INDYMAC BANK SALE PROVES TWO THINGS: WE'RE AT THE BOTTOM, AND WE'RE BEING SCREWED!

A seven-member investor group including billionaire George Soros and Dell Inc. founder Michael Dell have agreed to purchase failed lender IndyMac Bank, one of the largest casualties of the housing bust, for $13.9 billion.

IndyMac, which specialized in loans made with little down payment or proof of assets, was seized by the government in July after a run on the bank as the U.S. housing market collapsed. The Federal Deposit Insurance Corp. said Friday that a holding company led by Steven Mnuchin, co-chief executive of private equity firm Dune Capital Management, agreed to buy IndyMac in a deal reached Wednesday.

The investors have formed a partnership, called IMB Management Holdings LP, that includes Dell's investment firm, MSD Capital. Once the deal closes, the investment group will pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, Calif-based bank, the FDIC said.

"We have assembled a group of experienced private investors in financial services to acquire the former IndyMac and operate it under new management with extensive banking experience," Mnuchin said in a statement. "We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities."

Investors in the partnership include five private equity firms or hedge funds: J.C. Flowers & Co.; Stone Point Capital; Paulson & Co.; a fund controlled by billionaire George Soros' Fund Management; and a fund controlled by Silar Advisors LP.

Dune Capital was founded in 2004 by former Goldman Sachs Group Inc. partners Mnuchin and Daniel Niedich.

J. Christopher Flowers, who launched, then dropped, a bid to buy student lender Sallie Mae last year, also is a former Goldman Sachs partner. Paulson & Co. made billions in profits in recent years by betting on the failure of risky home loans.

YOU READ THAT RIGHT:

• THE GUYS IN ON THE DEAL INCLUDE A MAJOR MAJOR MAJOR OBAMA SUPPORTER - SOROS,
  
• AND FORMER BUSINESS PARTNERS OF THE CURRENT SECRETARY OF TREASURY,
  
• AND ONE OF THE HEDGE FUNDS WHICH HELPED CREATE AND INTENSIFY THE RUN ON THIS BANK'S SHARES AND OTHER BANKS' SHARES.

HERE'S THE BAD NEWS: MUCH OF THE RECENT FINANCIAL CRISIS WAS FOMENTED BY THESE VULTURES AND OTHERS LIKE THEM WHO VICIOUSLY SHORTED BANK STOCKS AND INVESTMENT BANKS. NOW, THEY'RE STEALING THESE ASSETS FOR A SONG.

AND WE - THE TAX-PAYERS - ARE GETTING SCREWED, BIGTIME:

HERE'S HOW GROSS OF NEWSWEEK SAW IT:

Know When To Hold 'Em

The FDIC sells failed IndyMac Bank too soon—and for too little.

The Federal Deposit Insurance Corp. on Monday agreed to sell IndyMac, a failed bank it took over last July, to a group of sharp Wall Street operators. They're paying about $15 billion, leaving the FDIC with a loss of about $9 billion on the bank. The government will probably be glad to get rid of IndyMac after just eight months, as it would like to unload all the other failed companies and bad assets the Treasury Department and Federal Reserve has amassed. But there's reason to think they should wait awhile before selling.

Markets, which are presumed to be rational, are in fact frequently bipolar. Prices get distorted—too far upward during bubbles and too far downward after they pop. Now, they're down. Nobody today wants to buy banks or financial firms or subprime mortgage-backed securities, whose value has fallen by 90 percent or more since the peak.

So it's no surprise IndyMac is selling for a song.