I Would Withdraw My Money Too Once The Feds Roll In
The panic over IndyMac continues:
As thousands of customers waited hours in the heat Monday to withdraw deposits from failed IndyMac Bank, investors dumped the stocks of many mortgage lenders, precipitating the steepest one-day decline in banking shares since 1989.
Southern California fixtures Downey Financial Corp. and FirstFed Financial Corp., specialists in the nontraditional mortgages that fueled the housing boom, were among the hardest hit, with their stock prices down 24% and 19% respectively. Shares of Washington Mutual Inc., the biggest savings and loan, fell nearly 35%.
Keefe, Bruyette & Woods bank analyst Frederick Cannon said one big fear for the banks was that depositors, seeing what was happening on Wall Street, would begin to pull their funds out. That, he said, could create risks for even a reasonably healthy bank in a hurry.
Branches of Pasadena-based IndyMac, which federal regulators seized late Friday, were thronged by customers, many of them elderly, seeking to withdraw deposits, even though most were fully insured by the Federal Deposit Insurance Corp.
Heck, the second I heard (or even sniffed) that a federal agency was taking over any bank I had funds deposited it, I would rush down there and withdraw my money too! This is the government we are talking about here. You know, the same institution that violates the Constitution on a daily basis and then crashes the programs which it instituted (Social Security, Medicare, etc.) by violating the Constitution?
Yeah, get you money and run!
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