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Bank Of Countrywide Asbestos

Tyler Durden's picture


Ten days ago Zero Hedge presented the idea of applying an Asbestos-type settlement to the neverending lawsuits against Bank of America which if continue at the current rate will result in the swift and brutal end of the massively undercapitalized bank by a thousand Rep and Warranty litigation cuts. Yesterday, we were happy to see that the idea has received far broader billing, and is being taken up by non other than Reuters: "When some look at all of the litigation arising from Bank of America's big role in the U.S. mortgage mess, they start thinking of asbestos and how thousands of lawsuits arising from that cancer-causing product brought down many manufacturers more than a decade ago. The solution back then to dealing with claims filed by more than 750,000 workers exposed to asbestos was the creation of dozens of "asbestos settlement trusts," which have paid out tens of billions dollars in damages. Some of them are still going strong today. The asbestos trusts were seen as an innovative approach to deal with seemingly endless litigation and provide a measure of compensation to sick workers and their families. The system for dealing with claims also allowed some of the hobbled manufacturers to emerge from bankruptcy largely free of the crushing weight of lawsuits." In other words, the choices for Bank of America are now two: either it prepares for a slow, painful, insolvency as all of its cash is bled out in litigation fees and "one-time" lawsuit charges, or, almost just as bad, it funds a massive trust, ringfencing all past, current, and future claims, and which is nearly all of Bank of America's equity. Yes, the end result will be a near wipe out of the existing Bank of America stock, but it will not be bankruptcy! In essence, what BAC will do is a bankruptcy remote "prepackaged bankruptcy" in which it spins off its contingent liabilities, with an equity buffer of whatever the litigants choose (most likely up to about 95% of the firm's current equity value), and proceeds to grow as a simple bank (with or without Merrill) and fund itself through retained earnings, in the process shedding off the "cancer" that are $1.2 trillion in toxic mortgages. The result of this would be a BAC share price of under $1 but that is inevitable. The alternative: freefall chapter 11 and technically 7 (which will never be allowed by the administration, sorry Chris Whalen), means BAC trades to $0.00, and the status quo system of crony communism is finished.

As a reminder, from Zero Hedge:

And some more from Reuters on the theoretical underpinnings of this idea..

"We've suggested an asbestos-style settlement as a solution. It makes the most sense," says Vincent Fiorillo, a portfolio manager with DoubleLine Capital, a $15 billion bond shop that has its own pending claims against the Charlotte, North Carolina-based lender. "It is better than where we are right now."


The idea of using the asbestos litigation wars as a model for dealing with the fallout from the financial crisis is more talk than anything else. There's no indication an asbestos-style litigation trust is something Bank of America is actively considering at the moment.


But efforts to find a creative solution to Bank of America's multi-pronged exposure to Countrywide's ailing mortgage portfolio become more urgent with each downward tick in the bank's already depressed share price.

And practical...

This is not the first time that some have talked about a litigation trust as a mechanism to deal with some of Wall Street's liability arising from the collapse of the U.S. housing market. In the early days of the financial crisis, regulators discussed the merits of using an asbestos-style trust to resolve potential litigation claims against the biggest U.S. banks. But regulators ultimately rejected the trust concept along with other novel ideas that were deemed either unworkable or politically untenable.


One appeal to a trust solution, according to proponents, is that it would be a way for a bank to essentially hive off its litigation liability and establish a mechanism for dealing with claims and litigation. The advocates suggest it would be a way for Bank of America to get a "fresh start" without involving a bankruptcy or a Federal Deposit Insurance Corporation-imposed receivership.

To be sure, an Asbestos resolution is not a magic bullet, and will still cost existing equity (and Buffett) virtually their entire investment:

The insurance industry continues to be plagued with new asbestos-related claims years after the trusts were created. Credit rating agency Moody's Investors Service recently said after asbestos being a "back burner" issues for years, the U.S. insurance industry is recently seeing an uptick in new asbestos claims.


And the problem with any trust is that it must be adequately capitalized. The amount of money the bank would have to commit would no doubt be contentious and costly to shareholders and potentially bondholders as well.


The easiest way to fund a litigation trust would be for Bank of America to issue new shares, something that would severely reduce the value of its existing stock. That's not the kind of plan that will sit well with stockholders, whose shares are already trading well below the bank's stated book value of $20 a share.


