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Bank Of America To Pay $8.5 Billion To Settle Mortgage (Mis)Representation Suit With BlackRock, Pimco, New York Fed Et Al.

Tyler Durden's picture


Bank of America may be about to part with more money than it has earned since 2008 in what will soon be the biggest financial settlement in the industry to date According to the WSJ, the Charlotte, NC-based bank is preparing to pay $8.5 billion to settle mortgage (mis)representation claims (aka the Mortgage putback issue) brought on by such high profile figures as BlackRock, Pimco, MetLife and, of course, the Federal Reserve, previously discussed on Zero Hedge. "A deal would end a nine-month fight with a group of 22 investors that hold more than $56 billion in mortgage-backed securities at the center of the dispute, including giant money manager BlackRock Inc., insurer MetLife Inc. and the Federal Reserve Bank of New York." Keep in mind that this is actually not good news for the bank, contrary to what the company's stock is doing after hours, as this still keeps the company exposed to a multitude of other rep and warranty litigation (which will now be largely underreserved), not to mention fraudclosure issues, which are totally unrelated, and which will plague the bank for years and years. Lastly, BAC is largley underreserved (see below) for a settlement of this size which means its Tier 1 capital ratio will likely be impacted due to a major outflow of cash.

From the WSJ:

The deal could embolden mutual-fund managers, insurance companies and investment partnerships to go after similar settlements with other major U.S. banks, arguing that billions in loans scooped up before the U.S. housing collapse didn't meet sellers' promises or were improperly managed. Most vulnerable would be Wells Fargo & Co and J.P. Morgan Chase & Co., which along with Bank of America collect loan payments on about half of all outstanding U.S. mortgages.

The dispute between Bank of America and the mortgage investors began last fall when they alleged that securities they bought before the financial crisis from Countrywide Financial Corp. were composed of loans that didn't meet sellers' promises about the quality of the borrowers or the collateral.

While it is still very much unclear what the terms of the settlement are, one thing is certain: BofA acquisition of Countrywide for $4 billion is rapidly becoming the worst purchase in the history of M&A. Luckily, Angelo "Agent Orange" Mozillo, has a permanent get out of jail card. One wonders just what dirty secrets old Angelo know about the housing market (or regulators' sexual lifestyles) that not one regulatory agency or DA office is willing to go after him?

And, as often happens, we were quite correct when we speculated back in January that Bank of America is woefully underreserved for this development:

Can You Spell U-N-D-E-R-R-E-S-E-R-V-E-D? If Not, Here Is A Visualization Aid

Following today's news of an imminent lawsuit to be filed against Bank
of America by such entities as the New York Fed (which, by the way, it
had to do, and not voluntarily, but merely as a function of its
fiduciary duty to taxpayers through its Maiden Lane holdings, managed,
conveniently enough, by Bank of America minority holding BlackRock)
everyone promptly has taken a quick look back at the bank's earnings
presentation, and especially one little piece of data: the putback
reserve. Taking a quick look a page 23 on the pdf we read: "3Q10 reps and warranties provision of $872M is $376M lower than 2Q10,
as the current quarter included an increase in expected repurchases
from GSEs while 2Q10 included additional provision for monolines." So
how does this stack up relative to the $47 billion in putback demands by
such legal "dilettantes" as Bill Gross, Bill Dudley and Larry Fink? We
have created the chart below to assist in that particular question. We
are also confident that with each passing day we will have to add to the
red-shaded area as more and more putback lawsuits come out of the
woodwork. And as to where the deficiency amount will have to be funded
from? Think cold, hard cash. The same cash that until recently would
have been on the "sidelines."


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Tue, 06/28/2011 - 18:13 | 1410160 bigwavedave
bigwavedave's picture

what no jailtime?

Tue, 06/28/2011 - 18:13 | 1410169 buzzsaw99
buzzsaw99's picture


Tue, 06/28/2011 - 18:53 | 1410231 Careless Whisper
Careless Whisper's picture

here is the bank of america "put-back" issue explained for the learning impaired (starts @ 2: 55)


Tue, 06/28/2011 - 19:12 | 1410268 macholatte
macholatte's picture


Tue, 06/28/2011 - 20:35 | 1410419 Ahmeexnal
Ahmeexnal's picture

MethLife....another disaster about to go BOOM.

