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Fed Lies On The Record To Protect Bank Of America, Pulls Testimony

Tyler Durden's picture




 

In late 2010, in a superficially stunning move, Bank of America was sued by, among many others, the New York Fed over the biggest bogeyman for the bank's balance sheet - its legacy portfolio of super toxic Countrywide mortgages it inherited in the worst M&A deal of all time (its purchase of CFC) and the inheritance of woefully inadequate mortgage issuance standards which ever since then (recall our prediction on this issue) has cost the bank billions in litigiation payments and reserves.  Obviously, the Fed had no concerns about collecting the money it itself creates, and it certainly doesn't care about legality and criminal financial impropriety, so why was it among the list of plaintiffs? Simple: as we suggested back then, and as has since been proven correct, it was simply so that Bill Dudley's henchmen have a first row view of everything going on in the putback litigation that has been the primary concern for BofA, but with a few of keeping the damage to a minimum. Sure enough, Ever since then the Fed has done everything in its power to mitigate potential losses to BofA as a result of Agent Orange selling hundreds of billions in biohazardous mortgages to anyone and anything with a pulse. It has gotten so bad that the Fed was last week caught lying under testimony, forcing the Fed to take back testimony in a parallel lawsuit between AIG and BofA, which has also involved the New York Fed, as a indirect guardian of BAC's cash hoard.

The WSJ reports:

The Federal Reserve Bank of New York is having some trouble getting its story straight. A New York Fed employee took back testimony he previously gave in a legal clash between American International Group Inc. and Bank of America Corp. over about $10 billion in mortgage-investment losses, according to the big insurer in its newest federal-court filing in a lawsuit seeking compensation.

 

The testimony is part of a long-running battle between AIG and Bank of America over losses the insurer incurred after purchasing troubled mortgage bonds underwritten by Countrywide Financial Corp. and Merrill Lynch & Co., now part of the Charlotte, N.C., bank. The primary legal battle has been sidetracked by a dispute over who has the right to sue Bank of America.

 

AIG says it does. But the bank claims AIG gave up its rights to sue when it accepted a bailout by the New York Fed, which purchased the troubled securities in 2008 through a vehicle called Maiden Lane II.

 

To help decide the dispute, AIG and Bank of America have sought depositions from New York Fed employees who were involved in the bailout.

 

Bank of America previously cited December 2012 testimony from James Mahoney, one of the New York Fed's lead negotiators on the Maiden Lane II deal.

 

Mr. Mahoney said that when the Fed bailed out AIG, it intended to receive the rights to all future legal claims.

 

But on March 18, Mr. Mahoney told AIG's lawyers: "I was really just concerned about moving all the upside and recourse over to the Fed. I didn't contemplate taking something away."

 

He also said he never discussed with anyone the idea that "AIG was somehow giving up its [tort] claims."

 

Mr. Mahoney explained the discrepancy in his testimony by saying he spent "less than 10 minutes" discussing a document prepared by Bank of America that asserted AIG had given up all legal claims in the bailout.

Fine, so Bank of America must have legal obligations to the Fed if it has been released of all claims toward AIG right? Wrong.

To settle a separate matter, Bank of America agreed to pay the New York Fed $43 million in exchange for the Fed dropping all legal claims against the bank.

A "massive" $43 million to absolve the bank of any wrongdoing relating to $10 billion in bonds? Some things crony capitalism can't buy: for everything else there's BailoutCard.

As for the Fed and Bank of America, complete the sentence: "when it gets serious, you have to [ ___ ]"

 

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Mon, 04/01/2013 - 14:35 | 3396663 SpiceMustFlow
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Fucking taints

Mon, 04/01/2013 - 14:39 | 3396681 idea_hamster
idea_hamster's picture

...[ fuck muppets ] ?

Mon, 04/01/2013 - 14:57 | 3396756 Richard Chesler
Richard Chesler's picture

Thieve vs Thieve

Mon, 04/01/2013 - 15:17 | 3396844 Schmuck Raker
Schmuck Raker's picture

"when it gets serious, you have to [ ___ ]"

Burn it to the ground?

Mon, 04/01/2013 - 15:36 | 3396923 Popo
Popo's picture

"when it gets serious, you have to [ ___ ]"

Become an expat?

Mon, 04/01/2013 - 18:04 | 3397470 Forty Six and 2
Forty Six and 2's picture

"when it gets serious, you have to [____]"

do coke and hookers?