"You'd have to go to the market and raise capital for this and that would dilute shares," says Australian hedge fund manager John Hempton, whose Bronte Capital owns a sizable stake in the bank. "That is the last thing BofA wants to do right now."

Alas, Buffett's idiotic investment betting on yet another taxpayer funded bailout has derailed the train for the time being:

But if some momentum was building for a radical solution, Buffett's $5 billion investment changed that. Now even some early advocates of an asbestos-style litigation trust are having second thoughts.


"The dynamics have changed dramatically since Buffett entered the picture," says Sean Egan, a principal of Egan-Jones Ratings Company, an independent rating shop which has eased up on its once bearish view of Bank of America. "It's a kiss of approval," he added, even though the bank is paying a rich 6 percent dividend on the preferred stock it sold to Buffett's Berkshire Hathaway.


Egan says an asbestos-style trust seemed like a plausible solution during the summer when Bank of America seemed to have few friends in the equity markets. But now, Egan says, to set up a litigation trust would "create a total mess" and "be patently unfair to existing shareholders."


Just a few months ago, Egan discussed the merits of such a trust with several mortgage-backed securities investors now sparring with Bank of America. Those investors claim the bank is obligated to buy back the underlying home loans in those now soured bonds because the mortgages were issued to homebuyers who either obviously lacked the income to keep making monthly payments, or were duped into taking out greater loans than they could afford.

So for the time being the litigation push is delayed. Although likely not for long: BAC will soon need to access the capital markets very aggressively, which means its stock will plunge even more on daily headline risk:

Skeptics also point out that in the coming years, Bank of America will need to boost capital by $50 billion in order to comply with new international banking regulations designed to make sure banks are not taking on too much risk.


And next year, Bank of America will need to refinance at least $40 billion in corporate debt that is coming due. In a worst case scenario, the bank has more than $400 billion in liquid assets to pay off any maturing debt.


It's a lot of capital raising and skeptics worry that could hamper Bank of America's ability to generate new commercial and residential loans for the next several years. That's one reason people like Black, who want to break Bank of America apart, say something needs to be done to change the narrative because it's not healthy for one of the nation's biggest banks to exist in stasis for years to come.

One thing is certain: anyone calling for a prompt return of BAC to a $20/30/share price is certainly insane (we refer to Dick Bove's appearance on Fox News yesterday), and should never get media exposure again (just as a media desperate Dick Bove had promised months ago only to have not one but two daily showing on the ponzi channels in an attempt to get more gullible Americans to follow Buffett in throwing their money down the black hole). Also certain is that no matter what one believes, the Bank of America matter is one of cash flows: not enough (A) coming in, and more than enough (B) leaving. Regardless of how one spins it, as long as B>A, the stock price will drop ever more until bankruptcy eventually becomes an inevitability. As such any attempts to stop the bleeding should be enforced. However, pathetic attempts such as the $8.5 billion settlement only provoke and infuriate the plaintiff class (at least those who are not desperate in imposing a Res Judicata) and make any real cash retention options next to impossible.

In the meantime, two things are certain: all else equal (and with Bernanke around, they never are), the stock will continue dropping, and the CDS will continue widening until it is too late.


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Sat, 09/10/2011 - 13:07 | 1654565 papaswamp
papaswamp's picture

Don't help these fuckers out...they screwed people...they made bad decisions...time for them to pay up. 

Sat, 09/10/2011 - 13:18 | 1654595 OpenEyes
OpenEyes's picture

Within the scope of ethics, rule of law and constitutionality, I agree wholeheartedly with you.  They should not only NOT be bailed out or helped by the public trust in any way they should also be thoroghly investigated (and probably prosecuted) for any number of offenses.

However, from a practical point of view, why would BAC's management or stockholders have any incentive to create a superfund that would payoff claimants while leaving them high and dry?  They were bailed out before because they were TBTF why wouldn't they just roll the dice again and count on the Gov't to blink?  I'd say their odds on that would be better than 50-50.  Since the choice would be to lose all of your equity (and probably a fair amount of self-management power too - e.g. a loss of those big bonuses they award themselves) what do they really have to lose?  I guess the other choice would be for massive, and rapid, insider selling of BAC equity before TSHTF, get yours while you can.

I think BAC are evil and destructive.  I think they should be forced to live with the consequences of their actions.  But I suspect they'll drive the ship toward the rocks forcing the Government's hand to step in with yet another rescue/bailout plan.

