Democrats at work... Caution!

parados wrote:

Finn dAbuzz wrote:

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

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.

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...

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.

Yes, and probably it was Karl Rove that fabricated all the lies about WMD too.

Karl Rove I am sure is probably behind the oil speculators as well, driving the price to what it is now.

Karl Rove likely caused the housing crisis as well.

Karl Rove probably is behind the secret plot of 911 too, and the airplane thing was totally staged to make it look like Osama Bin Laden.

"The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors' demands in the normal course of business and is therefore in an unsafe and unsound condition. 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. The letter expressed concerns about IndyMac's viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said. "Although this institution was already in distress, I am troubled by any interference in the regulatory process."

Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?A suspicious person might think that a network of lefty attack groups proficient in bank bashing and frequently funded by trial lawyers and short-sellers, coordinated their activities with a law firm on the hunt and a Senator who works closely with the network.

On the other hand, maybe it is a coincidence that CRL and Sen. Schumer attacked the same bank in the same week. Maybe he didn't know about the CRL report, nor CRL about his letter. Maybe the community group didn't know about the trial-lawyer class action lawsuit which was launched against Indy a couple of weeks before all of this started.

Yeah, right.

CHRIS CUOMO: People are so desperate in markets right now that negative information that allows them to short-sell or bet on banks not doing well is very popular.

MELLODY HOBSON: So I'm suspect about where the lists are coming from; the motives of some of the people putting the lists out here.

CUOMO: We saw the impact of panic not just on people but even in Congress, right? A senator gets up and says "I've heard something about a certain bank." It's in trouble the next day.

The $4 Billion Senator
July 15, 2008; Page A18
The federal takeover of IndyMac Bank over the weekend could cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion. But Senator Chuck Schumer, who helped to precipitate the collapse by publicizing a letter to the bank's regulator last month, has no remorse.

He was, he says, just doing his job in telling regulators that the bank "could face a collapse," a prophecy that quickly proved to be self-fulfilling. "It's what legislators are supposed to do," the New York Democrat told the Journal. Depositors who spent Monday trying to recover some of their money might beg to differ.

The Office of Thrift Supervision (OTS), whose job it actually was to regulate IndyMac, took a different view. "The immediate cause of the closing," the OTS wrote in a press release, "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." The OTS added: "In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts."

Mr. Schumer now argues that OTS was asleep at the switch, and that blaming him is like blaming "the fire on the guy who called 911." In fact, it's blaming the guy who poured on the gasoline. Very few banks, if any, would remain standing for long in the current tense financial environment after a Senator, in effect, told its depositors to run for the exits. In the 1930s, such tipsters were derided as rumormongers and often faced indictment for encouraging depositors to stampede banks.

Only last week, the Securities and Exchange Commission announced an investigation into the role of rumor-peddlers in the run on Bear Stearns. We somehow doubt that Mr. Schumer will receive similar SEC scrutiny for his very similar role in bringing about a liquidity crisis at IndyMac. But he may be more deserving.

Last week, Mr. Schumer's Senate colleague Chris Dodd took the spotlight to insist that everything was fine, just fine, at Fannie Mae and Freddie Mac. For how that turned out, see here. In its own way, Mr. Dodd's declaration was as irresponsible as Mr. Schumer's, given that its goal was to protect the companies from greater regulatory scrutiny of the kind long proposed by the Bush Administration.

Of course, it is much easier to talk a bank out of existence, as Mr. Schumer has now done, than to talk Fannie and Freddie into solvency. And no one is pretending that IndyMac was untroubled before Mr. Schumer wrote his letter. The bank had suffered heavy losses in its mortgage portfolio and was openly seeking new private capital to shore up its balance sheet.

But Mr. Schumer was not content merely to share his profound concern with regulators. He also leaked the June 26 letter to the press - which is more like shouting "fire" in a crowded bank than dialing 911.

I don't suppose that it's a possibility, that Schumer was in fact correct, and it was the OTS that wasn't doing their job? And that the bank was not exactly being up front with the fact that they had no money?

Nah.

I don't care that the bank failed. Let me repeat just so that it's clear: I don't care that the bank failed. They made a bunch of stupid ass investments and wasted the money of their depositors. The fact that they didn't have the money to cover, when people came looking, was entirely their own fault, and none of Schumer's, whatsoever.

Why didn't the bank have the depositor's money? Because of poor investments. If you aren't a fan of the government bailing out banks and investment houses - and all you Republicans who scream 'OMG SOCIALISM' at every Dem candidate for office should be pissed at what has been happening lately - then you shouldn't really have a problem with this.

Some will complain of customers who have lost money, but hey - I've known about the FDIC rules since my very first bank account. They've nobody to blame either.

A certain amount of bank failure is the inevitable result of the crisis we face; pointing fingers at Schumer is ridiculous and blatantly partisan, nothing more.

Cycloptichorn

Oh, I am not averse to any sort of Congressional investigation; and I highly doubt Schumer is either. And why would he be? Such investigations are notorious for resulting in very little actual punishment. Just ask your candidate for President.

Cycloptichorn

Oh, I am not averse to any sort of Congressional investigation; and I highly doubt Schumer is either. And why would he be? Such investigations are notorious for resulting in very little actual punishment. Just ask your candidate for President.

Cycloptichorn

Nah, it was pretty clever

If you say so, but self-congratulations tends to be universally unseemly in sophisticated crowds.

You keep on railing on this issue, and nothing will keep on happening about it, and everything will go on just as before.

Oh I know it will because Chuckie, like Chris Dodd is a member of the congressional majority. Nothing will happen and I never imagined it might, but its pretty telling that you are gleeful with the practice of utterly amoral partisan politics.

You're going to really enjoy the next few years, politically, I bet

Counting your chickens before they hatch is also considered unseemly in a sophisticated crowd, but hey, why should you care? You are situationally pretentious.

I'm reconciled to a Democratic controlled congress in 2009, and if Obama wins the Executive branch then despite my dispair, there's nothing much I can do about it. I will rely on his unbound Clintonian ambition for a second term to govern his leftist tendencies (and chortle at the Obama family battles on ideology) and yet have great fun pointing out to all of of you Obamaniacs his each and every mistake.

For the past eight years you and your fellow gadflies have been free to rip away, rationally and irrationally, at the Bush Administration. It will, indeed, be enjoyable to witness you madly spin the gaffes and missteps of your Messiah.

Ultimately, I will not enjoy an Obama presidency and Democratic held congress because there is little doubt that they will rob me to pay off the under-achievers who vote for them based on a promise to redistribute wealth.

Never-the-less, one has to find one's enjoyment where one can and I will find it it pinning your ears back on every ridiculous Carteresque move Obama makes.
Cycloptichorn

Well, while keeping you amused is important, it will be secondary to actually passing some legislation and appointing a few supreme court justices. My guess is that we can get a lot done in the next 2 to 4 years.

I shudder to think.

I don't believe Chuck Schumer did anything wrong;

Wow, that's a surprise!

I think both you and the regulatory agency are looking to play politics with what amounts to a failed bank. Looking to blame anyone but the idiots who ran it.

Many of your thoughts are flawed and so this one is no suprise.


You right-wingers decry socialism, but you believe in socialistic behavior towards big business: buyouts and protection.

We "right-wingers" don't all believe that the government should bail out firms like Bears Sterns, but there was no, in case you missed it, governmental bail out of Indy Mac.

Did you ever provide evidence that Schumer leaked the letter? I didn't pay attention to every page of this topic, so maybe I missed it.

It's tough to describe the release of a letter you wrote as a "leak," but he did. Pay attention.

Cycloptichorn