BofA To Extend Discussions With Pimco, New York Fed, Seeking Settlement Over $47 Billion In Putback Claims

Tyler Durden's picture

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
SilverRhino's picture

Looks like it boils down to who has more judicial pull, PIMCO or BoA.  


DoChenRollingBearing's picture

SilverR, yes indeed.

Who has the better corruption levers:

Bank of Amerika



Hmm, that´s a toughie.  We´ll just have to wait and see.

TheProphet's picture

Did you forget the NY Fed?

Bob's picture

Yeah, it looks like NY Fed + Pimpco = short end of stick.

pamriallc's picture

not going to happen.  like madoff whose investors were asked to forgive their "ill gotten gains" as part of their 25 year affiliation, PIMCO will be asked to leave the room due to their unprecedented gains over the years while interest rates plummeted and they created excess returns by leveraging their position in the debt markets.

18-24 months ago we used to own a lot of BAC preferred equity and finally we're now selling the corp. debt plus the TRUP shares and wading into the common equity at 60% of book value.  it's a max 3.5% position vs an entire portfolio that if we're right--- and we think so...  could be a 10-12% position in 5 years due to appreciation.  they're going to be fully hedged as interest rates creep back up and as such, they're going to make a lot of money.

don't blame gross for trying, but when the BAC attorneys get fired up, PIMCO will sadly take far less away than they intended.

Shawn A. Mesaros, Pamria, LLC

traderjoe's picture

How are you calculating BV - with their financial statements? Hahaha.

IQ 145's picture

 yeah; god only knows; a crystal ball would work just as good.

Ragnarok's picture

Good, I was beginning to think people forgot.

Id fight Gandhi's picture

And stock is up ah on this? Pfft.

Extend and pretend. Bankstas!

Mr Lennon Hendrix's picture

Dum dee dum dum...dum dee dum dum DUMMMB!

Cdad's picture


Really, Tyler.  Would it kill you to do an article on the new trend in self-gifting?  You could include some sweet footage of Victoria Secret models, as apparently that is the epicenter of self-gifting.

You see, then I could finally have my already very late morning constitutional.  But no...on to criminal syndicate Wall Street bank issues.


SheepDog-One's picture

I wish I could self gift myself a couple Victorias Secret models!

mynhair's picture

BAC should be up at least 3% tomorrow on this news. 

What, somebody wants to sell those shares I shorted?

Cdad's picture


Of course it would rally on news that would call into question its very solvency as a criminal syndicate Wall Street bank...of course.  It is all part of what needs to happen, at least in the VERY short term, as said criminal syndicate Wall Street bankers arbitrage to death everything on the surface of the planet on their way to the bank with $100 million in bonus payments.  Think of it as economic stimulus.

But alas, in the end, it WONT be good for BAC...and I am one of many, I expect, that believe BAC WILL NOT SURVIVE in the long run...because it is so rank with corruption and law breakers that its meat is literally falling off those zombie bones.

traderjoe's picture

Cdad - enjoyed your posts of late. 

I too think BAC is toast.

Cdad's picture

Thank you Joe,

I will probably be joining you on that BAC short position before long.  I am just waiting for my ship to come in on being negative on $9 burritos and even more negative on stocks with PEs over 250...which still makes me lolololololol.  Also, I have to wait for the zombie drug company stock I'm short, which cannot get any of its drug ideas past the FDA...which I thought was bad news...I'm still waiting for it to discover that it has a bleak future.

And since the market has arrived at an inflection point, as well as having arrived at being priced for stupid, I expect I'll be posting a lot until the truth of things somehow gets broader traction.  This IF Tyler slows down even just a little, tossing a bone here or there, something with racy women in it that I can that I can rehydrate and tend to other necessary bodily functions...sheesh.

But we'll see....

Good luck out there, Joe.


SheepDog-One's picture

Come ON Mr Market!! Just ONE more tiny wafer thin mint hmmmmm???

traderjoe's picture

Priced for stupid. Love it. Full disclosure, I actually like Chipotle's tacos, and can escape out of there for sub-$6. The stock is simply baffling though.

