With everyone focused on whether or not the Build America Bond program will be extended (it appears it won't, and is the main reason for the market weakness today), after rumors earlier that the program may not be part of the negotiated extension (and why not? It's not like republicans are suddenly pretending to be fiscally prudent, after pushing the latest addition to the welfare state that will cost $5 trillion in future debt) we now learn that pathological nest of infinite criminality better known as Bank of America has again settled a new SEC fraud charge, this time relating to its municipal securities program. According to Reuters headlines, the SEC has sued Bank of America Securities with fraud in connection with allegations of improper bidding practices involving municipal securities. But heaven forbid the SEC would settle on anything more than a, well, settlement: just as the charge was announced, so was the settlement, and we learn that BofA has agreed to pay more than $36MM in disgorgement, and that is and affiliates to pay another $101MM to Federal and state authorities. SEC wristslap... and the bank can go bank to stealing.
And while we go back to pretending we have a market regulator, here is the latest on the BAB situation from the WSJ:
Extension of the Build America Bonds program isn't included in a wide-ranging tax agreement between President Barack Obama and Republican congressional leaders, Senate aides said.
The Build America Bonds program provides federal subsidies for taxable bonds issued by state and local governments. It is set to expire Dec. 31, but won't be part of a broad outline agreement to extend expiring income tax breaks that Mr. Obama announced Monday evening, according to senior Democrat and Republican aides.
It is possible the bond program could be added in subsequent negotiations as the tax package is finalized, but that is unlikely due to Republican opposition.
Build America Bonds came to the market in the spring of 2009, aiming to provide state and local governments with a lower-cost way to finance capital projects. More than $150 billion of the bonds have been issued to help finance projects including upgrades to Alaskan airports and to school, water, sewer and electric facilities across the country.
In other words, Bernanke's monetization of all municipal bonds is now just around the corner.