Sat, 09/10/2011 - 13:34 | 1654623 Careless Whisper
Careless Whisper's picture

@ papaswamp

I'm more inclined to give BofA a pass. The people running that Bank are really really stupid. I mean, come on, buying Countrywide in 2008? They are fuckin' idiots. Meanwhile Goldman was packaging Timberwolf and selling it to clients as AAA natural cleavage, while at the same time shorting it. So I'm not ready to put them all in the same boat.


Sat, 09/10/2011 - 14:02 | 1654683 ZeroPower
ZeroPower's picture

The people running that Bank are really really stupid. I mean, come on, buying Countrywide in 2008? 

Lewis is a chump, but his hand was forced. They bought CFC cause BAC was their largest counterparty on just about every single sort of liability you can think of. Its all well documented in several books about the crisis and probably has been posted here as well, but basically in short form: CFC bought and sold all kinds of shit from BAC. Tranche upon tranche of "shitty deal" mortgages, index swaps, ABS swaps on those indices, etc etc, and seeing as how BAC preferred CFC stay alive to eventually pay out those obligations to BAC, they decided to take em in under the new umbrella of BAC so that they have full control over their finances and what they choose to disclose and bring in versus the other shit still on SPVs which won't be seeing light of day any time soon.

Sat, 09/10/2011 - 14:21 | 1654740 snowball777
snowball777's picture

Forced my ass; a voluntary looting of a corpse's pockets at best and yet another reason these stupid motherfuckers should be both bankrupt and in ass-pounding jail.

Sat, 09/10/2011 - 16:28 | 1654998 DCFusor
DCFusor's picture

They were forced to buy Countrywide, and caught a lot of shit for revealing that "secret" phone call -- buy them or no bailout.  Paulson.  Go check before spouting.

Now, since Ken Lewis is the spawn of Satan, couldn't have happened to a more appropirate guy -- but that doesn't mean he wasn't forced.

Sat, 09/10/2011 - 22:05 | 1655525 Manthong
Manthong's picture

Didn't Merrill Lynch, with a boatload of crap, get foisted on them , too?

Sat, 09/10/2011 - 22:33 | 1655562 snowball777
snowball777's picture

And how, pray tell, did they end up with their ass in the aforementioned sling? They weren't "forced" any more than any other criminal is "forced" into a life of crime.


Sun, 09/11/2011 - 06:21 | 1655854 Anonymouse
Anonymouse's picture

Spot on, on all accounts.  As I recall, ultimately Lewis went ahead to protect his job.  Paulson had threatened to have him fired somehow (don't recall the mechanism).

An honorable man would have resigned and announced why.  Lewis did not.  He gets what's coming to him.

Unfortunately, he drug down a lot of good people with him

Sat, 09/10/2011 - 16:33 | 1655007 ZeroPower
ZeroPower's picture

How can you argue with fact? CFC nbv was < 0

Sun, 09/11/2011 - 21:39 | 1658205 ToNYC
ToNYC's picture


Worse than negative only numbers; it was being forced to drink Socrates' frickin' hemlock.

Sun, 09/11/2011 - 10:33 | 1656014 Papasmurf
Papasmurf's picture

Someone forgot to sent that memo to John Paulson. 

Sat, 09/10/2011 - 16:27 | 1654996 New_Meat
New_Meat's picture


"I mean, come on, buying Countrywide in 2008? They are fuckin' idiots."

Or not.  'Cuz Ol' Hank had just taken delivery of his brand new White-stock Ithaca Pump and said, "Boy, u gonna marry this bitch."  So after less than 2,000 minutes of "Due Dilligence" the deal was "consumated."

Of course it was stupid, but the alternative was worse.  Hobson's Choice.

- Ned

{The wedding was a formal one/her Daddy brought his white shotgun.}

Sat, 09/10/2011 - 17:57 | 1655123 agrotera
agrotera's picture

I kind of agree Careless Whisper, but on the other hand, BAC looks like a dumping ground for toxicity, since yes, they purchased Countrywide, but also, allowed their own shareholders to get ripped off again with the "paulson" imposed merger of MER for 0.66 BAC share for every bankrupt share of MER.  Think of the JPM deal to get Bear Stearns and then look at the BAC rip off to buy MER and it all looks like musical shares to quarantine crap at BAC and abscond with as much value from the BAC shareholder as possible.