Tue, 06/28/2011 - 20:59 | 1410450 max2205
max2205's picture

I see Obamarama giving BAC a presidential pardon so we can forget by the 2012 elections

Tue, 06/28/2011 - 19:10 | 1410273 blunderdog
blunderdog's picture

Wow.  I love a woman who really knows how to enunciate like that!

Tue, 06/28/2011 - 19:57 | 1410361 Never_Put_Down
Never_Put_Down's picture

Nice read blunderdog, I was reading her lips all the way...every enunciation, every nuance

Tue, 06/28/2011 - 20:51 | 1410440 WonderDawg
WonderDawg's picture

She was reading that way so that even mainstream "journalists" could understand.

Tue, 06/28/2011 - 22:47 | 1410605 mr. mirbach
mr. mirbach's picture

I'm sending that link to my Congress Critters! They may have to watch it 7 or 8 times before they understand, or more.

Tue, 06/28/2011 - 23:58 | 1410720 Sausagemaker
Sausagemaker's picture

"Last time a saw a mouth like that it had a hook in it!"

Tue, 06/28/2011 - 19:08 | 1410266 The Fonz
The Fonz's picture

Wonder how much my FAZ is going up tomorro? :P

Tue, 06/28/2011 - 21:13 | 1410467 quintago
quintago's picture

Reps and Warranties? Are those like taxpayer bailouts?

Tue, 06/28/2011 - 18:53 | 1410232 Logans_Run
Logans_Run's picture

I was listening to John Mellencamp's "Baby You Make It Hurt so Good" while reading your post, got lost in your avatar...uh....what was it you said?

Tue, 06/28/2011 - 19:14 | 1410275 gmrpeabody
gmrpeabody's picture

Speaking of avatars....

Tue, 06/28/2011 - 19:20 | 1410293 The Fonz
The Fonz's picture

He said "Jiggly boobs, jiggly boobs, boobs that jiggle!"

Wed, 06/29/2011 - 08:29 | 1411203 johngaltfla
johngaltfla's picture

Just a quick reminder from IRA's Chris Whalen this morning:

BAC settlement does NOT cover "Investors’ securities and fraud claims and certain other claims"

Tue, 06/28/2011 - 18:16 | 1410163 apberusdisvet
apberusdisvet's picture

Geithner will channel Paulson, and voila:  TARP II

Tue, 06/28/2011 - 19:13 | 1410279 gmrpeabody
gmrpeabody's picture

yah really, they aren't paying for anything.

WE ARE!!!!

Tue, 06/28/2011 - 19:35 | 1410315 WestVillageIdiot
WestVillageIdiot's picture

And why is that motherfucker Mozilo not in prison?

Tue, 06/28/2011 - 19:50 | 1410343 Cdad
Cdad's picture

His skin tone frightened the other prisoners.

Tue, 06/28/2011 - 20:10 | 1410377 The Fonz
The Fonz's picture

That dude goes to jail and I guarantee he is going to be picking up a lot of soap from the floor :P I cannot even concieve of what his nickname might be :)

Tue, 06/28/2011 - 20:27 | 1410400 krispkritter
krispkritter's picture

"Mozillo 'My Bitch' Pillow"..."So Mo, how do you like Federal 'Pound Me In the Ass Prison'?"

Wed, 06/29/2011 - 00:30 | 1410766 blunderdog
blunderdog's picture

He didn't need an orange jumpsuit.

Tue, 06/28/2011 - 21:24 | 1410475 Quixotic_Not
Quixotic_Not's picture

And why is that motherfucker Mozilo not in prison?

Tue, 06/28/2011 - 18:13 | 1410165 hugovanderbubble
hugovanderbubble's picture


Bank Of America Price Target = 5.90$

0.4x P/ BV = if Price to book value its useful..and representative with a proper accounting and audit Real Estate methodology

Tue, 06/28/2011 - 18:17 | 1410168 WilliamShatner
WilliamShatner's picture

My January puts in B of A are gonna be worth a ton of $$ soon.


Tue, 06/28/2011 - 18:16 | 1410170 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

BAC up after hours....LOL!!!!!  Party at the Hamptons this weekend!  Bring a mask!

