In an environment of high volatility and severe financial market strains, the loss of confidence in a financial institution could result in significant market disruptions that threaten the financial strength of similarly situated financial institutions and thus impair broader financial markets and pose a threat to the overall economy. The resulting financial strains could threaten the viability of otherwise financially sound businesses, institutions, and municipalities, resulting in adverse spillovers on employment, output, and incomes.
“financially sound businesses, institutions, and municipalities”? financially sound??
On Wednesday December 31, 2008 the Federal Deposit Insurance Corporation (FDIC) signed a letter of intent to sell the banking operations of IndyMac Federal Bank, FSB, Pasadena, California, to a thrift holding company controlled by IMB Management Holdings LP, a limited partnership. The FDIC’s Board of Directors approved the agreement to sell IndyMac Federal to the investor group.
The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided. It is estimated that the cost to the FDIC’s DIF for resolving IndyMac Bank will be between $8.5 billion and $9.4 billion, in line with previous loss estimates. Costs include prepayment fees of $341.4 million to the Federal Home Loan Bank of San Francisco, on the payoff of $6.3 billion in FHLB advances.
According to the fact sheet, Merrill Lynch was the exclusive financial advisor for the overall deal. (No surprise there.)
1) Don’t chase rallies in the stock market.
I’ve spent the last six years or so as a perma-long. In May I largely pulled out of the market and started trading again. Chalk a few big mistakes up to naiveté – I chased a few rallies in the spring and summer, and it cost me. I got smarter toward the end of the year with a nice 15% return for October through December. In 2009 I will leverage what I’ve learned, continue to be defensive, and have a successful year trading.
2) Cut my burn rate, again.
According to Microsoft Money, I slashed my annual cost of living (annual burn rate) by 38.54% in 2008. The initial cuts were pretty easy – eliminating a big auto lease payment and insurance costs, no trips this year to Biloxi or Vegas, and no big ‘bling’ purchases. Toward the end of 2008 I started working on running costs like energy savings in my utilities and more budget conscious grocery shopping. In 2009, my goal is to cut another 35%. This will come as the beginning of 2008 falls off the radar and as more work is done on reducing running costs.
3) It’s a classic – exercise more.
Jogging is my ‘big thing’ as far as exercise is concerned, but I never seem able to get a good regiment of exercise going for any period of time. My weight between exercise and no exercise periods floats between 180 and 200. I hate weighing 200. I haven’t jogged since the fall of 2007, and as a result last night the scale tipped in at 197. This year I’m going to start and keep running regularly. I’ll bust out a fresh Microsoft Excel spreadsheet and track my progress. I want to be doing three to four miles down the beach on a regular basis by the end of the year.
4) Fix the leak in my roof.
Ugh, there’s a leak in my roof in my master bathroom. I’ve fixed it twice before, every time it comes back. This time around instead of relying on handy-man cheap fixes or getting up on the roof and trying to caulk my way out of it, I’ll contact a roofing company and get the problem fixed for good.
That’s probably good enough. Bite off more than you can chew and you never get any of it done.