IndyMac Raises Fear of 2nd U.S. Mortgage Crisis
JULY 14, 2008 08:11
The U.S. Federal Deposit Insurance Corporation has suspended service at IndyMac Bank, one of the largest U.S. mortgage originators, after a bank run from depositors.
The stock prices of two leading mortgage companies, Fannie Mae and Freddie Mac, are dropping every day, sounding an alarm bell to mortgage issuers who play a key role in the housing market.
Banking service at IndyMac was suspended after the bank ran out of cash due to mass withdrawals by scared customers. [...]
The bank runs I warned you about
have begun. Have you heard about this in the mainstream media?
No. Short blurb if anything.
But the government still says we are not bad off. That is because they keep changing the way the data is calculated - to mask the horror. Look here
for some interesting charts.
What this all means is that when the Fed raises interest rates again (to stave off inflation), expect a 1930s style depression to take hold.
On the hopeful side, this is just another, albeit drastic, market correction. Forests can't grow new trees until the deadwood is cleared. Recall that after The Great Depression, the USA had some of the most prosperous periods in its history.
Hard times ahead, folks. Think carefully where you are putting your money. I will be be buying bonds
and precious metals
when I get the cash. A little here, a little there. Word is August is a good time to get into bonds.