Juvenile - Back That Ass Up:
Tue, 06/28/2011 - 20:06 | 1410372 Never_Put_Down
Never_Put_Down's picture

Only $8.5 Billion? Chump change, let's party like it was 1999

Tue, 06/28/2011 - 22:04 | 1410541 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

$8.5 billion can become $85 billion with fractional reserve lending!  That is a lot of liability to cover.

Wed, 06/29/2011 - 00:19 | 1410744 e_goldstein
e_goldstein's picture

Dude, don't sweat it. The middle class taxpayers will cover it. Hey, where'd they go?

Tue, 06/28/2011 - 18:18 | 1410171 doomandbloom
doomandbloom's picture

so..all settled now.....

we start buying from tomorrow?

Tue, 06/28/2011 - 18:14 | 1410172 Franken_Stein
Franken_Stein's picture


From your bank accounts aka the cash reserve.

From excess reserves of BofA with the Fed.


Tue, 06/28/2011 - 19:34 | 1410322 WestVillageIdiot
WestVillageIdiot's picture

Bank of America will be sacrificed.  That was decided long ago.  It is not a NYC bank, like JP Morgan.  It is out of Charlotte, NC.  They will be split up as the lamb at the luncheon.  The rest will say, "look how responsible we all are".  Goldman, Citi and JPM will laugh their asses off at the gullibility of the American sheep.

Tue, 06/28/2011 - 20:25 | 1410403 krispkritter
krispkritter's picture

And they wouldn't change the name to "Banc of Amerika"...

Tue, 06/28/2011 - 18:16 | 1410175 sheep92
sheep92's picture

This is actually bullish for the market as 8.5 billion dollars sitting around doing nothing are now going to folks who might put it to use. BAC, who knows or cares.

Tue, 06/28/2011 - 19:54 | 1410353 WestVillageIdiot
WestVillageIdiot's picture

I have downgraded Dick Bove to subhuman cunt, from cunt. 

Tue, 06/28/2011 - 20:00 | 1410365 Never_Put_Down
Never_Put_Down's picture


Tue, 06/28/2011 - 22:30 | 1410588 BC6
BC6's picture

lol, that is beautiful WestVillage

Tue, 06/28/2011 - 18:20 | 1410178 candyman
candyman's picture

This must be the reason Dick Bove upgraded this POS but hid this little nugget from us all. This guys on FIRE!

Tue, 06/28/2011 - 18:20 | 1410180 richard in norway
richard in norway's picture

i'm confused, 8.5 billion is a lot of money, was the market really expecting a worse result. i'm surprised that the lawsuit got this far

Tue, 06/28/2011 - 19:16 | 1410278 Orly
Orly's picture

I think the joke here is that mortgage fraud is worth trillions of dollars, yet no one has claimed responsibility, much less gone to prison.

$8.5B used to be a lot of money...and I'm sorry to say this but...please try to keep up.

Tue, 06/28/2011 - 19:24 | 1410302 The Fonz
The Fonz's picture

Your doing fine Richard. Being able to admit what you don't understand will keep you kicking in this business. In fact it might be more important that what you DO understand.  Also I cannot fathom why B of A is up afterhours.... uh algos? what? What don't we know?

Tue, 06/28/2011 - 18:25 | 1410182 candyman
candyman's picture

This must be the reason Dick Bove upgraded this POS but hid this little nugget from us all.

Tue, 06/28/2011 - 18:28 | 1410190 Cdad
Cdad's picture

Panic buying in the AH's gone.

The same cash that until recently would have been on the "sidelines."


Tue, 06/28/2011 - 19:56 | 1410359 WestVillageIdiot
WestVillageIdiot's picture

On the day BAC bought Countrywide the stock was at $38 per share.  BRAVO!

Tue, 06/28/2011 - 18:22 | 1410191 YesWeKahn
YesWeKahn's picture

Time to celebrate, at least it's not 80 billion. Let's rally the stock market.

Tue, 06/28/2011 - 18:29 | 1410198 duncecap rack
duncecap rack's picture

I was just reading an great article last night linked to from Jesse's about ,among other things, how the private sector was much more effective at effecting justice for financial crimes then federal regulators and today there is this proof of the thesis. It is refreshing to see the cabal being hit where it hurts but it would be much, much better if they got a piece of mr. Orange.