I'm done with trading. I picked my moniker as a dummy name that I created to flame PALM stock on the Google Finance boards where the pump monkey's thought the PRE would beat the iPhone. Oops.

I've been around the markets for 20+ years. I've never seen it so stoopid. It's all the theater of the absurd now. On a day when riots are breaking out all around Euro-land, the market drops all of 21 dow points.

I'm somewhat convinced when BAC goes to $0 during the upcoming bank holiday, I'm not so sure having shorts will help (IMHO). You'll only get paid back in worthless FRN's. Even though I think shorting the 30-year UST would be the trade of the century - I just don't think you'll get paid off when you win. Sure missed a move recently though - a 2x on a short UST in 6-8 weeks or so. I'm positioning for the other-side. Some might call me a doomer. :)

I'm removing my consent from the system. Downsizing, converting to physical PM's, and educating the people when I can. The banksters don't get to skim off my FRN's no more.


Cdad's picture


I was on the TBT during this bond insanity...but I pulled off it too soon because the vol was pretty wild.  That is some bad mojo forming in the bond market.

As for those really expensive burritos, ummmm, well the problem of input costs are about to meet the problem of MASSIVE INSTITUTIONAL EXPECTATIONS only to be resolved in thin tape...which I am quite sure is going to be a touch problematic since I don't think they have ANY pricing power.  As for baffling, I just pull up a KKD chart to remind myself of where it is headed.  Enjoy the tacos...I won't hold it against you.

And as you correctly point out, the only chart that needs really close monitoring right now is the EUR/USD chart.  I noticed Nic just featured it.  That is all anyone needs to know about the rest of this week.  'Cause I don't think flaming Greek people [literally] on the streets is "Priced in"...despite my comment otherwise in another thread.

We live in interesting times, Joe.

StychoKiller's picture

Kinda gives new meaning to "Hot Buns" don't it?! :>D

hdunn2's picture

Ridiculous. Just like last week when the settlement over munis came down and a HUGE rally followed..

Except this time some tiny $100m settlement won't make the problem go away.

Peoples ignorance and stupidity makes me sick.



erik's picture

It is up 2.5% in after hours so far

ewmayer's picture

When I saw Exhibit A, for a brief moment I thought ZH had gotten a leaked copy of page 1 (of 207) of the Fed's MBS holdings summary.

Spitzer's picture

Peter Schiff just had a fairly good scrap on Fast Monkey.

Mellisa Lee looks like a Japanies call girl today, yum yum.

downrodeo's picture

y'know, i'm surprised that CNBC has never come out with a calendar. the money they could make would be enough to... well, i'm sure they could do something with it...

erik's picture

Calculated Risk has a great piece on how Republicans are trying to blame the entire financial crisis on the government.  They are trying to get the words "Wall Street" and "shadow banking" removed from the final report.


Greenweather's picture

That's simply repulsive.

Ned Zeppelin's picture

Republicans prove time and again they are the willing oral pleasure providers to the wealthy elite.  They should wear Brooks Brothers bibs considering all the work they do. 

jal's picture


The fraud was perpetuated on all those juicy funds. The poor j6p was used by the banksters to enable the fraud. The funds had all the money for the taking NOT your dumb neighbor. 


Its time for the fund mgr to hire an evaluator to go around to all of "their" properties and do a PHYSICAL inventory and evaluation of THEIR HOLDINGS. 


GEE! They might find out that they are holding an empty bag and that they are entitled to "putbacks" and that the banksters will have fines and taxes to pay.



max2205's picture

Will the fed sneak um a check through aig? BAC should scream when this is done. Right?!?

erik's picture

BAC settlement = acknowledgement of guilt

Is the justice department paying attention?

jal's picture



Dated: New York, New York 

December 1, 2008 





and QED LLC, on behalf of themselves and all 

other persons similarly situated, 








Index No. 



