Wednesday, July 16, 2008

This is Happening in 2008?

The L.A. Times is doing a good job covering the customer panic around the IndyMac bank failure. I'd like yo assume that it is going to be sorted out soon but it's a mess for now.

"The Federal Deposit Insurance Corp. took over Pasadena-based IndyMac late Friday and has assured depositors that accounts with $100,000 held in a single name or $250,000 in a retirement account are safe. But many customers have said that when they checked their balances online, tens of thousands of dollars appeared to be missing. And when they went to branches in search of answers, they encountered lines hundreds of people deep and unhelpful staff members. On Tuesday, reports of unruly crowds brought police to branches in Encino and Northridge, although there were no arrests or injuries.

Noelle Gabay of Northridge, a budget analyst for the state of California, said FDIC officials acknowledged that she was owed $213,500 but provided her access only to $99,000. "My trust in the FDIC is gone," said Gabay, 49. "The question is now, where do we put our money? Do we buy a bigger mattress?""

No arrests or injuries. Oh good. U.S. Banks have done decades of work convincing the public that their money is safe. All that is at risk of unwinding very quickly.

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