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Sunday, July 13, 2008

Free Internet Press Newsletter - Sunday July 13 2008 - (813)

Sunday July 13 2008 edition
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Indy Mac Bank Seized By Federal Regulators
2008-07-12 15:20:44
The federal government took control of Pasadena, California-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history.

Citing a massive run on deposits, regulators shut its main branch three hours early, leaving customers stunned and upset. One woman leaned on the locked doors, pleading with an employee inside: "Please, please, I want to take out a portion." All she could do was read a two-page notice taped to the door.

The bank's 33 branches will be closed over the weekend, but the Federal Deposit Insurance Corp. will reopen the bank on Monday as IndyMac Federal Bank, said the Office of Thrift Supervision in Washington. Customers will not be able to bank by phone or Internet over the weekend, regulators said, but can continue to use ATMs, debit cards and checks. Normal branch hours, online banking and phone banking services are to resume Monday.

Federal authorities estimated that the takeover of IndyMac, which had $32 billion in assets, would cost the FDIC $4 billion to $8 billion. Regulators said deposits of up to $100,000 were safe and insured by the FDIC. The agency's insurance fund has assets of about $52 billion.

IndyMac's failure had been widely expected in recent days. As the bank was shuttering offices and laying off employees to cope with huge losses from defaulted mortgages made at the height of the housing boom, nervous depositors were pulling out $100 million a day. The bank's stock price had plummeted to less than $1 as analysts predicted the company's imminent demise.
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U.S. Halts Rescue Of Fannie Mae, Freddie Mac
2008-07-12 15:20:20

Senior government officials prepared emergency steps Friday to rescue troubled mortgage giants Fannie Mae and Freddie Mac but stopped short after a campaign of public statements eased immediate concerns about the stability of the institutions.

Federal regulators were forced Friday to seize California-based IndyMac Bancorp after a run by depositors led to the second-largest failure ever of a U.S. financial institution. The bank, which was taken over by the Federal Deposit Insurance Corp. (FDIC), became the first major bank to shutter its doors since the savings and loan crisis of the early 1990s. One of the country's largest home lenders, IndyMac saw its holdings battered by the downturn in the housing market.

Similar troubles have buffeted Fannie Mae and Freddie Mac as anxiety has risen about whether the companies have enough capital to cover their mounting obligations because of troubled mortgages. With the companies' stock value draining away in recent days, Treasury Department and Federal Reserve officials have been discussing several dramatic options, including allowing the companies to swap some of their holdings in troubled securities for public money as well as accessing government loans, according to government officials and others informed about the measures. Fannie Mae and Freddie Mac might also be allowed to tap an expanded line of credit from the Treasury.

Such actions would be the first explicit statement by the government that it stands behind the two companies, though investors have long considered a federal guarantee to be implicit. That recognition alone could prove more valuable than the cash.

Some of the measures being considered bear a striking resemblance to the lifeline federal regulators extended to Wall Street's biggest banks earlier this year in an effort to head off a global financial crisis and underscore the peril posed by the potential failure of either Fannie Mae or Freddie Mac.

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Former Bush Press Secretary Tony Snow Dies at 53
2008-07-12 15:19:35

Tony Snow, 53, the former television and radio talk show host who became President Bush's chief spokesman and redefined the role of White House press secretary with his lively banter with reporters, died early this morning after losing a high-profile battle with cancer.

Snow was first diagnosed with colon cancer and treated in 2005, a year before joining the White House staff. But he discovered it had returned after an operation in March 2007 to remove what doctors thought was a benign growth in his lower abdomen. The cancer had spread to his liver, forcing Snow off the podium for treatment. Snow vowed to fight the disease and return to the briefing room but announced six months later that he was leaving his $168,000 job because he needed to recoup the income he lost when he left his job as a radio and television host. He later joined CNN as a commentator.

In as statement issued by the White House this morning, President Bush said, "Laura and I are deeply saddened by the death of our dear friend, Tony Snow. ... Tony was one of our Nation's finest writers and commentators. He earned a loyal following with incisive radio and television broadcasts. He was a gifted speechwriter who served in my father's Administration. And I was thrilled when he agreed to return to the White House to serve as my Press Secretary. It was a joy to watch Tony at the podium each day. He brought wit, grace, and a great love of country to his work. ...

"All of us here at the White House will miss Tony, as will the millions of Americans he inspired with his brave struggle against cancer."

In his brief tenure as the president's public advocate, Snow became perhaps the best-known face of the Bush administration after the president, vice president and secretary of state. Parlaying skills honed during years at Fox News, Snow offered a daily televised defense of the embattled president that was robust and at times even combative while still repairing strained relations with a press corps frustrated by years of rote talking points.

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Wildfire Turns Big Sur Economy Into A Cliffhanger
2008-07-12 15:20:33
Basil Sanborn is on the phone, equal parts hope and trepidation.

Glen Oaks Motel, his family business, survived the devastation of the Basin Complex fire, which swept through this storied California outpost and shut it down for the better part of the last three weeks. Now the hard part has begun.

"All of our business and buildings are intact," Sanborn tells the far-off caller. "We sure hope you come see us."

How soon that can happen is question No. 1, followed in quick succession by how much of an economic blow the blaze has caused this magnet for seekers and sightseers. Scenic Highway 1 has reopened for locals, but fire officials estimate that part of the coastal route will stay off limits for everyone else at least until Sunday.

As the smoke clears and workers trickle back, business owners and local officials have begun assessing the financial damage here in the place Henry Miller called "the face of the earth as the Creator intended it to look."

Sanborn figures his motel will take a $100,000 hit this summer season. The inn, gas station, cafe and store at Ripplewood Resort next door will lose at least that much. The Ventana Inn and Spa hasn't pegged its losses yet, but it's not scheduled to reopen until August.
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USDA To Begin Naming Retailers In Meat Recalls ... Sort Of
2008-07-12 15:20:02
In a shift on federal food safety policy, the Bush administration soon will begin telling consumers during recalls whether their local grocery store has been stocking contaminated meat or poultry.

The U.S. Department of Agriculture, which announced the change Friday, currently publicizes food recalls and sources but does not tell consumers where the tainted products have gone.

Long-standing anger about this policy flared in February during the largest beef recall in U.S. history, when the Agriculture Department refused to make public the schools and stores that carried beef recalled by the Chino-based Westland/Hallmark Meat Co.

On Friday, Agriculture Secretary Edward T. Schafer announced that the rule change would apply only to recalls involving "a reasonable probability of serious health consequences or death for those with weakened immune systems."

"People want to know if they need to be on the lookout for recalled meat and poultry from their local store," Schafer said. "By providing lists of retail outlets during recalls, USDA's Food Safety Inspection Service will improve public health protection."

The announcement comes on the heels of two serious beef recalls that began in late June and were expanded over the Fourth of July weekend.
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