Saturday, July 12, 2008

IndyMaxed

When I heard the FDIC was taking over IndyMac bank my first thought was, "What happens in Pasadena?" The bank is headquartered here with 3,000 employees, 500 of whom presumably received pink slips last Monday. They got 30-60 days' notice.

I like to look on the bright side if there is one. I watched the video linked in the FDIC article above. In it the spokesperson says the FDIC has taken over IndyMac and is going to continue to run it as a full service bank, and to do that they'll need employees. I wonder if they'll need all 3,000. Maybe those 500 with the pink slips just got a reprieve. Maybe that's wishful thinking.

Of course this has larger implications than just for Pasadena, and I'm not qualified to discuss them—well, we're all qualified to discuss them, but you're better off reading this or this if you want the facts. But although the banking and housing industries are in lousy shape right now I know certain sectors of our economy are doing fine: retail, fashion, restaurants, and don't get me started on oil. Some folks are still making money in this country.

21 comments:

Bibi said...

Beautiful building...just heard about this bit of news, and am off to the news to learn more.

Katie said...

Wow, what a story. Quite a bit of turmoil going on inside that building. I heard about it yesterday, but didn't know that IndyMac is headquartered in Pasadena until I read more today. Thanks for all your links, which I'll check out now. I feel bad for all the people who received pink slips, and the affect that will have on Pasadena.

Life Observer said...

"I know certain sectors of our economy are doing fine: retail, fashion, restaurants, and don't get me started on oil."
Well, that's an Optimistic club comment, Petrea. I hope your female intuition is right-on regarding these industries--at least for my fav stores/restaurants! Certainly, whoever loses a job in Pasadena is probably gonna find it more difficult to remain a customer of other local Pas businesses.

Miss Havisham said...

I plan on crocheting doilies on the corner of Lake and Corson and selling them for two fer a dollar.

IndyMac has big buildings all over Pasadena. I wonder what is going to happen when all that office space comes available?

Keith said...

I, unfortunately, have an account with the now formerly IndyMac Bank. I hope it's business as usual starting Monday but I'm expecting chaos.

Lily Hydrangea said...

Living on long island I can vouch for that-there are a lot of wealthy people left in this country!

Knoxville Girl said...

I heard this on the news and wondered how big an impact this would have on Pasadena. That's an awfully big building to empty of employees. :(

Petrea said...

Thank you all for visiting and speaking up!

life observer: I'm not sure what you mean by "optimistic club." I'm not using "female intuition" about the industries I mentioned. Just going by what I hear on the news. I also heard sales of scooters are up 25%.

That's the spirit, Miss H! One must be resourceful. See "scooter sales," above.

Keith, let's hope the FDIC guy was right and cooler heads prevail. He promised business as (sort of) usual on Monday.

Knoxville Girl, they might not be letting anyone go. That's what they seem to be saying, anyway.

Kris McCracken said...

That’s a big round of layoffs. Lovely capture of the building.

Bernie K. said...

I think the economic sectors Petrea mentioned are national. YMMV in your town, but the country's doing pretty well (considering how expensive it is to fight a losing desert war).

The bad news you hear is mainly about single-family homes, banking, auto dealerships and the airlines. Manufacturing, retail & other services and technology companies are keeping their heads above water. Commercial & multiple-dwelling real estate are also doing rather well.

Too much of the economic woes are the result of short-term stupidity & greed on the part of Bush, Inc., and their f*ckbuddies in industry.

The prescription? A change of foreign policy and sensible regulation of major companies. (Can you say “November second”?)

Scale down our presence in Iraq; our childrens' lives are more important than oilfields. Pressure Congress to repeal the 1973 War Powers Resolution and adopt the framework of the
National War Powers Commission (http://tinyurl.com/66knxr). That will limit the childish overseas adventures by future presidents.

Require the carmakers to change their R&D goals to more hybrid, electric & hydrogen machines. Bring the oil companies to heel—in court: squeeze from them every dollar they've extorted from us to despoil our wilderness. Design extensive Federal oversight of health insurers, following a quasi-European model.

Get ready to pay for it all with taxes, folks. The lifestyle we've grown accustomed to got a lot more expensive while we weren't looking.

Petrea said...

Miss Havisham, I forgot to mention I hadn't known IndyMac had more buildings in town. I only knew of the one. Thanks for the tip.

