Quick, Find Someone To Blame!

This idea that Chuck Schumer is to blame for IndyMac's bank failure is totally ludicrous, as Hubris Sonic at GNB adequately explains.

Its fairly easy these days to google up all the news stories available about this sort of thing and google finance can put that information in context for you.



finance.google.com?q=NYSE:IMB

Clearly Schumer's statements had little or no effect. This bank was in freefall well before his statement on 6/26. There was a bit of a sell off, small compared to what had come before now, and nothing compared to when the bank itself announced it would issue no new loans, and fire half it's staff on 7/8. On the same day S&P changes their rating to complete JUNK.

On top of all this, while I know the market is sensitive and information flies around quickly, the idea that a letter from some Senator to regulators would send individual customers all across the country scurrying to their banks is completely dubious. It failed because... it failed. Its executives failed, the regulatory system failed, and this entire financial market is on the verge of failure. Nobody was checking to see if the folks receiving the loans could pay them. Chuck Schumer had nothing to do with it.

But of course, the party of personal responsibility wants to find a scapegoat, and hopefully a prominent Democrat, to justify even more profit-taking and risk socialization.