Mon, 04/01/2013 - 15:55 | 3397018 BoNeSxxx
BoNeSxxx's picture

Things are getting good when TPTB begin to feed on themselves...  

Mon, 04/01/2013 - 16:00 | 3397033 smlbizman
smlbizman's picture

when it gets serious.....

take all your paper assests out of the bank 2-3 yrs ago, buy real assets sit back and watch the rest of the sheep get sheered...did i win???...

Mon, 04/01/2013 - 14:39 | 3396677 DoChenRollingBearing
DoChenRollingBearing's picture

I am shocked, SHOCKED that lying was going on here...

Mon, 04/01/2013 - 14:47 | 3396720 McMolotov
McMolotov's picture

The Fed doesn't lie, it simply creates new "truth" out of thin air.

Mon, 04/01/2013 - 14:57 | 3396765 ParkAveFlasher
ParkAveFlasher's picture

They do lie, and they need to be arrested. 

Now, who to arrest the Fed, that is not actually within the Fed's network of fund disbursement....this guy?

http://g1wallz.com/wp-content/uploads/2008/11/marvin-the-martian.jpg

Mon, 04/01/2013 - 15:04 | 3396793 McMolotov
McMolotov's picture

Citizen's arrest, bitchez.

Mon, 04/01/2013 - 15:07 | 3396801 fonzannoon
fonzannoon's picture

Didn't Andrew something Sorkin cover this in his book "too big to fit in my ass"?

Mon, 04/01/2013 - 16:00 | 3397039 smlbizman
smlbizman's picture

they now have officially adopted (again)the george castanza mantra of lying...

Mon, 04/01/2013 - 18:24 | 3397531 yogibear
yogibear's picture

Like skiitle pooping unicorns are real for the banksters.

Mon, 04/01/2013 - 14:39 | 3396679 FieldingMellish
FieldingMellish's picture

I call it, "Pulling a Junker".

Mon, 04/01/2013 - 15:01 | 3396775 Cursive
Cursive's picture

@FieldingMellish

When the truth is too ugly, only a lie can be pretty.

Mon, 04/01/2013 - 17:02 | 3397281 max2205
max2205's picture

Guess who wins.....

Mon, 04/01/2013 - 17:57 | 3397454 neidermeyer
neidermeyer's picture

I win , my house was in a CUSIP AIG paid out on ,,, PAID IN FULL BITCHEZ ,,, Maiden Lane 2 can kiss my QT suit.

Mon, 04/01/2013 - 18:41 | 3397583 chunga
chunga's picture

So going forward AIG would be an indispensable party to any future litigation.

Mon, 04/01/2013 - 14:41 | 3396685 Hunter S. Thompson
Hunter S. Thompson's picture

Building a House of Lies always ends well

Mon, 04/01/2013 - 14:41 | 3396686 OpenEyes
OpenEyes's picture

Fed Lies...

 

Pretty much could have stopped right there.

Mon, 04/01/2013 - 14:42 | 3396694 MarsInScorpio
MarsInScorpio's picture

Can you go into court, perjure yourself, then pull your testimony to avoid prosecution for your perjury?

 

You can if you are Too Big To Jail (TBTJ).

 

Exactly how much more criminal corruption does it take to convice people that this is a dying economic order . . . ?

-30-

Mon, 04/01/2013 - 15:04 | 3396786 Winston Churchill
Winston Churchill's picture

TBTJ l do it all the time in county courts.When caught out,

they simply dismiss and refile the case without the lies.

Justus at its best.

Mon, 04/01/2013 - 15:43 | 3396954 Mr. Saxby
Mr. Saxby's picture

Exactly how much more criminal corruption does it take to convice people that this is a dying economic order . . . ?

So long as Dancing with the Stars and Cramer are on the teevee, these fucking imbeciles will bend over right up to the point when they turn the lights out.

Mon, 04/01/2013 - 18:21 | 3397523 DeadFred
DeadFred's picture

"Exactly how much more criminal corruption does it take to convice people that this is a dying economic order . . . ?"

"I'll take 'infinity' for 200 points Alex"

Mon, 04/01/2013 - 14:42 | 3396697 Jason T
Jason T's picture

"deny"

Mon, 04/01/2013 - 15:06 | 3396798 Cursive
Cursive's picture

@Jason T

What's a little perjury among friends?

