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5. IndyMac's Race to the Bottom

IndyMac (IMB Quote) climbed into its death bed Monday, but as the week wore on, it just wouldn't give up its ghost.

A feebler, and therefore less destructive, offspring of housing-market force of nature Countrywide Financial, IndyMac became the nation's largest originator of U.S. mortgages when Bank of America (BAC Quote) swallowed Countrywide earlier this year. As IndyMac can testify, being No. 1 ain't all gravy.

Late Monday, IndyMac announced that it was facing a liquidity crunch and regulators that believe it is no longer "well capitalized" and have asked the company to reformulate its business model.

In addition to firing employees, IndyMac also said it plans to cease most loan production, certainly a risky business model for a company that primarily originates loans.

On that news, shares of the penny stock plummeted a staggering 30%, or 33 cents, to close at 44 cents Tuesday. Friedman Billings Ramsay analyst Paul Miller cut his IndyMac price target to $0 from $1, and Standard & Poor's slashed IndyMac's credit rating to "CCC," which means junk, saying there may be more downgrades in the offing.

To make matters worse, IndyMac said the same day that its depositors were withdrawing cash at an "elevated pace."

As its stock languishes at around 31 cents as of Thursday's close (it traded at $30 a year ago), IndyMac is a mortgage lender that does not issue loans, and a bank whose depositors are fleeing. That's one knockout of a business model.

Dumb-o-meter score: 65. As a near-expired IndyMac lolls around dazed and empty, maybe one final knockout is just what it needs.

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