Sat, 09/10/2011 - 18:17 | 1655158 Bananamerican
Bananamerican's picture

"Yes, the end result will be a near wipe out of the existing Bank of America stock, but it will not be bankruptcy!"

"so, uh...does this mean we still know....BONUSES? You uh, retain our TALENT?"

Sat, 09/10/2011 - 23:08 | 1655595 sun tzu
sun tzu's picture

BAC looks like a dumping ground for toxicity

How very appropriate of TPTB to use Bank of America as the dumping ground for their toxic debt. 

Sun, 09/11/2011 - 21:41 | 1658214 ToNYC
ToNYC's picture


Old Maid; musical chairs. It's all fun and games 'till the cops show up.

Sat, 09/10/2011 - 18:13 | 1655147 Landrew
Landrew's picture

Now that was funny Whisper ha! People some times forget the sarcasm here is the best! Give the a pass because who could be that stupid to by counrywide ha!

Sat, 09/10/2011 - 14:52 | 1654815 Papasmurf
Papasmurf's picture

We need criminal prosecutions and civil litigation of those responsible for conducting the fraud.  All levels should be tried for their specific participation and responsibility in the financial crisis.  From the CEO down to the college age robo-signer, they should all face criminal and civil redress for their roll.  The stolen money needs to be recovered from those who took it and those who now have it.  

A huge reason the economy is not recovering is because those culpible have not been punished and their profits have not been disgourged.  This is the root cause for the "crisis of confidence".  How can there be confidence in a system that rewards thievery?  Recover the assets and jail the crooks.  Jail the politicians who facilitated the plundering.  Recover the assets from where they are instead of looking for money from a hollowed out corporation.  There is no reason to prop up what remains of the corporation.  Instead of creating a settlement trust from what remains, create a trust from assets recovered from the crooks so the compensation is maximized to victums and the taxpayer.     

Sat, 09/10/2011 - 15:05 | 1654840 monoloco
monoloco's picture

Don't count on the DOJ, they're too busy interpreting Indian law and busting real criminals like Gibson Guitar.

Sat, 09/10/2011 - 16:28 | 1655000 New_Meat
New_Meat's picture

Don't forget the tremendous effort that they have to put in, day-by-day-by-day, to ignore all of those peksy "laws" that they swore to uphold.

- Ned

Sun, 09/11/2011 - 06:57 | 1655868 onthesquare
onthesquare's picture

I remember owning shares of Owens Corning.  They began to build this trust and take all their profits and send them into the fund.  Filed Chapter 11, with the help of the government, and became their own receiver. WOW!

There stock went to the basement.  Hit less than a dollar, fell off the exchange and just vanished much to the bewilderment of the common share holder.

$6b a year profit gone to poor asbestos sick folks and their dependants.  They deserved the money for their untimely deaths and poor health but what stinks was that OW had not produced asbestos products since 1968 so just how was their involvement being owned upto when claims came in.

The path that Philip Morse took may be a better one.


Sun, 09/11/2011 - 21:43 | 1658220 ToNYC
ToNYC's picture


Phiilp Morris paid the right cops; Owens Corning? Not so much.

Sat, 09/10/2011 - 13:34 | 1654622 Ex Poker Stars
Ex Poker Stars's picture

Some seem to be forgetting: We want perp wa;lks

Sat, 09/10/2011 - 23:45 | 1655654 Ms. Erable
Ms. Erable's picture

Only if the perp walks end with walls, cigarettes, blindfolds, and the sound of thunder.

Sun, 09/11/2011 - 21:45 | 1658230 ToNYC
ToNYC's picture


Perp walks cost lunch money. Perps aplenty pay far better. Just good, efficient government keeping the obvious crooks at bay. It's a great country, America.

Sat, 09/10/2011 - 13:54 | 1654669 narnia
narnia's picture

an above board settlement on a massive scale is a great idea, as long as the homeowner, credit customer & taxpayer are parties to that settlement. 

Sat, 09/10/2011 - 14:22 | 1654743 snowball777
snowball777's picture

You're right on 1/3 counts.

Sat, 09/10/2011 - 23:50 | 1655658 TwelfthVulture
TwelfthVulture's picture

BAC packaged some junk mortgages, marketed and sold them to legitimate investors as prime mortgages.  Taxpayers bailed out BAC via TARP, TALF, etc... back in 2008/9 which monies remain unpaid.  I fail to see how homeowners and credit card holders of BAC would, or should, benefit from a settlement to cure the defrauded investors.  Perhaps we should also extend settlement to people born on Wednesday.