Thank you, Kris. I'm hoping the government takeover means no layoffs at all. Fingers crossed (like that'll help!)

Bernie K for president! (in 2012, of course)

shirtees.net said...

I wouldnt exactly say our economy is doing well. Have you looked at gas prices? Milk prices? Yogurt? etc, etc? We used to buy corn four for a buck. Now its two. Gas has practically doubled. Milk too. A case of yogurt at Costco was $7, now its $11. Our dollar is losing its value. This isnt inflation, our money is being devalued by the big bankers. Sure, we can still afford it now, but whats YOUR limit? Will you pay $1 for an ear of corn? What about $5 for an ear? Milk used to be $4 for two gallons. Now in some places its $7 for one gallon. Whats your limit? $20 which is not far off? $30 for two gallons? Its simple economics. If our government keeps printing funny money to pay the debts to the Chinese and pay for wars around the world, and pay more funny money for phony tax refunds.. where does it come from? It means they are just printing more money, but no real value is attached to these new bills being printed. The dollar is no longer on the gold standard. We really have no clue what the value of the dollar is anymore. Short answer... invest in gold and silver. When the "sh!t hits the fan" you'll need silver to barter and buy and gold as your savings account. Im sure E*Trade and Washington Mutual will be falling soon.

If IndyMac bank had $30 billion in assets and only owed $1 billion, why is it now a Federal Bank™? This stinks to high heaven. This is nothing but a money grab and illegal bank consolidation by the big bankers that run this country. By the way, the Federal Reserve isnt run by the government. Its a network of PRIVATE banks. It is as "federal" as Federal Express.

Get informed and get ready for whatever is to come. Gold is at almost $1000 people. UNREAL! It was $300 less than two years ago. Check google video for movies like:

-America: Freedom to Fascism
-Monopoly Men
-The Money Masters

If you have a savings account earning 4% interest and the government tells you that inflation is only at 6%...well do the math... your LOSING money. Having money in a savings acct is only helping you to lose your money at a slower rate. And who believes the government anyways? Milk doubling in price in a year is not exactly 6% inflation :) [this would mean your savings of 3% is really worthless and investing in gold is a better deal]

Thursday Girl/Hollis the Cat said...

Hi Petrea--

I picked up a copy of Pasadena Weekly yesterday and saw the bit about you on the first page...very nice! :)

Yeah, the Indy Mac thing. I understand it really didn't have to happen the way it did...had to do with some guy scaring people into making a fear a reality. I remember a quote, "you become what you fear"...so I think looking for any and all positives is the right thing to do...and ride bicycles and take public transit! Pasadena is very bicycle friendly and has better public transit than most of Southern California...I take the the train to downtown LA for work and I ride my bike from South Pasadena to PCC for school...I'm also lucky that I can walk to 3 grocery stores (including TJ's), Rite Aid, the library, 2 cool coffee places, many restaurants, and yoga! I do, however, wish I had some gold...

We'll see what happens on Monday at Indy Mac...thanks yet again for a great blog!

PS: Hollis has been on a summer sabbatical, but has plans to return...

Petrea said...

Hello shirtees--I thought you were selling gold, and it turns out it's only tee shirts. Well okay, there you have it, the pessimist's perspective. I'm not sure I get the value of gold, though. What good is gold if no one can afford it?

I agree on some of the things you say--certainly it's naive to think gas will be any less than $8 a gallon by this time next year, for example. But just because some consumers are hurting doesn't mean all consumers are hurting.

I'm looking for ways to do what Thursday girl does--like not buy gas. Not feasible for everyone. But I have an idea. Instead of buying gold, I'm putting my money on hydrogen batteries.

Thursday girl, whether or not it was Charles Schumer's fault, it reportedly began after he wrote a letter questioning the viability of IndyMac.

Louis la Vache said...

The run on the bank was caused by the despicable Senator Chuck Schumer (D-NY), who never met a microphone he didn't like. The only thing worse the the previous Republican Congress is the current Democrat one. GGRRRRRRRRRR!!!!!!!!!!!

Bernie K. said...

Yeah, never mind the short-sighted sales tactics and aggressively greedy debt-bundling that this bank & their compadres have wallowed in for a decade … it must have been that one statement by a congressman CALLING FOR OVERSIGHT OF A CRUCIAL INDUSTRY that caused a run on IndyMac.

