Bank of America
Paulson and David "Balls to the Wall" Tepper just can't catch a break these days...
William Black Tears Larry Summers Apart, Again Calls Out Obama To Place Bank Of America In ReceivershipSubmitted by Tyler Durden on 10/28/2010 12:36 -0400
William Black continues with his campaign to not only bring sanity and transparency to an administration wrapped in secrecy, legacy cover ups and fraud, but to finally do what had to be down two years ago: bring down the big banks, force a balance sheet restructuring at the TBTFs, and force a systemic reset which is the only thing that could bring the much promised "change for good" to this country. " Don't talk about doing the right thing -- do it -- and do it to a major contributor. Don't do it because it's a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership." We once again hope that more people like Bill Black (if not he himself) will decide to run for president, and make the difficult choices necessary to begin the impossible task of truly fixing the mess this country finds itself in.
A Paralyzed Fed Defers Decision On Monetary Policy To Primary Dealers In An Act That Can Only Be Classified As TreasonSubmitted by Tyler Durden on 10/28/2010 00:23 -0400
As if there was any doubt before which way the arrow of control, and particularly causality, points in America's financial system, the following stunner just released from Bloomberg confirms it once and for all. According to Rebecca Christie and Craig Torres, the New York Fed has issued a survey to Primary Dealers, which asks
for suggestions on the size of QE2 as well as the time over which it would be completed. It
also asks firms how often they anticipate the Fed will re-evaluate the program, and to estimate its ultimate size. This is nothing short of a stunning indication of three things: i) that the Fed is most likely completely paralyzed due to the escalating confrontation between the Hawks and the Doves, and that not even Bernanke believes has has sufficient clout to prevent what Time magazine has dubbed a potential opening salvo into a chain of events that could lead to civil war: in effect Bernanke will use the PD's decision as a trump card to the Hawks and say the market will plunge unless at least this much money is printed, ii) that the Fed is effectively asking the Primary Dealers to act as underwriters on whatever announcement the Fed will come up with, and thus prop the market, and, most importantly, iii) that the PDs will most likely demand the highest possible amount, using Goldman's $2-4 trillion as a benchmark, and not only frontrun the ultimate issuance knowing full well what the syndicate of 18 will decide in advance of what the final amount will be, but will also ramp stocks on November 3 to make the actual QE announcement seem like a surprise. This also means that the Primary Dealers of America, which include among them such hedge funds as Goldman Sachs, such mortgage frauds as Bank of America, such insolvent foreign banks as Deutsche, RBS, UBS and RBS, and such middle-market excuses for banks as Jefferies, are now in control of US monetary, and as we explain below fiscal, policy.
Investors Holding Voting Rights In More than 2,600 MBS Deals Prepare To Fight Back Against ServicersSubmitted by Tyler Durden on 10/27/2010 17:12 -0400
“We found servicer defaults in 100 percent of the trusts”
Two weeks ago we first touched upon a key tangential topic of the whole mortgage mess, namely the implication of what potential MERS fraud means for Commercial Mortgage Backed Securities. Well, the topic which has so far avoided broad media attention to the benefit of all CMBS holders may be about to go mainstream. As part of our initial inquiry, we asked: "If residential mortgage foreclosures are being halted and if the very fabric of the MBS securitization architecture is put into question, when will someone ask whether MERS® Commercial allowed such pervasive title fraud as is now apparently ubiquitous in the residential space, to take the CMBS space by storm, and how many billions in dollars will Banc of America Securities, Bear Stearns (d/b/a JP Morgan), GE Capital Real Estate, GMAC Commercial, John Hancock and Wells Fargo be forced to buy back loans that were fraudulently certified." Our question is now being reiterated by Barclays Capital. Next up Bloomberg, Ratigan, and everyone else.
We have long noted that Goldman's feigned change of heart to eliminate its prop desk is nothing but a sham, as the very same traders will continue pursuing principal strategies but merely be given the additional layer of protection that they are "client facing" i.e., make fake flow markets. Today, Michael Lewis confirms this speculation, and identifies precisely how not only Goldman, but all banks are abusing Frank Dodd using legalistic loopholes that do nothing at all to change the actual role of the principal trader, whose existence has always been predicated upon accumulating positions primarily in OTC products (nobody makes money trading stocks any more) and selling when the firm so desires.