Tue, 06/28/2011 - 18:38 | 1410213 buzzsaw99
buzzsaw99's picture

If they went after Tangelo for the fraud and pump and dump schemes that would set a bad precedent.

Tue, 06/28/2011 - 19:29 | 1410313 The Fonz
The Fonz's picture

I'll go read that article, however I remember Greenspan said the same to Brooksley Born. He said "Let the market take care of the fraudsters!"  Classic.

Tue, 06/28/2011 - 19:58 | 1410356 duncecap rack
duncecap rack's picture

Article was TBTF or too big to change? by Chad Johnson

Tue, 06/28/2011 - 20:35 | 1410410 The Fonz
The Fonz's picture

Thanks, good article :) Can be found at the link below.

Tue, 06/28/2011 - 18:36 | 1410207 Rynak
Rynak's picture

Pray real hard to Benron now!

Tue, 06/28/2011 - 18:38 | 1410209 The Proletariat
The Proletariat's picture



Linda Green

Vice President

Tue, 06/28/2011 - 18:36 | 1410210 LongBalls
LongBalls's picture

Higher fee's coming to a BAC customer near you.

Tue, 06/28/2011 - 18:37 | 1410211 ghostfaceinvestah
ghostfaceinvestah's picture

This is huge for the monolines.

Tue, 06/28/2011 - 18:38 | 1410212 MonkeySmoke
MonkeySmoke's picture

One member of the criminal cabal down, several more to go. Then the real celebration can begin!

Tue, 06/28/2011 - 18:41 | 1410219 John Law Lives
John Law Lives's picture

How long until BAC starts jacking up fees on its customers?

Tue, 06/28/2011 - 18:47 | 1410221 slewie the pi-rat
slewie the pi-rat's picture

coupla Qs: 

are those underreserves marked to market?  is there an under/under line?

also, does  BofA + countrywide = jpmorgue/rockefeller + wachovia?

Tue, 06/28/2011 - 18:44 | 1410222 oogs66
oogs66's picture

think someone knew and that's why bank stocks were heavy today with SPX screaming?

Tue, 06/28/2011 - 18:45 | 1410225 Problem Is
Problem Is's picture

I say Tangelo Mozilo has dirt on the entire Fannie/Freddie industrial-fraud-complex...

Why else no-touchy-touchy on Tangelo??

Tue, 06/28/2011 - 18:59 | 1410250 buzzsaw99
buzzsaw99's picture

he has dirt on half the usa senate.

Tue, 06/28/2011 - 19:17 | 1410276 wisefool
wisefool's picture

This may or may not be true. But what exactly passes for "dirt" now adays?

People know the housing bubble was scam. But it kept people off the streets for a while


  • Barney Frank admitted to having a roomate who ran a male prostitution ring out of his apartment
  • Anthony Weiner was sexting to people who he did not verify thier ages.
  • Vitter admitted to soliciting prostitutes and is still serving.
  • Nancy Pelosi is a leader of the progressive/class warfare momement, but has a net worth in the stratosphere.
  • Michelle Bachmann is one of the purported leaders of the "TeA pArTY" but is a former IRS employee and post graduate tax lawyer, whose family farm recieved $250,000 in federal subsidies.
  • Dick Cheney has a gay daughter.
  • Bill Clinton had oral sex with that woman
  • HVAC on Al Gore's home and vehicles contribute more to global warming than the typical small town USA
  • There were no WMDs in Iraq.
  • The govenator had a love child with a servant, and got away with it while married to a daughter of one of the most powerful political familes in the USA.
  • Ben Bernake told 60 minutes that he does not print money, one year after he told 60 minutes that he does print money.



So, with a gritty, gritty grain of irradiated sea salt: Exactly what kinds of things would be "dirt" moving forward into this brave new world?

Tue, 06/28/2011 - 19:23 | 1410299 gmrpeabody
gmrpeabody's picture

Well, let's see. Say, maybe, an IRS agent sent to audit your tax returns, and he finds your last post here at ZH. Would that be considered dirt?