Mon, 04/01/2013 - 15:33 | 3396900 Not Too Important
Not Too Important's picture

What's $65 trillion in derivatives among friends? The deposits'll cover it. Oops, wait . . .

Mon, 04/01/2013 - 14:43 | 3396705 PontifexMaximus
PontifexMaximus's picture

Bullish, at leat they told and tell you who are the masters, move on, for the past , the jew doesn't pay a dime....

Mon, 04/01/2013 - 20:44 | 3397881 Andy Lewis
Andy Lewis's picture

William Dudley's a Jew, huh?

 

Fuck off, you piece of shit.

Mon, 04/01/2013 - 14:45 | 3396709 Bay of Pigs
Bay of Pigs's picture

The William Dudley?

Nice one Tyler...

Mon, 04/01/2013 - 14:45 | 3396716 monopoly
monopoly's picture

I am sure this will be on the 6 PM headline news and all day on CNN. The truth will be broadcast for the citizens to see. 

Mon, 04/01/2013 - 14:48 | 3396724 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The drool of law is alive and kicking in this great nation ...

Mon, 04/01/2013 - 14:48 | 3396728 skipjack
skipjack's picture

"

So we cheated and we lied
And we tested
And we never failed to fail
It was the easiest thing to do.
You will survive being bested.

"

Mon, 04/01/2013 - 15:16 | 3396835 ParkAveFlasher
ParkAveFlasher's picture

Time to go on a boating trip with David Crosby.

Mon, 04/01/2013 - 14:50 | 3396730 buzzsaw99
buzzsaw99's picture

When it's bad you have to lie. Fuck CONgreff, they don't want nor do they deserve the truth as they themselves are lying thieving accomplices in the great kleptocracy. Stupid cunts, they'd sell their mother for a campaign contribution.

 

the fed lies to help bac, to help buffett, to help mozilo, to help paulson, to help...

Mon, 04/01/2013 - 14:50 | 3396734 Peter Pan
Peter Pan's picture

Like I keep saying, Americans used to have the nerve to even shoot their presidents and now they can't even take care of one scummy banker.

What's happened to them? Or have they just become hobby gun collectors?

Mon, 04/01/2013 - 14:52 | 3396740 ebworthen
ebworthen's picture

The FED is a criminal organization that makes the Sheriff of Notingham look like a Saint.

Mon, 04/01/2013 - 14:54 | 3396745 One of We
One of We's picture

"when it gets serious, you have to [ Get to work Bernanke!].

Print us some dough or we'll have to Corzine some deposits to pay this lousy $43 million!

Mon, 04/01/2013 - 14:54 | 3396748 Motorhead
Motorhead's picture

Isn't the USA such a wonderful country?  Just so full of integrity and righteousness. 

No wonder each year the US[S]A continues to slide in the rankings of economic freedom.

Mon, 04/01/2013 - 14:58 | 3396760 darkpool2
darkpool2's picture

and the message this sends to the rest of us, is ???

( oh, you all already learned that message a long time ago ?......you mean NOTHING is the truth these days.....everything is just spin and lies??......really?.......crap, I must be last person standing, silly me )

 

Mon, 04/01/2013 - 14:59 | 3396766 economessed
economessed's picture

It's a big club, and you ain't in it.

Mon, 04/01/2013 - 20:47 | 3397890 vulcanraven
vulcanraven's picture

One thing Carlin got wrong.... it's actually a SMALL club.

Mon, 04/01/2013 - 14:59 | 3396769 eddiebe
eddiebe's picture

"..when it gets serious you haver to": buy a few representatives and judges.

Mon, 04/01/2013 - 15:03 | 3396777 flacorps
flacorps's picture

Bernanke lied,

Lawsuits died...

Who was dumb enough to expect any different?

Mon, 04/01/2013 - 15:05 | 3396787 Atlantis Consigliore
Atlantis Consigliore's picture

ur ur ur ur UR Honor, May it Please the Whores? Congress rented by the hour w/ the regulatwhores.

wheres my deposits? MF ....er....s

Mon, 04/01/2013 - 15:05 | 3396794 Shizzmoney
Shizzmoney's picture

RE:

"when it gets serious, you have to [ ___ ]"

"redact"

Look what happened when Dylan Ratigan requested the FOMC minutes from around when the crisis started to begin.  Over 90 pages.  81 of them are 85% or more redacted.

The only major decision we found out that Bernanke made in March of 2008 (when the market was diving) was that he ordered the Chicken Cobb Salad for lunch.

