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BILL MOYERS JOURNAL
Author Bill Greider explains to Moyers that the magic of the “free market” is coming to a close.

“This is a really perilous moment.” That’s how one top financier and former treasury official described our economic crisis on the NewsHour this week. Our banking system, he said, “is in worse shape than at any point since the 1930s. We’ve never seen such large losses so fast.”

As he was speaking, California’s big IndyMac Bank went down with a crash, the second worst collapse in U.S. history and sent thousands of depositors out looking for their money. The FDIC, the Federal Deposit Insurance Corporation, took over as reports circulated that the FBI is investigating IndyMac for mortgage fraud. Analysts are predicting that as many as 150 of the 7,500 banks in America may fail over the next 18 months, and one analyst even said that number might double over the next 3 years. More

Los Angeles Times
Depositors of failed IndyMac Bank endured long waits in the summer heat for a second day Tuesday, with crowds becoming irate at several branches and customers with large accounts complaining of serious problems in getting their money. Banking experts said the chaotic scenes risked touching off runs on other banks unless federal regulators quickly cashed out insured accounts and gave depositors accurate information about their funds. The Federal Deposit Insurance Corp. took over Pasadena-based IndyMac late Friday and has assured depositors that accounts with $100,000 held in a single name or $250,000 in a retirement account are safe.

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But many customers have said that when they checked their balances online, tens of thousands of dollars appeared to be missing. And when they went to branches in search of answers, they encountered lines hundreds of people deep and unhelpful staff members. On Tuesday, reports of unruly crowds brought police to branches in Encino and Northridge, although there were no arrests or injuries. Noelle Gabay of Northridge, a budget analyst for the state of California, said FDIC officials acknowledged that she was owed $213,500 but provided her access only to $99,000. “My trust in the FDIC is gone,” said Gabay, 49. “The question is now, where do we put our money? Do we buy a bigger mattress?” More