IndyMac (IDMC) First of Many Banks to Fail
Today's Financial News - Posted July 15, 2008
“Don’t let the name ‘regional banks’ fool you. We’re talking about some of the biggest banks in the US. The reality is that regardless of how much money the U.S. government pumps into Freddie and Fannie, the U.S. financial system is in big trouble.” — John Stepek
Blogger’s note: The Fed may have decided that Fannie and Freddie are too large to collapse, but it didn’t bother rushing to the aid of regional bank IndyMac when it crashed last week. And the collapse of this California mortgage lender is a sign of things to come. John Stepek of the UK’s MoneyWeek had an interesting perspective on the current U.S. banking crisis that I thought you’d appreciate. You can find the article here or read on for more.
by John Stepek
Baltimore – (TFN): U.S. mortgage giants Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE) have been deemed too big to fail.
But investors are only too aware that not every bank or lender is in the same lucky position. The Federal Reserve didn’t step in to save IndyMac (IDMC 
ink Sheets), a Californian lender which was taken over by the Federal Deposit Insurance Corporation (FDIC, roughly the equivalent of our Financial Services Compensation Scheme) at the end of last week.
That’s focused attention on which regional bank could be next to fail, which in turn sent U.S. banking stocks tumbling yesterday. But don’t let the name ‘regional banks’ fool you. We’re talking about some of the biggest banks in the US.
The reality is that regardless of how much money the U.S. government pumps into Freddie and Fannie, the U.S. financial system is in big trouble – and the sooner they face up to it, the better… Read on to learn why.
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