Plaintiffs allege: 

1. To settle allegations of widespread predatory lending made against it by 

the Attorneys General of atleast 15States, Countrywide Financial Corporation has 

agreed to reduce payments due on hundreds of thousands of mortgage loans by a total of 

up to $8.4 billion. Most of these loans are owned not by Countrywide, but rather by trusts 

to which Countrywide sold the loans in the process of securitization. To pay Countrywide 

for the loans, those trusts in turn sold securities (often called “certificates” and sold in 

different classes or “tranches”) to investors. Countrywide plans not to absorb the $8.4 

billion reductionin mortgage payments itself (even though it was Countrywide’s own 

conduct of which the Attorneys General complained in the proceedings that Countrywide 

has now settled), but rather to pass most or all of that reduction on to the trusts that 

purchased mortgage loans from Countrywide. If the trusts are forced to absorb the reduction in payments occasioned by Countrywide’s settlement of the allegations against 

it, then the value of the securities that those trusts sold to investors will decline. 

2. This action relates to two series of Countrywide securitizations known as 

the CWL series and the CWALT series. 

3. Bythis action, plaintiffs seek a declaratory judgment that, under the 

agreements that govern the administration of the loans that Countrywide sold to trusts in 

these two series of securitizations (including the trust that issued the securities that 

plaintiffs own), Countrywide is required to purchase every mortgage loan on which it 

agrees to reduce the payments.




beastie's picture

So the bottom line is BAC will have to step up the foreclosures in order to cover it's ass with enough cash flow for put backs and every destitute pleb in this country has to foot the bill again. 

Banks extend and pretend with assistance from Ben and Timmy. How is the destitute public going to extend and pretend? 

Talking with a real estate lawyer yesterday and he gave me two horror stories he is dealing with. They are personal friends as he doesn't normally deal with the seedier side of real estate.

2006 One million dollar home the banks wouldn't allow a short sale on eventually went into foreclosure as the home owner just gave up trying to deal with the bank. The pipes froze last winter. As it stands right now it's a complete gut job and worth 500K on a good day. Except the bank is still looking for at least 800K on it. The homeowner bought a new place in Florida. 

Second, is a personal bankruptcy after homeowner signed off in 2006 for a 680K mortgage. The home owner swore they were responsible with the 180K they took out in quity. They paid their mortgage for another 4 years @ a readjusted rate of 9% and paid off their credit cards. Money gone. House gone and the guy is pushing the Lawyer to hurry up and file the bankruptcy because he wants to buy a new car. Livin' the American dream.

So two short term gains for the banks have ruined a few FICO scores and two houses sit empty and will be worth only the land value after a harsh winter. 

The smart people will thrive or at least survive in this environment. The rest will be bled dry of all assets while they try to muddle through. 

tony bonn's picture

boa has the most arrogant asshole staff in  the universe....i would greet its demise with glee....

fuck boa.

0321_GUY's picture

This is an easy one.  PIMPCO is owned by Allianz, a big German company.

  "In North America several companies with specialized expertise operate under the roof of the Allianz Group. Property & Casualty Insurance is provided by Fireman's Fund, Life Insurance and Healthcare Risk Management by Allianz Life, and Asset Management by Allianz Global Investors' network of companies, such as PIMCO, Nicholas-Applegate Capital Management and Oppenheimer Capital."

I'll bet on black here with PIMCO aka D/B/A Allianz

greenewave's picture


Then Watch the YouTube Video “AMERICAN DREAM DEAD ~ DENIAL, THEN PANIC” at (


It’s time you STOPPED getting SCREWED by the BIG RED WHITE and BLUE !!

Ned Zeppelin's picture

Things really will get interesting as soon as the sharks realize there are no more prey, and have to instead turn on each other. 

Everyman's picture


That is what I have been waiting for.  IF all of them have the money, then they have to start screweing each other.

Fearless Rick's picture

Money is the last enemy that shall never be subdued. While there is flesh there is money or the want of money, but money is always on the brain so long as there is a brain in reasonable order.Samuel Butler

Fearless Rick's picture

Methinks Bank of America may be in need of a name change soon. Might I suggest, "Bank that Screwed America"

Buck Johnson's picture

Help me with this, I'm very confused.  Why is PIMCO and the US govt. via Fannie and Freddy and a few others going after BOA for redemptions.  They would have to know that BOA is essentially insolvent, why force this into the open bringing the system down?