I fear that the new definition of "dirt" will be in the eye of the beholder.

Tue, 06/28/2011 - 19:39 | 1410305 wisefool
wisefool's picture

Ehh, I am resigned to paying almost every dollar of my future income to taxes.

As you say, thats my scoop of dirt.


EDIT: Regarding my list, which one of the statements did I make that were not legitimate news stories?

Tue, 06/28/2011 - 19:38 | 1410327 treemagnet
treemagnet's picture

Lets be clear now, he did NOT have "zexual relations" with THAT woman....and Gore well, fuck - cut him some slack hey, I mean, this is the man that invented the internet!

Tue, 06/28/2011 - 23:25 | 1410679 wisefool
wisefool's picture

Right. Here are some other examples of dirt:


  • Donald Trump made all of his billions honestly. He also was honest when he bankrupted on several other piles of money(debt).
  • Linda McMahon would have been a fantastic elected executive official. Managing congress critters and pro wrestlers is not really that different. She would have also been effective controlling the special interest groups/lobbyists. (read wrestling factions, agents and managers)
  • The Reagan administration did do bad stuff during Iran contra.
  • Reagan,however, wiped out tons of of loopholes from the tax code.
  • Reagan did introduce the rampant deficit spending, but see also tax code,cold war.
  • (If you find somebody who really hates Reagan, ask them which one of these they are most upset about, look for eye movement to the left when they speak)
  • Senator Byrd used to be openly racist.
  • Dodd got a sweetheart mortgage from mozillo.
  • When Nader ran against Clinton and Dole, the press demonized him for having a $1M net worth. Doles' wife Elizabeth collected a $1M yearly salary as executive of the charity called the American Red Cross. And we all know Bill's job history since he left the presidency. 
  • Grant really did drink a lot.
  • Ben Franklin was a womanizer
  • John Boehner, the face of the evil, rich money grubbing republicans, has a relatively low net worth compared to the congress critters he is in charge of.
And for the Grande Finale: Everything that Nixon did during Watergate, is now legal.


So, I am still learning how the world works, but it keeps changing on me. What kinda dirt is going to be the bad stuff (dirt) people collect moving forward? There is nothing more to learn on CNBC except that Michelle C^2 and her crew in greece are troopers for putting up with the green laser pointers they flash at them.

Much of the above is snarky. But I am sincere when I say thanks for Zerohedge and all of you posters.

Wed, 06/29/2011 - 01:12 | 1410805 laughing_swordfish
laughing_swordfish's picture

They were lucky to get $67.5 million from the Tangelo and give him his "get out of jail and go away" card.

Right from the get-go, Tangelo had demanded that the "settlement" (actually a wrist-slap "cost-of-doing-business" nick) be "Global" - i.e. a full and final settlement of all civil AND criminal charges by the Feds.

Once the Feds pondered the matter, and realized that he would be the "Mother of All Canaries" at either a civil or criminal trial, they were happy to see him go. Chirs Dodd's "early retirement" was just one casualty, as Dodd was told that should Mozilo go to trial either civilly or criminally, he would be star witness and fall guy, along with his bung buddy Bawney Fwank.

Dragging sitting Senators and Congressmen into court as witnesses or co-conspirators is a definite career-limiting move at DOJ or SEC.

However, BofA may yet have recourse against the Orangeman


Tue, 06/28/2011 - 18:53 | 1410235 RockyRacoon
RockyRacoon's picture

Get back to me when that check is actually written.

Tue, 06/28/2011 - 18:53 | 1410244 Texas Ginslinger
Texas Ginslinger's picture

Can BOA just create some new junk debt, box it up with AAA wrapping paper and sell it to unsuspecting fund managers to cover this..??

Tue, 06/28/2011 - 19:10 | 1410262 Careless Whisper
Careless Whisper's picture

too much trouble for that. they can just go to the fed window and get the 8.5 interest free.

Tue, 06/28/2011 - 19:47 | 1410338 HowardBeale
HowardBeale's picture

They've already gone to the fed window and "earned" the 8.5 in interest--just for being them.

Tue, 06/28/2011 - 20:36 | 1410414 traderjoe
traderjoe's picture

Actually, fractional reserve banks can create money for free.

