work... Caution!

In a way, he yelled FIRE in a movie theatre and caused panic that might not have been necessary.

He was not wrong in pointing this out to regulators, his error was going public too soon.

Did Schumer release that letter? Or was it leaked by someone else?

One would think the answer to that question would be important to know before casting aspersions.

Cycloptichorn

He's been yapping about it on TV for days.

Regulators to Schumer on IndyMac: Please shut up

5:47 PM, July 2, 2008

Sen. Charles E. Schumer publicly taunted bank regulators last week about IndyMac Bancorp's financial condition, which helped trigger a sudden outflow of deposits from the Pasadena thrift. Now the New York Democrat is getting some harsh blowback from one current and one former regulator.

Their message, distilled: Zip it, Chuck.

As noted here on Monday, Schumer sent letters to the Office of Thrift Supervision, the Federal Deposit Insurance Corp. and the Federal Home Loan Bank of San Francisco, saying he was "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers."

IndyMac, which has suffered huge losses on defaulted mortgage loans, "could face a failure if prescriptive measures are not taken quickly," Schumer wrote.

Uh, wait a minute -- how could Schumer know that? And since when are regulators supposed to tell the public in advance that a particular institution has been earmarked for possible failure? All that would do is guarantee a collapse. If depositors are within FDIC insurance limits they have nothing to worry about, anyway.

That pretty much sums up the content of a letter to Schumer today from John M. Reich, director of the Office of Thrift Supervision.

"As a regulator of insured depository institutions, we do not publicly comment on the financial condition or supervisory activities related to open and operating institutions," Reich wrote. "We believe it is critically important to maintain the confidentiality of examination and supervision information."

He went on: "Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades. Rumors and innuendo cause damage to financial institutions that might not occur otherwise and these concerns drive our strict policy of privacy."

John D. Hawke, the U.S. comptroller of the currency (regulator of national banks) from 1998 to 2004, had more pointed words for Schumer in a story in the American Banker newspaper today.

"If Schumer continues to go public with letters raising questions about the condition of individual institutions, he will cause havoc in the banking system," Hawke said.

"Leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don't see how he can be trusted with confidential information in the future. What this incredibly stupid conduct does is put at risk the willingness of regulators to share any information with the [congressional] oversight committees. After this, you'd be crazy to share information with Schumer."

The senator's office didn't respond to a request for comment today. On Monday, Schumer aide Brian Fallon offered this explanation for Schumer's action: "The home loan bank system has an obligation to lend responsibly and police its members. But it has not been doing its job. We have found the only way to get the home loan bank system to act appropriately and positively is to make public the concerns we've already expressed privately."

If that's Schumer's policy on the U.S. financial system's troubles overall, it's going to be a long, hot summer.

Re: Democrats at work... Caution!


The title is hysterical ... Democrats working ... what a hoot!

That's yet another artifact of demoKKKrats at work, i.e. forcing banks to make housing loans to homeless people, illegal aliens, cats, dogs, rabbits, squirrels, and woodchucks.

I was looking at one such house across the street from where friends live in D.C suburban Maryland last weekend which they're trying to auction off for $50K or thereabouts and the final mortgage on the house had been just under 400 and it's hard to tell where to start in describing it.

This is a house the Adams family might be happy with but most people would view it as a doghouse made in the 1940s or 50s with an upstairs added on fifteen or twenty years later which would need to be totally redone before any normal person would be happy with it. The kicker is this: the original mortgage as of 12 years ago or thereabouts was more like 200 and there was a second mortgage of about another 200 and in fairytales maybe some of that second 200K might have been used to rehab the house, but there is no evidence of that. The last owner simply took the 200 back to Tiajuana or wherever he came from and presumably is living the good life down there with the banks (i.e. yours and my) money.

DemoKKKrats at work.

Other important work they are now doing to solve the energy problem and high gas prices is to go after the "speculators." Will it be grain futures next? Then the stock market investors?

To increase oil production, another one of their ideas is to tax the oil companies more and to continue to restrict the areas to drill. Also, they propose the companies drill leases that are less prospective, otherwise give them up. The thinking is that oil companies are intentionally sitting on billions of barrels of oil on existing leases, so we will force those dastardly companies to do something, or else, after all the lawyers in Washington know more about oil than the experts. Either drill more dry holes or quit paying the government their lease monies, that will help alot.

If ANWR was opened to drilling, production could be 1 to 1.5 million barrels per day, but instead the Dems solution is to produce 70,000 barrels per day, or 7% or less of what ANWR would produce and for a very short time, out of the strategic reserve - because the Dems think that would make an impact, but ANWR would not. I guess they took no math in school?

What next will they tackle to show their genius and brilliant solutions?

Prior to the public release of Schumer's letter.

In Sept of 07. IndyMac debt rating had been downgraded to junk status by Moodys
In Dec of 07 S&P downgraded IndyMac's debt rating to junk status
In Feb of 08 Fitch downgraded IndyMac's debt rating to junk status

On June 24th Moody had this to say about IndyMac.
(Basically Moody's was saying IndyMac was going broke.)

Several firms had downgraded IndyMac stock to junk status in June

IndyMac share prices had dropped from over $10 in Jan to less than $2 before June 26th.

Anyone that was paying attention would have seen the writing on the wall. IndyMac was in trouble.

Where was Harry Reid when we needed him? He should have stopped the speculators from driving the price of Indymac up over what it was really worth.

Was Schumer trying to manipulate the market to the benefit of powerful financial supporters?

I think we need a congressional investigation! Henry Waxman, where are you when we need you?

Fortunately for Schumer he has immunity from any civil action brought by investors in the institution he helped bring down, but it would be a fitting consequence

Again:



I still haven't seen any evidence presented that Schumer leaked a letter to anyone. I'm not saying this evidence doesn't exist, but I have yet to see it produced or even reported on.

Cycloptichorn

Waxman to investigate Schumer? Not a chance. He only investigates people that he doesn't like, not his buddies.

IndyMac stock was under $2 when the letter was released. Anyone that owned the stock wasn't making money. Anyone that shorted the stock at $10 was only making about another 5% on the drop after the letter. There wasn't a lot of money made or lost from the time the Shumer letter was released until the stock failed.

politico- mcain-gramm - deregulation

"Bill Clinton's drive to increase homeownership went way too far"

"Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It's clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place."

http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html

LOL.. A plan Clinton put in place 14 years ago that required oversight is the reason for the housing bubble.

When all else fails, okie can find some reason to blame Clinton. "Personal responsibility" seems to only go as far as naming Clinton as the reason for every failure in the US.

Thats true.
The key is PERSONAL RESPONSIBILITY.
Its good to see you admit that.
If a person couldnt afford the payments, they shouldnt have bought the house.

The govt should NOT be interfering at all, not even to rescue the banks that are going under for making the loans.

And the banks should not have loaned them the money, which is what the article was all about, Clinton administration ratcheting up pressure on banks to loan to people not qualified, just get them into a house. Bush administration I think continued the same policy.

To Parados, I am not blaming Clinton altogether, but the article has evidence it was also involved in things that helped bring about the situation we have today.

Obviously you don't think Chuckie did anything wrong. Fine. Why can't we have a congressional investigation?

Afterall, even though we have learned the leak of Valerie Plamme's CIA status came from Richard Armitage, congress still wants to investigate Karl Rove for it.

If they can investigate someone after the real culpret has been revealed, surely they can investigate someone who many people (albeit not you and Cyclo) think was up to stupidity or no good.

Good for the goose...