Sun, 09/11/2011 - 00:13 | 1655689 narnia
narnia's picture

the FDIC is the true economic owner of these TBTF banks, which are all upside down on a mark-to-market basis.

the homeowner got into a bad deal and was negligent.  that said, the underwriters, the ratings agencies, the aggregators, MERS, the people providing credit, the government providing enhancements, the regulators incentivizing home ownership & the Fed were all negligent as well.  there are no saints in this group.

in a system of justice, you try apportion contributive negligence.  in my opinion, every single party should take a hit- some bigger than others.  that translates to homeowners having to live with their principal balances at a lower interest rate or a principal reduction at new rates, creditors receiving less of a return (which is all the foreclosure process is anyway- interest rates), and the parties in between paying damages to the creditors to mitigate that spread.

Sat, 09/10/2011 - 14:10 | 1654712 dbTX
dbTX's picture

They didn't just "make bad decisions" they plotted the whole sorted afair. As far as I'm concerned the ratings agencies that aided them have blood on their hands as well.

Sat, 09/10/2011 - 18:18 | 1655159 Bananamerican
Bananamerican's picture

Sordid...just sayin'

Sat, 09/10/2011 - 18:15 | 1655152 Akrunner907
Akrunner907's picture

Aww the memories. Just three short years ago it was a dream made in heaven, or so Ken Lewis thought.  What was his bonus?

Mon, 01/16/2012 - 09:51 | 2068420 adrin
adrin's picture

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Sat, 09/10/2011 - 13:07 | 1654567 RobotTrader
RobotTrader's picture

The Fed will nationalize the entire mortgage industry prior to letting BAC shares fall below $5.

It will be deemed a matter of "national security", therefore the debt ceiling will be raised again, and billions of freshly-flung Uncle Gorilla Notes will be floated, and investors will wolf them down like McDonald's french fries.

Sat, 09/10/2011 - 13:15 | 1654584 Corn1945
Corn1945's picture

I tend to agree. The entire point of the last three years was to prevent the business cycle from working and thus preventing anyone (politcally connected) from failing. Bank of America isn't going anywhere. The share price may go to zero but the government absolutely will bail them out again. If push comes to shove, they make influence the courts to throw the judgements out. Anyone who thinks they will get justic from this system is out to lunch.

The public simply refuses to take any concrete steps against the bailouts.

Sat, 09/10/2011 - 16:31 | 1655005 New_Meat
New_Meat's picture


"The entire point of the last three years was to prevent the business cycle from working and thus preventing anyone (politcally connected) from failing."

I remember Tiny Tim Taking over and Talking about "we can't afford business cycles anymore".

I didn't think along those lines back when, now, different matter.

- Ned

{after I finish cleaning the garage, I'll look up the citation, see how close it is.}

Sat, 09/10/2011 - 13:19 | 1654597 Atomizer
Atomizer's picture

Methinks JPmorgue will pick up Skank of America for pennies on the dollarette.

Sat, 09/10/2011 - 13:40 | 1654640 Steroid
Steroid's picture



And Countrywide, the disease becomes a country wide epidemic (not as if the underlying cancer would not have killed them anyway).

Sat, 09/10/2011 - 13:30 | 1654614 Gohn Galt
Gohn Galt's picture

It's almost like you guys were in the meeting.  Or is it just that obvious. 

As far as BAC shares below $5, I think it will, but Robo you call stocks better than I do.  Thats why I just do credit and futures.

Sat, 09/10/2011 - 16:55 | 1655039 Landrew
Landrew's picture

So you followed Robo's China Solar stocks down the crapper, did you fill bankruptcy?

Sat, 09/10/2011 - 17:52 | 1655115 Ruffcut
Ruffcut's picture

I've bought nearly 600 put contracts on these shitbags. Exhausting profits since the middle of last year. Only in a little. Oh the pain.

IF some these criminals saw jail time, would make me feel a little better, but I doubt that. The tan man lives to contaminate the bigger crime bosses.

Sun, 09/11/2011 - 11:24 | 1656083 dizzyfingers
dizzyfingers's picture


I think anyone who bets on what you say will win.

