Moody's Puts BofA, Wells Fargo And Citi On Downgrade Review: Cites Risk Of No Government Support, Mortgage Exposure As Risks

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Thu, 06/02/2011 - 09:52 | 1332062 SheepDog-One
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I thought this was confirmed to be absolutely impossible after 'Man of the Year' SAVED us all. Banks totaly healthy, economy confirmed recovered, prosperity far and wide across the fruited plain....all is WELL! 

People believe we'll just keep printing to infinity and its all good...I see a huge kick in the nuts coming suddenly.

Thu, 06/02/2011 - 11:14 | 1332350 weinerdog43
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I read stuff like this and get this sick feeling in my gut.  One does the best they within your means, avoid most debt, try to save a little something, keep some metals, etc...  Unfortunately, no one knows when this is all going to blow up and what the best roadmap for survival is going to be. 

Sometimes, I really wonder if I would have been better off HELOCing the heck out of my house, bank it in silver/gold and then walk away.  Stupid me I suppose for paying my debt.

Thu, 06/02/2011 - 12:10 | 1332599 Dolemite
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Man of the year hahaha laugh every time I read that....

Risk off btw?

Thu, 06/02/2011 - 09:49 | 1332063 Seasmoke
Seasmoke's picture

i hardly ever hear it mentioned, but the banks HELOC loans are as good as worthless and i do not see anyway out for them

Thu, 06/02/2011 - 09:56 | 1332083 A_MacLaren
A_MacLaren's picture

Taxpayers to the rescue?

Fed Buys Bankster crap, uses US Trashury Notes and Bills for income to offset the losses from the crap HELOCs it now owns.  Losses transfered to the taxpayers as even less seniorage and excess of income over Fed oper expenses is remit back to the Treasury.

Thu, 06/02/2011 - 10:36 | 1332207 MachoMan
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Actually, depending on how screwed up the paper work is on the first mortgage, second mortgages might actually be able to be enforced.

Thu, 06/02/2011 - 09:51 | 1332069 Madcow
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As time goes on, wages and incomes will fall as the economy stagnates – while the purchasing power of wages and incomes falls steadily.  That’s not “hyperinflation.”  More like “hyper-bankruptcy”

Thu, 06/02/2011 - 10:16 | 1332128 Life of Illusion
Life of Illusion's picture


You mean they won’t get any more funds to support country wide toxic assets!

Will they finally be forced to mark to market housing inventory?

Liquidate the inventory, clear the system. They managed to cluster fuck it enough, time to move on.

Force liquidation, If not expect a slow long term inflated no growth economy with asset prices overvalued. Reset, Restructure!


Thu, 06/02/2011 - 09:51 | 1332072 FOC 1183
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QE3 Blackmail

Thu, 06/02/2011 - 09:59 | 1332081 NotApplicable
NotApplicable's picture

I'm hoping for the "hold their breath" trick.

Thu, 06/02/2011 - 09:52 | 1332074 NotApplicable
NotApplicable's picture

TBTF at risk?


Thu, 06/02/2011 - 09:56 | 1332085 Caviar Emptor
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QE3 or whatever else they might call it is on the way for final signatures. Fisher talked about it just this AM

Thu, 06/02/2011 - 10:43 | 1332222 MachoMan
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I think they're too scared to let the markets fall sufficiently/let the dollar appreciate significantly to have the downturn be successful at repriming their methods and help reset diminishing returns...  Obviously they can't keep it up in perpetuity, but still...

Thu, 06/02/2011 - 09:59 | 1332095 Stoploss
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LOL!! Gov't support now seen as risk. Downgrades based on lack of monetization all but ensures QE 3. Banks jumped the shark, and turned the tide. Gold is turning into Johnny Holmes, that shit just won't go down.

Thu, 06/02/2011 - 10:04 | 1332100 staks
staks's picture

Shot over the bow... with a water pistol

Thu, 06/02/2011 - 10:01 | 1332105 firstdivision
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This was released just to drive down financials (which in turn drives down all markets).  It is in the banks interest to have QE3 offically announced.  They are addicted to free money.

Thu, 06/02/2011 - 10:41 | 1332215 Problem Is
Problem Is's picture

Yup... 2010 pre-QE2 replay... We keep falling for the same sucker play... they keep calling it out of the same play book...

Thu, 06/02/2011 - 11:46 | 1332499 NotApplicable
NotApplicable's picture

Who is this "we" that is being suckered.

This is an outright power-play beyond our control. We might be victims, but it's hard to consider anyone a sucker when there's gun-backed enforcement of legal institutional machinations where no one individual is responsible for the outcome.

In this scheme, the only suckers are the voters who insist upon supporting such a violent system in the (false) hope that once they can get their version of a benevolent dictator installed, everything will be better. Well, that obviously ain't gonna happen, as evidenced by every US Pres. since JKF last made the attempt.

