Fremont General Bank Is Going To Fail Imminently
Posted by Frugal on March 5th, 2008
I almost forgot about this bank which has been on my to-be-shorted list for a long time. Their shares are trading only for 50 cents now.
Today’s news on their loan default pretty much spell their death loud and clear. If you even have $1000 deposited in this bank, I would suggest you to simply get ALL of the money out (in my personal opinion). It’s going to be taken over by FDIC with a very high likelihood. Try to save yourself from the hassles of an FDIC closure, which I just went through with NetBank.
As Warren Buffett has said that the current unfolding crisis is poetic justice for these banks, I kind of agree. But I keep wondering when the poetic justice will come for all these liars who have lied on their loans, walking away from their loan obligation in mass, and roaming in our nation lawlessly. Certainly if FBI put all these people in jail due to their perjury on the loan statements, our jails will simply overflow. What’s really inconceivable is that our idiotic political leaders are calling and using taxpayers’ money to bail these liars out, forgiving partially their loan amount, or modify their interest rate.
Certainly any renters or housing bubble sitters should be angry. The honest and law-abiding people got screwed three times in a row. Once when they had to sit thru the rising of housing bubbles without any real housing gains. Twice when the bubble imploded on the way down and caused havoc on the stock markets. Thrice when their tax money goes to the pockets of liars and idiotic and greedy bankers. And it doesn’t end there. Fourthly they will be screwed by high inflation caused by all the reckless printing of the US dollar.
Sorry for the rant, but honesty doesn’t pay. Cheating, lying, white color crimes, and reckless speculation pays (good money). Our society is deteriorating right in front of our eyes.
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March 5th, 2008 at 7:56 pm
Sadly, I have to agree with your comment about the rewards of dishonesty.
March 6th, 2008 at 12:19 am
Me too.
Sadly, you are absolutely right.
Doesn’t this make our politicians accessories after the fact?
March 6th, 2008 at 10:19 am
Love your blog but I would caution you against making potentially libelous statements like this one that might get you sued. Unless you have insider information, there is no way of knowing if this bank is working on getting capital from other sources. If people start withdrawing money from this bank in droves as a result of your statement and the bank doesn’t fail then you’re going to have a big problem on your hands.
Just a heads up.
March 6th, 2008 at 10:33 am
Honestly he is just doing favor by letting people know about the reality. So do you think folks are going to Sue Ben starting more and more small banks would fail.. Come one people have to use their own judgment and not rely on someone to make important financial decision. So if you have financial adviser and lost money due to his recommendation, would u sue him…also when folks like creamer in cnbc public television say sell this stock and the stock goes north would you sue them… Similar to situation when someone posts there is good CD rate in particular bank and you put money in there and the bank goes bankrupt would you sue them..
Just like what happened at E-trade little while back.. blogger here is posting his opinion.. he did not ask you to come read nor send you personal email asking you to withdraw.. you came read on your own and can’t count him liable for your action. I am sure we have disclosure somewhere in this site which states the same.. all said and done I understand your posting your opinion in good intentions.. but want to make sure we don’t stop blogger to express his honest and true opinion by warning with msgs like this.
March 6th, 2008 at 4:37 pm
Lakshmanan,
there have already been lawsuits filed against numerous bloggers. You can read about the most famous recent one here:
http://blog.mariah.com/2007/12/ml-implode-o-meter-stettles-lawsuit/
Freedom of speech doesn’t give you the right to make false accusations against someone, have them lose business, and you walk away with no consequences. Statements like, “It’s going to be taken over by FDIC for sure” are part of the problem. Proceeding to tell people to pull “ALL” of their money out now isn’t very helpful either. How do you *know* for sure that it’s going to be taken over? That statement should have read, “In my opinion, there is a high probability that this bank will end up in the hands of FDIC if actions aren’t taken to mitigate it’s current financial crisis.”