Next you'll be expecting the Pentagon to spend reasonable sums of your money on weapons that work. Since they don't, it must be someone else's fault.

shirtees.net said...

If one cannot afford gold (and who can these days) then investing in some silver is a nice option. US coins minted before 1964 were 90% silver I think? If you have saved any old coins like those, youre off to a good start.

The point of what Im saying, and maybe its the boy scout in me, is to be prepared. If our dollar is devalued so much one day that it costs $1500 to buy a gallon of milk, well, the paper money we hold will basically be useless, but gold and silver retain their value. I know it seems impossible that our dollar will become worthless, theres nothing wrong in having a back up. Im not talking about building bomb shelters here, just to have a back up plan like silver or gold. Remember when the Mexican Peso was worthless to our awesome US dollar? Not anymore. It used to be like 80 to 1 and now its only like 10 pesos to the dollar.

What has happened? Has Mexicos economy totally flourished here in the last 20 years? If so, why so many people still risk their lives to come to America? It cant all be that rosy south of the border. What has happened is our dollar has devalued to the point where the peso is now in competition.

Hydrogen appears promising, but as an engineer I dont think it will ever be viable. Imagine the massive infrastructure that needs to be built to fuel hydrogen cars, while we already have the power grid to plug a car in the wall socket right now. Hydrogen alone is EXTREMELY dangerous to handle. I for one dont want to be around it. If the Hindenburg didnt set an example for people, I dont know what will. Electric cars powered by solar and wind energy is going to be the best option for the future.

Check out the movie "Who Killed the Electric Car". It might even be on google video.

Bernie K. said...

Sorry, Petra. I know this isn't a political blog. I'm just disappointed when conservative notions of "responsibility" are applied only to individuals & magically become invalid at the doorsteps of huge corporations—as if they didn't command phalanxes of salesmen, lawyers & lobbyists who can overwhelm consumers with expertise and insider connections.

"Shutting up, sir."—C3PO

Petrea said...

Everyone's views are welcome here. As long as folks are civil it's okay to argue. Healthy disagreement is one of the things on which our nation is founded. It may not be a political blog, but I opened a political topic, didn't I?

Shirtees, I remember the peso crisis and I see what you're saying. Also understand about the electric car vs. hydrogen. I believe enough in the American economy to know that if consumers insist on electric cars the manufacturers will make them again. Call me Pollyanna, you wouldn't be the first. I've already said I'm not buying another gas-powered vehicle. Not even a hybrid. Gasoline is outmoded.

I've seen the Hydrogen-powered BMWs. Movie stars are already driving them around Beverly Hills. I got a fancy brochure. The cars'll be on the market within a year or two, but not affordable.

As far as the economy goes, it all depends on one's perspective: as middle class people we've been fine with it until recently, but the economy's always bad if you're poor. Washington tells you things are in good shape, and you're thinking, "But I can't pay my bills!" Now this is touching the middle class. Certain sectors of the economy are robust, yet we're having to alter our lifestyles to accommodate price hikes, so it feels like the economy's tanking.

Maybe I should rethink my feelings about what makes a good economy. If there are slums in my town but I can still afford gas, is the economy good?

Miss Havisham said...

Actually, there have been indicators of things going downhill for IndyMac known by its Pasadena employees. There has been a series of layoffs (300 at a time)and reorganizations. Someone I know decided to accept a very kind severance pkg from IndyMac 6 months ago when upper management forced him to cut his department to a skeleton crew-and there was too much work for normal working hours. I'm glad he left when he did.

I was an early investor in IndyMac. It was a company I believed in. I feel especially sad about its demise. Its founder a Pasadena entrepreneur.

Schumer was just a national messenger. I guess I shouldn't be surprised about the FDIC takeover, but I am. I thought they would be able to continue reorganization and downsizing-but then as I was following things IndyMac sometimes do confusing things. For instance, after one layoff they hired a great amount of new employees. I wondered at the time if they were just looking for workers with less seniority (less benefits at retirement or severance) and less operating costs due to low starting salaries. That's always a bad sign when a company does that.

It's like saying, "We don't believe in our longevity."

Petrea said...

Thanks for your inside insight, Miss Havisham. I'm wondering if Keith will check in today and let us know if business is as usual with his account.