Indywhatnow?

Indymac is no more. Kaput. Adios. See ya later. Except most people reading about it probably are thinking what the heck is an Indymac? Is that like a special Big Mac that they serve in Indiana? This on top of the Fannie Mae and Freddie Mac stories. It's almost like an Onion joke or something wit these names.

Nonetheless a big bank has failed. The bank failed because it made bad loans to home "owners". These weren't subprime loans. They were Alt-A loans. These are loans that are deemed less risky than subprime but in reality aren't. An Alt-A loan is basically someone with ok credit who states their income but does not document the income. These loans are also called liars loans because as any reasonable human could tell, if you can't document your income, you're lying about your income. San Francisco was and is sometimes referred to as Alt-A by the Bay since such a huge proportion of loans there were Alt-A. Your typical software engineer making $125K a year getting a loan for $675K with a stated income of $250K.

The media has been calling this a subprime issue for years now. I have said on numerous occasions it is not about sub prime at all. It is about people of all income levels taking out too much debt. The failure of Indy proves that point once and for all. And all those McMansions and high end condos foreclosing by the truckload on a daily basis will be the end result of this mess.

Now of course the Fed will bail out everyone involved just like it did with Bear Sterns. The Indy executives who ran the bank into the ground will get their multi-million dollar bonuses. Wouldn't be surprised to the Indy's CEO in the Obama administration. Maybe Sec. of Treasury. Why not? Obama did hire the ex-Fannie Mae CEO to find a VP.

And yet even with all this going on, the MSM is still printing stories like this claiming now is the time to buy a home.