Here’s a definition for you:
libel - a written or oral defamatory statement or representation that conveys an unjustly unfavorable impression b (1): a statement or representation published without just cause and tending to expose another to public contempt (2): defamation of a person by written or representational means (3): the publication of blasphemous, treasonable, seditious, or obscene writings or pictures (4): the act, tort, or crime of publishing such a libel
March 6th, 2008 at 5:08 pm
I completely agree with your second statement when you make clarification on how blog should be written or worded. That makes sense. I got your point and hope you understood what I was saying. Going forward blogger would phrase his words so there is no undesired consequences.
March 6th, 2008 at 5:11 pm
Hi, I’m Terry Stinnett, General Counsel for Fremont Bank. We share your concerns about the financial condition of Fremont General and its subsidiary Fremont Investment and Loan, which are the companies you actually should refer to in your posting. The only problem is you refer to “Fremont Bank” and Fremont Bank has nothing to do with those two companies. Your post makes it sound like Fremont Bank is going to fail rather than them, and it needs to be corrected. Fremont Bank is in no financial difficulty whatsoever. We’re located in Northern California and have a brisk and thriving residential mortgage department. We believe that is because we have always been conservative with our underwriting. If you are interested in seeing what we do, check out our web site at www.fremontbank.com. But for now, please correct your post to refer to Fremont General and/or Fremont Investment and Loan. It’s important and we don’t take it lightly. Communications like yours (and you are by no means the only one to make this mistake) defame us and mislead the public. Thanks for your help. If you have any questions, send me an e-mail.
March 6th, 2008 at 5:11 pm
Hi, I’m Terry Stinnett, General Counsel for Fremont Bank. We share your concerns about the financial condition of Fremont General and its subsidiary Fremont Investment and Loan, which are the companies you actually should refer to in your posting. The only problem is you refer to “Fremont Bank” and Fremont Bank has nothing to do with those two companies. Your post makes it sound like Fremont Bank is going to fail rather than them, and it needs to be corrected. Fremont Bank is in no financial difficulty whatsoever. We’re located in Northern California and have a brisk and thriving residential mortgage department. We believe that is because we have always been conservative with our underwriting. If you are interested in seeing what we do, check out our web site at www.fremontbank.com. But for now, please correct your post to refer to Fremont General and/or Fremont Investment and Loan. It’s important and we don’t take it lightly. Communications like yours (and you are by no means the only one to make this mistake) defame us and mislead the public. Thanks for your help. If you have any questions, send me an e-mail.
March 7th, 2008 at 10:57 am
See I told you, now you got Fremont’s lawyer on you!
March 8th, 2008 at 11:17 am
Thanks Terry. When i heard news about ‘Fremont Bank’ I was concerned and went looking for more facts.
Bloghead Frugal - please update this post and publish a correction.
- a Fremont Bank customer
March 10th, 2008 at 12:45 am
I want to say that I support Frugals statements regarding Freemont Bank. The fact of the matter is that if the shares are trading at 50 cents, the company is essentially worthless. While I am often wrong, worthless companies are usally worthless for a reason. Fiscal insolvency is often a strong reason for such low valued shares.
He would be ethically remiss if he did NOT urge account holders to take their money out.
March 10th, 2008 at 8:23 am
Terrance L. Stinnett,
In my article, I have a web link to the news that is refering to the actual Fremont Investment and Loan. I’m only calling it as Fremont Bank for short-hand, and I’m not aware of another bank with that name. I will correct the above with the right name. The stock symbol is FMT for the bank that I’m refering.
Certainly, everything written here is solely my opinion. One should always consult their own financial advisor before making any big financial decisions.
March 10th, 2008 at 8:33 am
The first paragraph also indicated which bank it is without ambiguity. FMT is trading at around 50 cents. Freemont Bank is obviously not.
April 9th, 2008 at 12:27 pm
Is Jamie Dimon seriously considering Fremont General as an aqusition? I read the news about the rejected bid for WAMU and the article said “…Fremont would probably be too small for Dimon to be interested in”
However, several financially astute friends tell me that it wouldn’t surprise them in the least if Fremont was absorbed (with several other small regional entities) to give JP/Chase a greater presence CA. And, according to the people I spoke with) Fremont could be righted in the shortest period.
Has anyone got a feel for this?