Tue, 06/28/2011 - 19:00 | 1410251 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Don't BlackRock 'over-see' SLV? and relevance or nothing to worry about?

Tue, 06/28/2011 - 18:56 | 1410252 Hannibal
Hannibal's picture

Chump change!

Tue, 06/28/2011 - 19:06 | 1410263 Southern_Povert...
Southern_Poverty_Law_Center's picture

I am greatly disturbed by the comments I have read on this website. These blogs appear to be riddled with right-wing extremists and conspiracy theorists.  The hateful and racist undertones underlying these fringe beliefs should not and will not be tolerated.

Tue, 06/28/2011 - 19:16 | 1410277 magpie
magpie's picture

Crony capitalists and dysfunctional banks are the mainstay of our society's diversity. Please be tolerant.

Tue, 06/28/2011 - 19:17 | 1410286 Orly
Orly's picture



Tue, 06/28/2011 - 19:19 | 1410291 blunderdog
blunderdog's picture

You're new to this Internet thingy, aren't you?

Tue, 06/28/2011 - 19:26 | 1410297 topcallingtroll
topcallingtroll's picture


Hamy or Gunslinger got me again! Its a fake.

Wed, 06/29/2011 - 17:42 | 1413491 WaterWings
WaterWings's picture

They make it sound like we are in their HR department. I see broad strokes of "racism" painted over ZH in the near future.

Tue, 06/28/2011 - 19:23 | 1410292 topcallingtroll
topcallingtroll's picture

Maybe you should stick to reading articles and avoid the comment section.

There are the rare bigoted comments. I think most of the libertarian conspiracy freaks would be appalled at being.called right wing, and unfortunately some stereotypes represent uncomfortable patterns which I see no problem with addressing those in fight club.

Southern Poverty Law Center considers Oath Keepers an extremist organization and at that point lost my support. Extremism in the defense of liberty is no vice. It certainly isnt racist.

Tue, 06/28/2011 - 19:30 | 1410314 Orly
Orly's picture

Thanks, doc.

And to quote one of the best orators ever to grace the Earth:

"One day, a man will be judged not by the colour of his skin but by the content of his character."

I am an avowed conspiracy theorist because as we're all finding out much to my glee, they're all true.  Never, ever, have I been a racist; nor shall I ever be.

And as an adjunct to what I know is coming in this fight, a paraphrased and Libertarian extention:

"One day, a man will not be judged by the colour of his skin, nor by the creed to which he supposedly adheres, but by the content of his words, actions and overall character."

Tue, 06/28/2011 - 19:46 | 1410335 topcallingtroll
topcallingtroll's picture

I have always been in love with your avatar!

I have a soft spot for sweet little country girls.

Wed, 06/29/2011 - 01:11 | 1410806 Bolweevil
Bolweevil's picture

Whomever possesses the mouse that junked Orly kindly step forward and reclaim your refuse with a conscious rebuttal or be forever deemed 'troll' or 'pussy'. Your choice. No offense top caller. My apologies to those sensitive to the p word.

Tue, 06/28/2011 - 19:26 | 1410306 Clay Hill
Clay Hill's picture

A+ for timely choice of subject matter, and thematic development.

Tue, 06/28/2011 - 19:32 | 1410317 Robslob
Robslob's picture


Now Fuck Off!

Tue, 06/28/2011 - 19:36 | 1410324 The Fonz
The Fonz's picture

Your going to decide what is tolerable eh? What an absurd and laughable thing to say! You sir have earned my junk, please don't trouble yourself with a reply :)

Tue, 06/28/2011 - 19:41 | 1410326 Axenolith
Axenolith's picture

You would probably be more productive in protecting society by keeping tabs on Morris Dees than financial sites...

Tue, 06/28/2011 - 19:56 | 1410351 HowardBeale
HowardBeale's picture

What race are you? I'd like to make a comment that will validate your phobia. In fact, don't bother. Just fill in the  blanks below: a sort of do-it-yourself sadism--which is what you're mostly good at, right?


You dirty __________ __________! We don't need no steengking _________s around here. You ________s are always plotting to ____________ ________ __________--and other stuff. Go _____ yourself ________!

