Because There's Nothing To Investigate

California won't look into Chuck Schumer's role in the IndyMac failure, because he didn't have one and the claim was put together by Swift Boaters. Good for Jerry Brown.

The California Report

Here are a few links for you.

• It's two days until the kickoff of Netroots Nation, and among the many luminaries attending will be Gavin Newsom, who is introducing green jobs expert Van Jones at the Sunday morning keynote. The fact that he's running for Governor has nothing to do with this, I'm sure.

• The final numbers on the June election were miserable, with a record low (for a regular election) 28.2% turnout. A ridiculous amount of voters cast ballots by mail - 58.7%, also a record. VBM is far stronger in Northern California than in the Los Angeles area, and not surprisingly turnout is higher up there as well. This is really changing how elections ought to be conducted, as we move to a VBM state. Campaign operatives need to understand this quickly.

• Hey, we had a bank run at IndyMac yesterday. Fun! The FDIC insures up to $100,000, so consumers should be fine for the most part, but what you're going to see is eroding confidence in regional banks as the financial crisis widens.

• Another leader at the LA Times is out, this time publisher David Hiller. I'm sure Sam Zell and his team can make loads of money on the paper if they just fire everybody and go to robot reporters.

• AB 97 cleared the legislature yesterday, which would ban trans fats at California restaurants and bakeries. It now goes to the governor. He did sign a ban on trans fats in school cafeterias last year.

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.

The 2nd-Largest Bank Closure In US History Is All In Your Head

It's a mental failure.

IndyMac Bank's assets were seized by federal regulators on Friday after succumbing to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation (FDIC) because it did not think the lender could meet its depositors' demands.

IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.

It's all psychosomatic! John McCain told me so!

I felt better after talking to the bubbly Crist, who's like human Prozac. "How can you not be optimistic about Florida?" he asked. "Is there a more beautiful place on the planet?" He then recounted a story that probably won't help him in the GOP Veepstakes: "John McCain told me, 'It's tough in those Rust Belt states. You really feel a bit of depression in people's outlook. But when you get to Florida, people feel great.'"

He didn't use the magic words "bitter" and "cling," and also he's not a Democrat, so this won't be a real story.

Getting back to the IndyMac takeover, combine that with the imminent failures of Freddie Mac and Fannie Mae and you're looking at the makings of a real crisis. Like run-on-the-bank kind of stuff. Freddie and Fannie account for half of the nation's mortgages and are indeed too big to fail, so ensuring that less homeowners foreclose on them is paramount. Good day for the Senate to pass foreclosure legislation. The Congress has been asleep on this for too long.