Bad Real Estate Loans Cause IndyMac Bank To Be seized By FDIC
Worried customers lined up outside IndyMac to withdraw their money this morning. IndyMac was seized by federal investigators on Friday. The Federal Deposit Insurance Corp automatically insures customers with accounts worth $100,000 or less.
IndyMac is the fifth U.S. banking company to fail this year, and the largest since the 1980s savings-and-loan crisis.
Gerard Cassidy, an analyst at RBC Capital Markets, on Sunday estimated that 300 U.S. banks might fail over the next three years because of credit losses and tight capital markets.
Regulators expect the IndyMac takeover to cost the FDIC $4 billion to $8 billion.
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Now that IndyMac is the first of many banks to fail, I think we’re going to see a lot more banks, not only close for the weekend, but close for good and go bankrupt. Rumors talk about 90+ banks, I think that’s a little exaggerated, but very well possible. I would guesstimate around 30+ banks will close shop.
I’m an investor in the stock market and have started to build a position in Bank of America. One of the few 500 lb. gorillas left in the room. Every dip, I pick up more shares. I don’t think there going anywhere, but you never know. Investments are all risky.
I never thought I would see this happen here in the USA, but here we are….let’s all cross our fingers.
petes2cents.com