Mon, 04/01/2013 - 15:08 | 3396805 short screwed
short screwed's picture

 At least Angelo Mozilo is rotting in prison with Corzine....

Mon, 04/01/2013 - 15:59 | 3397025 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

i dreamt that a couple of times  -- it was very pleasant

Mon, 04/01/2013 - 15:11 | 3396815 silverserfer
silverserfer's picture

preservation of power to create money out of thin air is all this is about.

Mon, 04/01/2013 - 15:13 | 3396821 flacorps
flacorps's picture

Next up: A law protecting anybody at the Fed from having to testify in front of any court or Congress.


Martial law unless it passes.

Mon, 04/01/2013 - 15:17 | 3396851 coastalwn
coastalwn's picture

let he who has no sins cast the first stone....  bomb... you get the drift

Mon, 04/01/2013 - 15:32 | 3396898 Joebloinvestor
Joebloinvestor's picture

Who is one of the biggest shareholders of B of A, so big he was given his OWN CLASS OF STOCK?

DUH.

Mon, 04/01/2013 - 15:33 | 3396904 fallst
fallst's picture

So Why did BoA Buy Countrywide?

 

Smith was supposedly pressured to absorb, then was gonna sing when they dumped him, Because Of It.

 

And, if AIG was bailed out at 100% par for 4% actual value, how can they expect double payment With A Straight Face?

 

These socio/psychopaths are So Amusing!

Mon, 04/01/2013 - 15:36 | 3396919 chunga
chunga's picture

Watch this beat-down of MERS CEO Hultamn.

Law Dogs Weekly Video Blast - March 29, 2013

This guy has about 2000 lawsuits against MERS and their fellow black-hats.

So many that Hultman felt compelled to appear before the RI General Assembly.

House Committee on Corporations 3-26-2013 (Audio)

If you are so inclined to listen, Hultman starts justifying MERS at the 40 minute mark.

The attorney starts kicking his ass at the 51 minute mark...and it goes downhill for Hultman from there.

Mon, 04/01/2013 - 15:45 | 3396966 antisepticWipe
antisepticWipe's picture

Wow, that is hilarious. Fuck you MERS fuck you.

Mon, 04/01/2013 - 16:41 | 3397212 helping_friendl...
helping_friendly_book's picture

They ought to destroy MERS.

Mon, 04/01/2013 - 15:37 | 3396924 madcows
madcows's picture

"It's not a lie, if you BELIEVE it."

Mon, 04/01/2013 - 15:40 | 3396939 coastalwn
coastalwn's picture

the check is in the mail...  baby     you just gotta believe

Mon, 04/01/2013 - 16:11 | 3397089 Lordflin
Lordflin's picture

Too many crooks spoil the broth...

Mon, 04/01/2013 - 16:12 | 3397091 Debt Slave
Debt Slave's picture

Q: Why is it illegal to counterfeit US currency?

 

A: Because the Fed hates competition.

Mon, 04/01/2013 - 16:51 | 3397247 rsnoble
rsnoble's picture

Take back testimony?  Go ahead, let one of us try that sometime.

Mon, 04/01/2013 - 20:23 | 3397832 optimator
optimator's picture

we can't "Lie" under oath, we perjure ourselves but apparently "They" don't as it's a simple lie.

Mon, 04/01/2013 - 17:53 | 3397440 Radical Marijuana
Radical Marijuana's picture

"... for everything else there's BailoutCard."

It amuses my macabre sense of humour that the real world is more and more turning into the "MONOPOLY" board game. The "rules" of that game allow the banker to create as much money out of nothing as they want, while there is a de facto guaranteed "get out of jail free card," or the "BailoutCard," available to the biggest banks (although not necessarily anybody else.)

http://video.pbs.org/video/2327953844/

Mon, 04/01/2013 - 18:42 | 3397588 yogibear
yogibear's picture

So they lie. What will the muppets do about it? answer, nothing!

You heard Eric Holder say the too big to fail are too big to prosecute.

There is no honor among theives.

Carry on thieves there is no law anymore. It doesn't apply to you, it only applies to the muppets. 

 

Mon, 04/01/2013 - 19:25 | 3397706 MrBoompi
MrBoompi's picture

Agent Orange. Lmao!!

Mon, 04/01/2013 - 21:23 | 3397974 chinaboy
chinaboy's picture

who would have thought "too big to fail" have made USA a "pre Jeffersonian democracy"

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