The Barbershop has re-located

The proprietor has moved the shop to ChicagoNow, a Chicago Tribune site that showcases some of the best bloggers in the Chicago area. You can logo on to the Barbershop home page here. The ChicagoNow home page is here.

You'll still be able to post comments with the same ease as in this location. The proprietor also will keep this web site alive if you wish to review old posts.

Friday, July 11, 2008

Sen. Schumer single-handedly sinks a bank

When IndyMac Bank became the third-largest bank failure in U.S. history on Friday, blame was placed at the feet of Sen. Charles Schumer (D-N.Y).

That assessment came from John Reich, director of the Office of Thrift Supervision of the Federal Deposit Insurance Corp., which will be left holding the bag as the result of the failure, to the tune of $4 billion and $8 billion, potentially wiping out more than 10 percent of the agency's $53 billion deposit-insurance fund.

Reich, quoted in the Wall Street Journal (subscription required) noted that Schumer had sent a letter to the regulator raising concerns about the bank's insolvency. Said the Journal: "In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a 'heart attack.' 'Would the institution have failed without the deposit run?' Mr. Reich asked reporters. 'We'll never know the answer to that question.'

Not unexpectedly, Schumer found someone else to blame. His excuse, as repored by the Journal: "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today," Sen. Schumer said. "Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs."

There's only one problem with this blowhard's explanation. At one time, he was taking credit for making mortgages available to marginally qualified families. A tip of the hat to Newsalert for reminding us.

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