Bernanke's transfer of capital from savers to corporations, courtesy of now perpetual ZIRP and trillions in upcoming QE, has made corporate refinancing for high grade companies a no-brainer. With Goldman issuing 50 year bonds at just over 6%, one can be sure that many companies will take the inflation call option and continue to refi existing IG debt into ever lower yields, courtesy of schizophrenic investors who are betting on both inflation and deflation (why else would someone lock up capital for 50 years even as the S&P trades at 2010 highs?). However, in addition to merely refinancing, banks are now also also eagerly incurring new debt for shareholder friendly activities. So what does that mean for investors who are obviously much more comfortable with putting their capital into bonds than stocks (23 weekly outflows from mutual funds)? Well, there's an arb for that.
Bloomberg responds to the Kleptocratic House Association
- Fed's `Pit Bull' Takes on Bank of America in BuyBack Battle (Bloomberg) - "Kathy Patrick can be as frightening as a pit bull on steroids."
- High US Unemployment, Chinese Growth May Spur Trade War (WSJ)
- Japan's Igarashi Says Yen Sales Most Effective When 'Surprise' (BusinessWeek)
- Debt Sales Highlight Abnormal Conditions (FT)
- Asia's economic history foretells Chinese slowdown (Reuters), compare to Is China's Growth Rate Destined To Be Cut In Half? (Zero Hedge)
- End Bailouts—No Ifs, Ands, or Buts (BusinessWeek)
- Malcolm Gladwell: Who really rescued General Motors? (New Yorker)
- Meet the leading contender to manage Berkshire's billions (Fortune)
- Greece Likely to Default Within Three Years, El-Erian Says (WSJ)
Timmy took a big doo doo on the rest of the World as he pressed fellow Finance Ministers into (in theory) setting mechanisms to address trade balances (which means export countries need to strengthen their currencies against the dollar) while importing countries (like US) should not try to manipulate their own currency. Well, that sounds reasonable EXCEPT, before the ink is even dry on the G20 release, Timmy flies off to China to get them to commit to revalue the Yuan...
Bill Black, who will soon, together with Neil Barofsky, be a guaranteed shoe-in for the POTUS/VP position (both as independents, of course), was on the Ratigan show today, following on his op-ed from last week (here and here) calling for the long-overdue nationalization of Bank of America, and discussing the rampant fraud at the heart of mortgage gate. And contrary to ongoing lowball estimates from the like of JPM and Goldman, Black provides numbers about the bank liability that are simply stunning: "Credit Suisse says that by 2006 49% of all mortgage originations were liars loans. When independent folks study fraud, it is in the 80-90% fraud range. That means there were millions of acts of fraud. Those loan frauds occurred because the banks created incentive structure for the loan brokers to bring them the absolute worst of the worst loans, and to lie on the application forms... These frauds came from the banks, and they propagated through the system through a series of echo epidemics...This fraud spread through the system and that's why we have a crisis in foreclosures. This stems from the underlying fraud by the lenders in mortgage loans to the tune of well over a million cases a year by 2005."
Adding more fuel to the fire of SIGTARP's criticism of Tim Geithner is today's announcement that in September the UST started on a mere 27,840 permanent mortgage mods under HAMP: the lowest amount since November 2009, and a 17% decline from the 33,342 in August. It is rather obvious that HAMP bank mods peaked in April at 68,291 and have been trending lower back ever since. And with banks having the ability to foreclose upon and engage in who knows what shady dealings, now that it is all too clear that nobody really owns mortgage titles, and thus allowing banks to double, triple, etc-pledge the underlying collateral making far more money on a foreclosure action than a HAMP mod, it is time to declare HAMP a failure and relegate it to the mountain of failed economic policies pursued by the Obama administration, which have done nothing but result in yet another record bonus year for Wall Street.
Get Bernanke's answer...
Here is an example of how the blogosphere is destructive to the cataclysm that is the US economy: we present the truth. To wit: Fitch Ratings has placed the 'F1+sf' ratings on three Bank of America N.A.-sponsored ABCP conduits on Rating Watch Negative. Next up: all of BofA's MBS conduits to be downgraded on complete legalese vacuum on pervasive fraud.
A Step by Step Guide to Exactly How Much Derivatives Risk Each of the 5 Big Banks Actually Have, and How It Could All Go Boom!Submitted by Reggie Middleton on 10/25/2010 14:13 -0400
Blogs, Banks, Derivatives Risk and the Fiery Sword of Truth: This One Has It All - Even a step by step guide to the TRUTH!