Tue, 06/28/2011 - 20:36 | 1410420 krispkritter
krispkritter's picture

Who let these douchebags into the party? There goes the GD neighborhood. Time to bleach the pool, shave the dog, and de-lice the kiddies. 'Fringe beliefs'? Oh, you mean shit that doesn't reflect your pathetic views of 'equality'. I love idiots how go 'I don't like what I hear on TV/radio'. Here's a thought Einstein, CHANGE THE FUCKING CHANNEL! Wow, is that a novel concept. If you don't like what you're reading here YOU"RE ON THE WRONG FUCKING SITE ASSHOLE! Kindly go mindfuck some other pieces of mindless zombie trash and stop peeing in ZH's pool. On second thought, come on in! The kool-aids over there...

Wed, 06/29/2011 - 02:46 | 1410869 jomama
jomama's picture

i lol'd

Tue, 06/28/2011 - 19:14 | 1410281 RobotTrader
RobotTrader's picture

How is this any different than Anglo Gold Ashanti and Barrick spending billions upon billions to exit their hedge books?  These mining companies should have been wiped out.

But they are still alive today just like nothing happened.

Same thing with the banks, all will settle and pay billions, but nothing bad is going to happen to them.  Bank of America will probably be here for the next 100 years, after brushing with bankruptcy and insolvency at least 3 - 4 times during that period.

Tue, 06/28/2011 - 19:39 | 1410331 The Fonz
The Fonz's picture

It's my opinion that Bank of America will be fed to the other banks. Also there is a need to "address" the fruad in the system. The other banks will back this kind of "change" for the better, and the poltical capitol is required to move forward with the effective pilfering of the people. All theorys and guesswork :)

Tue, 06/28/2011 - 20:01 | 1410362 Careless Whisper
Careless Whisper's picture

@ robo

mister market is talking. are you listening? take a look at the 3 month charts of GS MS BAC JPM. a story is being told by the market and it's not pretty.


Tue, 06/28/2011 - 22:37 | 1410590 Tater Salad
Tater Salad's picture

Agree whole heartedly Carless Whisper, but you should go back to doing what you do best...sucking cock.


Tue, 06/28/2011 - 19:54 | 1410354 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Those miners paid cash to unwind loan positions so they would not have gold hedged, because hedging gold is stupid with a rising price, because the said miners would be paying spot after loaning the physical under it.   After relieving their hedge positions they can keep the physical and thus they would benefit from a rise in the price of physical; and you are comparing that action to the fraud of BAC which is ridiculous.

Tue, 06/28/2011 - 20:05 | 1410369 duncecap rack
duncecap rack's picture

I'm with you. I thought it was like comparing apples to can openers too.

Tue, 06/28/2011 - 19:33 | 1410320 treemagnet
treemagnet's picture

Fuck yeah!

Tue, 06/28/2011 - 19:39 | 1410323 macholatte
macholatte's picture

If BofA is TBTF then once again the American taxpayer is going to get it up the ass. Didn't I read something about kleptocracy?

 It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay.
Ralph Waldo Emerson

Tue, 06/28/2011 - 19:44 | 1410333 cat2
cat2's picture

wow that's some real money

Tue, 06/28/2011 - 19:46 | 1410336 sasebo
sasebo's picture

Very interesting. The panjandra fighting among themselves? 

Tue, 06/28/2011 - 19:59 | 1410358 Downtoolong
Downtoolong's picture

Bank of America vs. BlackRock, Pimco, MetLife and the Federal Reserve. It’s like Clash Of The Titans. Quick, get me my 3D glasses and some popcorn.

Actually, I feel a bit more like one of the extras in those films who you barely even notice being inadvertently squashed by a titan’s tail while they battle to the end. 

Wed, 06/29/2011 - 05:06 | 1410927 Urban Redneck
Urban Redneck's picture

The big guys get their checks (lifeboats) first, when the little guy comes along, the courts will just say- "sorry (systemic risk and all) none for you, now be on your way"

Tue, 06/28/2011 - 20:22 | 1410398 Downtoolong
Downtoolong's picture

Meanwhile, in a corner office at BofA headquarters, someone is sitting alone in a quiet rage sticking pins in a voodoo doll that looks eerily like Angelo Mozilo, complete with skin made of old orange peels.

