[quote author="graphrix" date=1214557511]<a href="http://online.wsj.com/article/SB121450668689407987.html">Senator Schumer wrote some letters today, that may be the reason for the late day tanking of IMB</a>.
<em>Sen. Charles Schumer sent letters to federal regulators asking them to monitor more closely the financial health of IndyMac Bancorp Inc., a mortgage lender and thrift operator based in Pasadena, Calif.
The New York Democrat wrote that he is "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."
The letters, drafts of which were viewed by The Wall Street Journal, were sent Tuesday to the Federal Deposit Insurance Corp. and the Office of Thrift Supervision, which regulate IndyMac, as well as to the Federal Housing Finance Board. The finance board regulates the 12 regional federal home loan banks, which are owned by banks and thrifts but chartered by Congress. Because of their congressional charter and role in providing funds for home loans, investors assume that the government would stand behind the home loan banks in a crisis.
IndyMac had $10.4 billion of loans, or "advances," from the Federal Home Loan Bank of San Francisco at the end of the first quarter. Such loans are backed by collateral, typically mortgage loans. Sen. Schumer's letter asked the bank and finance board whether the credit and collateral terms for IndyMac "accurately reflect the associated risks." He also asked whether the San Francisco bank plans "actions to mitigate the risks of its exposure to IndyMac."
Sen. Schumer also said it is "troubling" that deposits placed by brokers account for about 37% of IndyMac's total deposits. Brokered deposits are considered more susceptible to sudden withdrawals.</em>
I am not saying they are not toast, but this is why they had a drop in share price.</blockquote>
My question is, who wants to pick up IMB's assets for pennies on the dollar, and was Sen. Schumer visited by their lobbyist? Does someone want to absorb IMB and The Fed to back the assets? Hmm... As the senior senator from New York, he had to know what such a letter would do, especially by naming the bank in question.
