Downey Savings and Loan on Life Support

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Newport Beach-based Downey Savings and Loan is precariously close to bankruptcy.  Their stock, currently valued at a rather alarming $1.73, might go down even further after the ban of short-selling certain banking stocks is lifted.  That ban is supposed to be lifted tomorrow, unless the SEC decides to extend it. Downey S&L’s highest value per share was at one time over $63.00, and that is a tumble that would send any doctor rushing for the oxygen mask.

Downey S&L used to be a model of banking success, and was actually called upon to help other failing banks in the 1980’s. Now, sucked into the subprime mess, they are in danger of taking a dive a la Indymac. Their only hope is that their banking business can keep them afloat. But, they wouldn’t be the first, and I’m going to predict that they wouldn’t be the last institution to go under.

I’m certainly not advocating a run on the bank, but just know that only deposits up to $100,000 qualify to be FDIC insured. 

The SEC has started the chest compressions, let’s see if the patient can survive.

1 Comment so far

  1. Dave Share (daveshare) on July 29th, 2008 @ 8:58 am

    It’s times like this I’m glad I don’t have more than $100,000 in the bank.

    Shoot! I’m feelin’ rich when I have $3000!



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