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.

Jim Cramer is Way Out on a Limb

Jim Cramer is probably crazy by some definition. I'm not even sure that my saying that would raise many eyebrows.

His position on U.S. banks' prospects today is so non-consensus that he is either dead on or may never live this down.

On RealMoney, theStreet.com's paid subscription site, he wrote the following:

"Is this the beginning of the worst run on financials we have ever seen in this country, or at least since the Great Depression?

Right now, what it looks like has to happen is either a.) the government has to seize most of the banks, or. b.) the government looks the other way and establishes temporary rules to avoid massive defaults. The government can do this; it can say, "From now on until the mortgage crisis is past, we are not going to close you for being short capital. When the crisis is past, we will."
Without this forbearance I see no hope for virtually every bank that has mortgage exposure from 2005 to 2007. "

Hopefully the truth is somewhere in between. Either way, now is not a good time to have more than $100,000 in a bank.

4th of July

Happy 4th. Enjoy the long weekend with the market closed today.

UBS today announced that June quarter results will be close to break even, better than the large loss analysts were expecting. The stock traded up 8% after having declined 50% YTD. UBS will not need to raise new money now despite furhter write-downs according to today's report, but no details on this quarter's write-downs were given.

Meanwhile, Goldman Sachs opined today that European banks will need to raise an additional 60 - 90 billion Euros.

I don't think we're going to know where the end of this road is until we get there.

Federer, Nadal, Williams and Williams. They are all playing so well there was zero drama at Wimbledon this year.

I can't believe the Tour de France starts this week. Time flies.