Siyonara Indymac

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Nobody should have a 5M CD with any bank. If you have that kind of money, it should be mostly in brokerage or custodial accounts, invested. Vanguard would be a far better choice than IndyMac.
 
[quote author="FairEconomist" date=1216246804]Nobody should have a 5M CD with any bank. If you have that kind of money, it should be mostly in brokerage or custodial accounts, invested. Vanguard would be a far better choice than IndyMac.</blockquote>


Hard to believe a story that someone who could accumulate $5M would just slap it into a CD at a single institution. Even if I wanted to keep it liquid, it would with a professional wealth manager, who would be laddering CD investments like crazy across many many institutions...
 
[quote author="ipoplaya" date=1216251325][quote author="FairEconomist" date=1216246804]Nobody should have a 5M CD with any bank. If you have that kind of money, it should be mostly in brokerage or custodial accounts, invested. Vanguard would be a far better choice than IndyMac.</blockquote>


Hard to believe a story that someone who could accumulate $5M would just slap it into a CD at a single institution. Even if I wanted to keep it liquid, it would with a professional wealth manager, who would be laddering CD investments like crazy across many many institutions...</blockquote>




That?s not far-fetched at all.

In fact, it?s common.

We hire professional money managers to handle our portfolios, while we direct the ?cash? or liquid portion ourselves.

That?s what I do and know many others who do so as well.
 
[quote author="tenmagnet" date=1216255303][quote author="ipoplaya" date=1216251325][quote author="FairEconomist" date=1216246804]Nobody should have a 5M CD with any bank. If you have that kind of money, it should be mostly in brokerage or custodial accounts, invested. Vanguard would be a far better choice than IndyMac.</blockquote>


Hard to believe a story that someone who could accumulate $5M would just slap it into a CD at a <strong>single institution</strong>. Even if I wanted to keep it liquid, it would with a professional wealth manager, who would be laddering CD investments like crazy across many many institutions...</blockquote>




That?s not far-fetched at all.

In fact, it?s common.

We hire professional money managers to handle our portfolios, while we direct the ?cash? or liquid portion ourselves.

That?s what I do and know many others who do so as well.</blockquote>


If you direct that cash into a single institution, I'd have to say you were foolish, and I disagree that it is common... Once upon a time, I worked in the cash management group of a Fortune 500, and we managed a great deal of liquid capital on a daily basis. Mucho amounts of commerical paper mostly. We had those dollars at many institutions, for you Marshall boys I believe this would be referred to as risk management or risk mitigation, both domestic and overseas. Why put all your eggs into one basket either professionally or personally in terms of assets?
 
[quote author="Astute Observer" date=1216255739]How big of an account do you need to have to make hiring a money manager worthwhile?</blockquote>


Too many variables to consider when anwering such a question... Depends on your investment expertise, risk tolerance, how highly you value your time, etc. etc. Personally, I'd have to have a cool mil before I'd start thinking about some professional wealth management. For many, I'd say they should use one if they had a couple of hundred.
 
[quote author="ipoplaya" date=1216251325][quote author="FairEconomist" date=1216246804]Nobody should have a 5M CD with any bank. If you have that kind of money, it should be mostly in brokerage or custodial accounts, invested. Vanguard would be a far better choice than IndyMac.</blockquote>


Hard to believe a story that someone who could accumulate $5M would just slap it into a CD at a single institution. Even if I wanted to keep it liquid, it would with a professional wealth manager, who would be laddering CD investments like crazy across many many institutions...</blockquote>


This is what i've done. Unfortunatley its across 3 different banks with multiple accounts in each bank. Mostly big names. Although I'm VERY closely watching WAMU right now...(my wife convinced me ...)



good luck

-bix
 
[quote author="ipoplaya" date=1216255886]

If you direct that cash into a single institution, I'd have to say you were foolish, and I disagree that it is common... Once upon a time, I worked in the cash management group of a Fortune 500, and we managed a great deal of liquid capital on a daily basis. Mucho amounts of commerical paper mostly. We had those dollars at many institutions, for you Marshall boys I believe this would be referred to as risk management or risk mitigation, both domestic and overseas. Why put all your eggs into one basket either professionally or personally in terms of assets?</blockquote>


It?s more common than you think.

The IndyMac fiasco was a huge wake up call to many including myself.

Has nothing to do with risk management.

Time = $$$.

It?s easy to get complacent and keep more money in one institution.

It?s a pain opening accounts up all over town.



I?m doing that right now with my accounts at Citibank.

Always thought of Citibank as a global institution and never pictured them failing.

Hit the search key and you?ll see I had a MM at IndyMac (great yield).

I closed it in June and moved to Everbank.

It felt like hassle at the time, and I almost didn't want to bother.

Glad I did.
 
Why not put all your money into a brokerage like Schwab? You can buy hundreds of thousands or many millions of riskfree Treasuries or virtually riskfree municipal bonds or AAA bonds of diversified companies like GE or Berkshire Hathaway, or if you really like CDs, you can buy them in $100K increments from different banks very easily and have each $100K increment completely FDIC insured.
 
Well, after reading the SIPC link above, I guess in a worse case scenario like what happened to ETRADE and their ill-advised subprime investments, customers of brokers could have legitimate worries like customers of Indymac. Hard to see that happening with Schwab, although anything's possible. It's like Wells Fargo cruising along past the carcasses of Indymac and Countrywide.
 
<strong><span style="font-size: 15px;">Source: FBI investigating Indymac for fraud</span></strong>



<a href="http://www.cnn.com/2008/US/07/16/fbi.indymac/index.html">Say it ain't so....</a>



<em>In a written statement, the FBI didn't specifically comment on Indymac but noted that it is investigating 21 corporations in the subprime lending market for possible mortgage fraud.</em>
 
[quote author="stepping_up" date=1216344056]<a href="http://www.bankrate.com/brm/news/DrDon/20080717_insure_million_CD_a1.asp">How to invest $1M + in federally insured accounts</a></blockquote>
Personally, I wouldn't put more than $100k in one bank - no matter how you set up the accounts.
 
[quote author="CalGal" date=1216364793][quote author="stepping_up" date=1216344056]<a href="http://www.bankrate.com/brm/news/DrDon/20080717_insure_million_CD_a1.asp">How to invest $1M + in federally insured accounts</a></blockquote>
Personally, I wouldn't put more than $100k in one bank - no matter how you set up the accounts.</blockquote>


Why wouldn't you do a joint account for $200K with your hubby if it's insured?
 
[quote author="stepping_up" date=1216375290][quote author="CalGal" date=1216364793][quote author="stepping_up" date=1216344056]<a href="http://www.bankrate.com/brm/news/DrDon/20080717_insure_million_CD_a1.asp">How to invest $1M + in federally insured accounts</a></blockquote>
Personally, I wouldn't put more than $100k in one bank - no matter how you set up the accounts.</blockquote>


Why wouldn't you do a joint account for $200K with your hubby if it's insured?</blockquote>
I realize a joint account for $200k is FDIC insured, but it still makes me nervous.

I'm a nervous nelly though. :coolsmirk:
 
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