Liberty Reborn

An interesting angle about how someone with power can cause a panic:

An important angle in the IndyMac failure that may get lost in ominous headlines tonight and tomorrow: federal regulators pointedly cited U.S. Sen. Charles Schumer, D-N.Y., in explaining the bank’s failure. In simple language, federal regulators blamed Schumer for a run on the bank.

Here’s from the press release issued by IndyMac’s regulator, the Office of Thrift Supervision: “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 immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York. The letter expressed concerns about IndyMac’s viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.

“This institution failed today due to a liquidity crisis,” OTS Director John Reich said. “Although this institution was already in distress, I am troubled by any interference in the regulatory process.”

Schumer of course denies responsibility but he does not deny that the run on the bank was started by his letter nor that the run on the bank caused the collapse … so in essence he did not deny he was partially at fault.

I am not leaving IndyMac blameless. Any business has to have enough money available to cover its debts. They did not. And when you have liberals like Schumer running around poking the bear with a stick trying to goad it into action you had better be smart enough to have your ass covered.

This entry was posted on Friday, July 18th, 2008 at 2:07 pm and is filed under J.J. Jackson's Daily Opinion. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.