Wall St. owns the apparatus of power. Other than participation in the polarized, divide and conquer special interest groups (feel-good destructivism), "we" have little say in the matter.

Thu, 06/02/2011 - 10:07 | 1332108 hamurobby
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Im having a GREAT morning.

Thu, 06/02/2011 - 10:09 | 1332114 I am a Man I am...
I am a Man I am Forty's picture

me too!

Thu, 06/02/2011 - 11:20 | 1332112 fuu
fuu's picture

Well thanks Captain Obvious!

Thu, 06/02/2011 - 10:12 | 1332118 augie
augie's picture

wasn't robo'nuts telling us to buy bank stocks the other day? I'm gonna start fading his advice.

Thu, 06/02/2011 - 10:15 | 1332125 SheepDog-One
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RainbowTrader is the ultimate fade signal. Whatever he mentions within 24 hours plummets.

Thu, 06/02/2011 - 10:12 | 1332127 cxl9
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These actions had no impact on the FDIC-guaranteed debt issued by these firms, which remain at Aaa with a stable outlook.

Ah, good. So the printing presses still work, then.

Thu, 06/02/2011 - 10:14 | 1332131 jkruffin
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Wow, an insolvent bunch of banks, who coulda thunk it?

Thu, 06/02/2011 - 11:50 | 1332518 NotApplicable
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Technically, either they all are, or all aren't, depending on how one views their privileged legal operating status.

It's a repeat of the Emperor's New Clothes. A bank is solvent only because Sheila says so.

Thu, 06/02/2011 - 10:17 | 1332132 staks
staks's picture

Seee - Seee. See what will happen if you take your support away Mr B. They can not stand on their own - they are handicapped and will not survive without constant spoon feeding.

Thu, 06/02/2011 - 10:25 | 1332157 Careless Whisper
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A Moody's downgrade of entities that are failing because they sold products based on Moody's ratings. That hurts my brain.

Thu, 06/02/2011 - 10:38 | 1332199 Problem Is
Problem Is's picture

+5... Biting commentary...

Thu, 06/02/2011 - 10:27 | 1332172 chunga
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I'd like to know who rates Moody's. They should have downgraded themselves a long time ago.

Thu, 06/02/2011 - 10:34 | 1332195 Problem Is
Problem Is's picture

Everybody but JPM... funny how that works, aye Jamie??

Thu, 06/02/2011 - 10:42 | 1332219 FreeNewEnergy
FreeNewEnergy's picture

BAC approaching the Nov. 30 low (closing) of 10.92. Break that and it's a straight shot back to 6 and the closing low of 3.12 (March 6, 2009).

BAC has been quite the underperformer for nearly three years running. Wondering why this entity is still in business as one enterprise. Breakup value probably exceeds current market cap... oh, those mortgage defaults and related legal costs? Spin that off into a "bad bank" and take it straight to bankruptcy court. That would solve almost a third of the entire banking sector's problems.

Cut the big mole right off the face of banking and banish it to Hades forever. More than enough time and money has been spent trying to salvage BofA. It's now to to recognize the losses and move on "for the good of the country."

BofA thought they made a smart deal buying Countrywide for pennies, but did not do their due diligence. Either that or they were forced to take it over by the Fed, fearing systemic collapse.

It's pretty clear that CW has destroyed the better parts of BAC and should be spun out, hung out, sold off or just plain deposited in the nearest black hole.

Thu, 06/02/2011 - 10:49 | 1332243 FreeNewEnergy
FreeNewEnergy's picture

Haven't looked at such things in about two years, but there is pretty large open interest in BAC 10 and 11 puts for July and August.

The shape of things to come?

Thu, 06/02/2011 - 11:14 | 1332338 Electric Head
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"The U.S. Governments intention under Frank-Dodd is very clear...Going forward, It does not want to bail out even large, systemically important banking groups."

Yeah, Right! Is their even the beginings of a plan to let these important failed banking instituitions be desolved through the public court system?!

Thu, 06/02/2011 - 12:01 | 1332553 nathan1234
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An insolvent set of banks, insolvent countries and what is happening?

Gold and Silver being hammered down when they should be zooming up.

I guess when crooks run the system nothing works the way it should.


Thu, 06/02/2011 - 12:09 | 1332608 bpoint
bpoint's picture

I just got a letter from Fannie Mae saying they bought my mortgage from BofA.  I love some of the language they used in the letter.  "Fannie Mae is a shareholder owned company with a public mission.  We do not make mortgage loans but instead provide funds to lenders by purchasing the mortgage loans they make." 

This last bit was what I liked the most..."The transfer of ownership of your mortgage loan to Fannie Mae has not been publicly recorded." 


Thu, 06/02/2011 - 14:27 | 1333301 zaknick
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Big Sis Napolitano will rescue you!!!

Do NOT follow this link or you will be banned from the site!