Recession or Depression? // Current

IndyMac Bank seized by Feds; 2nd-largest bank failure in US history

The federal government took control of Pasadena-based IndyMac Bank today, in what regulators called the second-largest bank failure in U.S. history.

The Office of Thrift Supervision in Washington, the chief regulator of IndyMac, said it transferred control of the $32-billion bank to the Federal Deposit Insurance Corp.

Regulators said depositors would have no access to banking services online and by telephone this weekend, but could continue to use ATMs, debit cards and checks. Online banking and phone banking services are to resume operations Monday.

Federal authorities said based on a preliminary analysis, the takeover of IndyMac would cost the FDIC between $4 billion and $8 billion.

ndyMac's failure had been widely expected in recent days, as regulators said it was not well-capitalized. Its stock has plummeted to mere pennies a share and some nervous depositors have been pulling their funds. The bank has been reeling from losses on defaulted mortgages made at the height of the housing boom.

"The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors' demands in the normal course of business and is therefore in an unsafe and unsound condition," the agency said in a statement today.

IndyMac's failure is second only to the 1984 failure of Continental Illinois Bank, which had assets of $40 billion at the time. The federal government took control of Pasadena-based IndyMac Bank today, in what regulators called the second-largest bank failure in... more

Ogmin

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1 hour ago

Exxon Mobil reports $11,000,000,000.00 in quarterly profits

Exxon Mobil reports $11,000,000,000.00 in quarterly profits, our 'pain' is their 'gain'. The actual headline read 'Exxon Mobile reports $11B in quarterly profits'. The (B) is used to hide the shame of all those zeros. While we struggle to make it to the next tank of gas, they are prospering. Seeing $11B makes it appear small, but the (B) stands for (000,000,000.00), that's a lot of zeros. Exxon Mobil is just one oil company making all those zero's.

Exxon Mobil Corp.'s first-quarter profit rose 17 percent from a year ago, as soaring crude oil prices helped the company reach its second-largest U.S. quarterly profit ever.

The Irving-based oil giant earned $10.89 billion, or $2.03 per share, for the quarter, compared with $9.28 billion, or $1.62 per share, a year ago.

Revenue jumped to $116.85 billion from $87.22 billion last year.

However, the company's results for the quarter missed analysts' expectations for earnings of $2.13 per share on revenue of $124 billion, according to Thomson Financial.

"Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," Exxon Mobil (NYSE: XOM) said.

The company spent $5.5 billion on capital and exploration projects, up 30 percent from $4.22 billion a year ago.

Exxon Mobil said earnings at its upstream, or exploration and production, business rose 45 percent to $8.79 billion, helped by higher crude oil and natural gas prices. Increased natural gas production was more than offset by lower crude oil volumes, the company said.

Earnings from its downstream, or refining and marketing, business fell 39 percent to $1.17 billion. The company said significantly lower worldwide refining margins decreased earnings by about $1 billion in the quarter, while improved refinery operations increased earnings about $350 million. Exxon Mobil reports $11,000,000,000.00 in quarterly profits, our 'pain' is their 'gain'. The actual headline read... more

Conniepae

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7 days ago

L.A. Land : Los Angeles Times : Disappearing now: $6 trillion in housing wealth

Disappearing now: $6 trillion in housing wealth

Washington think tank is warning that housing prices are falling at an accelerating level, destroying wealth at a pace that will cost the average homeowner $85,000 in lost wealth this year alone.

The projections by the Center for Economic and Policy Research are based on the numbers in Tuesday's Case-Shiller home price index, which showed accelerating price declines in most big cities.

The annual rate of price decline over the last quarter was 24.9% in the 20-city index and 25.8% in the 10-city index," the center said in its Housing Market Monitor today. "At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner."

I'm a so-so student of economic history, but I'd have to bet that, even adjusted for inflation, the only time that many Americans have lost that much wealth in a short period of time would have been during the Great Depression. I'm not even sure it happened during the Depression. (I understand: This hasn't happened yet; it's only a prediction.)

Repeating again: The CPER says prices are falling so rapidly that the bubble will be gone by the end of 2008, but the loss of housing wealth will be massive. Disappearing now: $6 trillion in housing wealth ... more