Above is a picture taken outside the Laguna Woods branch of IndyMac Bancorp yesterday. Obviously plenty of retiress and others have more than the $100,000 limit of FDIC insured deposits on deposit. If you're an American and you've got more than 100k in one bank, you should be looking to spread it around.
Now to the more important question, who's next? From today's market action I'd suggest it could be Washington Mutual.
WaMu Says It's `Well Capitalized' After Share Slump
Washington Mutual Inc., after dropping the most since its initial public offering in 1983, said it is ``well capitalized'' with more than $40 billion in liquidity and $150 billion in retail deposits.
The company's tangible equity to tangible assets ratio is 7.8 percent as of June 30, Seattle-based Washington Mutual said in a Business Wire statement after the close of regular trading. Details will be provided on its July 22 earnings call, the company said.
Washington Mutual led a slide in home lenders after IndyMac Bancorp Inc. was taken over last week in the second-biggest seizure of a financial company by U.S. regulators. Lehman Brothers Holdings Inc. predicted today that Washington Mutual's cumulative losses this year will reach $26 billion as the mortgage crisis worsens.
Washington Mutual rose 10 percent to $3.54 in extended trading after tumbling 35 percent at 4 p.m. on the New York Stock Exchange. The shares have lost 76 percent of their value this year, the second-biggest decline in the 24-member KBW Bank Index. National City Corp. has dropped 77 percent.
What a relief, WM is well capitalized, So I guess that -34% decline in the stock price today was an over- reaction. But wait a minute, wasn't IndyMac well capitalized? How about Fannie Mae and Freddie Mac? As I remember it Countrywide and Bear Stearns were well capitalized too. Let's rewind to August 2nd last year and see what Countrywide had to say:
"Our mortgage company has significant short-term funding liquidity cushions and is supplemented by the ample liquidity sources of our bank," Sieracki continued. "In fact, we have almost $50 billion of highly-reliable short-term funding liquidity available as a cushion today. It is important to note that the Company has experienced no disruption in financing its ongoing daily operations, including placement of commercial paper.
"Countrywide's financial condition remains strong, as evidenced by over $14 billion of net worth, significant excess capital and our strong investment grade credit ratings," Sieracki concluded. "Two independent credit rating agencies, Moody's Investors Service and Standard & Poor's Rating Service, this week re-affirmed their ratings and stable outlook for Countrywide, its bank and its mortgage company."
As we now know, if it wasn't for Bank of America, CFC would have filed for bankruptcy months ago. The long and the short of it is that you can't believe anything that the management of these large financial institutions say. Fear is rife and a bank run on any institution could spell disaster.