Video of Lines at IndyMac Bank

[schola]

Alex Jones' Infowars: There's a war on for your mind!

Looks like someone dropped the ball. If this is how they ran their bank, no wonder it went under.

[WanderingOak]

If you take the video at face value, then things do look bad. However, there are parts that look as if they were staged. The first woman that was interviewed acted as if she had trouble remembering her lines. I also noticed that a majority of the people 'in line' to get in the bank deliberately turned away from the camera. Finally, I became a bit suspicious when the anchorman began going off against the bank. It is almost as if the news station wanted people to overreact. I tried finding this broadcast on the KTLA5 website, but I couldn't get any video to load.

I really don't trust Alex Jones at all. He likes to get paranoiacs up in arms over various things. I remember him frothing at the mouth over 'armored troops' being spotted in midtown Manhattan last year. Of course, he didn't mention that they were in a Memorial Day parade down Fifth Avenue.

[schola]

Well I understand your skepticism but the video doesn't have anything to do with Alex Jones. It's an embedded video from the KTLA website.

KTLA.com

[ThoughtAddict]

The fear mongering does have a basis. If there are several more regional bank collapses in the year, the FDIC will be stretched to the point where they cannot prevent collapse. It would make current recession issues look like prosperity. If it happens under the current administration, I think the nation and government would be unable to rally to fix the damage and there would be serious economic hardship.

The problem is that this reporting provides self-fulfilling prophecies. Indymac would have survived without serious problems, except that a massive 1.3 billion in funds were withdrawn in a limited timeframe. Any regional bank facing such a run would have difficulty responding. Many would collapse under such pressure.

Congressman Schumer, whose actions largely prompted the run on Indymac, should be ashamed. There are proper ways to handle these issues. And yes, I do mean that silence may be proper. A small problem that could be handled cheaply and easily can become a big, hairy problem when people overreact. It reminds me of the beer game played in business schools...

[schola]

IndyMac was brought down by mismanagement and bad lending practices. A run would have occurred sooner or later as people realized the bank had no capital to back the numbers on a computer screen that represented their bank accounts.

The false debate in the media over what Schumer did is just a smoke screen to distract you from the real issues.

[Gabo]

No modern bank has funds to cover its deposits. It is the nature of fractional reserve banking to hold several times less cash than there are deposits.

All banks will close if there is a run on them. The reason it happened to Indymac was because people lost confidence in their lending practices and a run happened.

But it could happen to any bank at any time, as soon as people decide they don't trust the bank to hold their money any longer.

And if it happens enough, we have economic devastation.

[schola]

Gabo,

Most people don't understand fractional reserve banking or realize that the money they put into the bank isn't really "there."

They don't know that banks can create money out of nothing.

They don't know about the Rothschilds, the mega-rich banking family that controls most of Europe. Or the Rockefellers who control the United States.

They don't know that the bankers control the money supply of the entire world and that they hold true power over the governments.

They don't know that "debt" is a contrivance intended to enslave people.

They don't know that usury, the charging of interest on borrowed money, was considered illegal and immoral by almost every civilization in history.

If they did know these things I suspect that we'd see a lot more runs on these banks. Don't worry though, we will see a lot more banks collapse before this is all over with.

[ThoughtAddict]

Some of Indymac's directors were allegedly involved in fraud, and had done significant damage to the bank's finances. Had there not been a run, there would have been an indictment of the suspected directors. Depending on the severity of the financial problem, it could have resulted in a hiccup wherein federal money or creative financing were used to correct the bank's course.

The lending practices of Indymac, especially subprime, were of concern as they are to the entire nation. Had there not been a run, it is likely that the bank would have had hard times. As to the severity of the financial trouble, I'm not entirely aware. Perhaps the bank was insolvent as a result of their lending. But that requires the assumption that all their assets are mark to market at current valuation, an assumption currently being challenged in the federal government. At the very, very least, the run on the bank exacerbated the problem, stripping the bank of any means of survival and causing collapse. The result is a higher amount of federal money being used to solve the problem.

Yes, more banks will require federal receivership or federal assistance before the year is out. No, this doesn't mean the end of the world is upon us. And fear-mongering will only make the problem worse.

[schola]

ThoughtAddict,

Do you think the FBI would be investigating IndyMac if it their had not been a run and the FDIC hadn't taken over?

fear-mongering will only make the problem worse.

Positive thinking will do nothing to stop the current financial system from continuing to unravel. This has nothing to do with confidence. It's systemic.

[ThoughtAddict]

Originally Posted by schola

ThoughtAddict,

Do you think the FBI would be investigating IndyMac if it their had not been a run and the FDIC hadn't taken over?

As I said, there's fraud there. I'm sure the FBI had been investigating. That wasn't my point.

Positive thinking will do nothing to stop the current financial system from continuing to unravel. This has nothing to do with confidence. It's systemic.

Solvency occurs when there are more assets than liabilities. Lack of confidence for banks leads to less assets and greater liabilities, as well as significantly decreased income and inability to obtain private financing. It is absolutely tied in with confidence.

[Gabo]

Originally Posted by ThoughtAddict

Lack of confidence for banks leads to less assets and greater liabilities, as well as significantly decreased income and inability to obtain private financing. It is absolutely tied in with confidence.

I definitely agree with you. Bank stability depends entirely upon confidence.
That, in my opinion, is the horrific danger of fractional reserve banking.

At this stage I don't see people remaining calm and confident about their banks for very much longer. Most people have already lost a lot of confidence in the Fed, and the problem will only snowball as things get worse.

I can't imagine how much the government and media would have to lie to us to convince enough people that the country is still financially healthy.

[schola]

Originally Posted by ThoughtAddict

Solvency occurs when there are more assets than liabilities. Lack of confidence for banks leads to less assets and greater liabilities, as well as significantly decreased income and inability to obtain private financing. It is absolutely tied in with confidence.

The commercial and investment banks are just one piece of the entire wall that is currently crumbling.

[schola]

IndyMac Cashier's Checks Rejected

Banks "Holding" IndyMac Cashier Checks | News | News And Video | KTLA - Los Angeles CW Source | Covering Los Angeles News and Entertainment and showing the hottest LA Video | KTLA The CW | Where LA Lives

"LOS ANGELES -- The aggravation continues for some already frustrated IndyMac customers who are trying to deposit their money at other banks.

Nervous customers flooded Southern California IndyMac branches this week after the failing institution reopened under federal control as IndyMac Federal Bank, FSB. Some camped out overnight and waited for several hours just to retrieve their money.

Now, some of those customers say they're having difficulty depositing their IndyMac cashier checks.

Sheryl MacPhee said she waited in line two hours Tuesday at an IndyMac branch in San Marino to liquidate a certificate of deposit.

But when she took it to a Washington Mutual branch in South Pasadena to deposit, she said a manager told her their new policy was not to accept IndyMac checks."

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Fractional reserve banking is a scam.