Tue, 06/28/2011 - 20:46 | 1410429 The Fonz
The Fonz's picture

I have an account with BAC actually, a few years ago they reversed the order of all my transactions over a weekend to generate 16 bouncy check charges which I refused to pay. At that point I began buying gold to save money, which led to investing. Ironically after I made a bit of money investing I needed a bank acct to get it. I had to go back to BAC and pay those charges... even though they are being sued for that practice. The VP who reopened my account was VERY VERY scared about her retirement, her hands were shaking.  I told her I would not be putting large sums in the bank becuase I didn't think BAC would survive the next few years. This was an interesting disussion while she worried her company would crash and leave here with nothing she unblinkingly took all of those "owed" moneys. She genuienly didn't give it a moments thought, she just worried she would lose her 401k lol.  This happened about two months ago, I was proud of keeping my poker face for that interaction.  BTW I need to sign up for that class action suit to get my fees back... and find a bank that isn't going to fail?!? lol.

Tue, 06/28/2011 - 20:35 | 1410412 steve from virginia
steve from virginia's picture

Too soon, kids. (Sit down Brooksley).

You can be too far ahead of the curve.

Things aren't serious yet, the market hasn't spoken.

When it does there will be a run out of B o' A. That's what did in Wachovia.

Run to? JPM and the regionals. Time is running out for BAC, the bondholders just signed their death warrant. Better to take $8.5 b when it can be had and not take $30 billion later.

Tue, 06/28/2011 - 21:59 | 1410534 spinone
spinone's picture

I guess they'll need another bailout.

Tue, 06/28/2011 - 22:09 | 1410544 DavidC
DavidC's picture

Shame it wasn't Goldman Sachs.


Tue, 06/28/2011 - 22:27 | 1410576 Tater Salad
Tater Salad's picture

Tyler, did you ever do any time for your insider trading charges?


Just askin...

Tue, 06/28/2011 - 22:45 | 1410598 michigan independant
michigan independant's picture

GSE’s and the Community Reinvestment Act (CRA). GSE’s are otherwise known as ‘government sponsored enterprises’. The GSE’s involved in the recent bubble were Fannie Mae and Freddie Mac. These two ‘enterprises’ were backed by the federal government. This began under Carter and was expanded under Clinton and Bush. The Community Reinvestment act was supposed to address lending discrimination practices " that was dispelled in the courts about discrimination practices". It was used by Clinton and Bush to artificially increase home ownership in America. The CRA simply turned into legislation mandating that banks begin lending to borrowers that did not have the ability to repay the loans. The reality is that we haven’t seen a free market economy since the creation of the Federal Reserve (1913)

Wed, 06/29/2011 - 00:05 | 1410724 wisefool
wisefool's picture


Very good information. I guess when the Cold War ended we needed to employ people doing something. Which I agree with. But it was probably a little to heavy handed and not really that well thought out considering that the Baby Boomers would have been, and are downsizing thier housing needs instead of expanding them.

Weren't both greenspan and bernanke economists who should have factored generational demographics into monetary and fiscal policy re: housing?

*I am not opposed to the Fed (government or reserve), nor am I against PMs. Isn't there something in the middle that has worked? Or is that the scapegoating we are doing to the Banks?


Tue, 06/28/2011 - 23:29 | 1410688 goldencross10
goldencross10's picture

I love those out there who say BAC is cheap and trading below tangible book, people hate it because it has had this Countrywide overhang for 3 years, in this kind of mkt right now where we really don't know what will happen tomorrow, you want yield to secure gains; looks to me that BAC pays what 4 cent yield on a $11 stock, yep pile of crap to me, better things out there move on. 

Wed, 06/29/2011 - 00:06 | 1410726 agNau
agNau's picture

I am sorry but I must correct here. That settlement will be payed with MY money, and yours, and yours, and yours,........ "BIG BENNIE WILL CONTINUE TO LOAD THE TILLS WITH BILLS!" Kinda like that one don't you?

Wed, 06/29/2011 - 01:22 | 1410813 laughing_swordfish
laughing_swordfish's picture

They are just figuring out a way to shove the 8.5B onto the taxpayers

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