Sat, 09/10/2011 - 13:07 | 1654569 LetThemEatRand
LetThemEatRand's picture

I'll bet we end up with a largely taxpayer funded version of the fund that allows BAC to survive and the executives who caused this mess to continue receiving their pensions.  

Sat, 09/10/2011 - 13:20 | 1654598 Monkeyfister
Monkeyfister's picture

Sadly, I think you're correct. Our lousy Politicians know who butters their bread.

Sat, 09/10/2011 - 13:10 | 1654573 spiral_eyes
Sat, 09/10/2011 - 13:12 | 1654577 Seasmoke
Seasmoke's picture

I want to see you smile again
The day the banks collapse
The amazing sound of the killing hordes

Zee hordes of vigalantees
The day the banks collapse on us

Sat, 09/10/2011 - 13:13 | 1654580 Id fight Gandhi
Id fight Gandhi's picture

Follow in CIT footsteps. Wipe out the common holders to come back and IPO a month later like nothing happened.

Sat, 09/10/2011 - 13:14 | 1654583 Piranhanoia
Piranhanoia's picture

  We do not need BOA alive.  It has fed on the living and carcasses of the dead.  It needs to be dissolved so that the criminal enterpirse can not be revived.  We know it is organized crime, and that is something that we can only eradicate to protect ourselves.

Sat, 09/10/2011 - 13:17 | 1654593 Monkeyfister
Monkeyfister's picture

No way! Just let the Zombie Bank die, already. Chop up the pieces and scatter them to the winds.

Sat, 09/10/2011 - 18:25 | 1655168 Bananamerican
Bananamerican's picture

Sooo much better for the country had they let the Banks fail...and let the People see the Racoon in the cookie jar.

Folks would have been properly, immediately, immensely PISSED OFF....

...a chastened, humbled financial system could have been re-established out of the ashes of the old kleptocracy.

fuck it.

Sat, 09/10/2011 - 13:33 | 1654619 chunga
chunga's picture

I love bashing BAC, and will continue to vigorously do so, but they were not alone. Save some disgust for the others. The link below is an Assignment of Mortgage on (ad-free) Foreclosure Hamlet. MERS assigns to Wells Fargo. Same day, same person, same notary assigns from Wells Fargo to Fannie Mae!

Whoopie! Just like magic!

Let's Play "Find The Fraud"! What's Wrong With This Assignment?

Sat, 09/10/2011 - 13:42 | 1654647 Careless Whisper
Careless Whisper's picture

Jasmine Sundaramohan.  A robo-signer name like that could give you carpel tunnel syndrome.

Sat, 09/10/2011 - 13:49 | 1654665 chunga
chunga's picture

LOL. She'd need a helicopter to do all that travelling in one day. Gotta hand it to her though...with all those job titles she must be one ambitious gal. Too bad for all those parties that the magic act did not go unnoticed by counsel for plaintiff.

Sat, 09/10/2011 - 22:04 | 1655522 AmericanBulldog77
AmericanBulldog77's picture

Or she could use this...

It's a Teleporter.

Sat, 09/10/2011 - 22:46 | 1655523 AmericanBulldog77
AmericanBulldog77's picture

Or she could use this...

It's a Teleporter.

Sun, 09/11/2011 - 10:46 | 1656025 rosiescenario
rosiescenario's picture

"Jasmine Sundaramohan" MERS was outsourcing the doc signing....

Sun, 09/11/2011 - 12:22 | 1656331 chunga
chunga's picture

From one of the comments at the OP:

So Janice works for Franklin American Mort Corp. in Flint, MI and Assigns the Mortgage as an Asst. Sec'y for MERS to Wells Fargo in Des Moines, IA and she had the Assignment Notarized in Dakota County, Minnesota...

Then, on the same day, she also works for Wells Fargo in Des Moines, IA and Assigns the Mortgage to Fannie Mae in Philadelphia, PA and has it Notarized again in Dakota County, Minnesota?

First, Lets just assume that it's legal to have an Assignment of Mortgage from a company in Flint, MI to be Notarized in Minnesota for a Company located in Iowa. And then let's also assume that a company in Iowa can have an Assignment of Mortgage Notarized in Minnesota for a company in PA.

Is this sort of behavior legal? Or could it be FRAUD? Hmmmmmm, Flint, MI to Dakota, MN, a mere 581.8 miles apart. That's nearly a 12 hour drive w/o any highway mishaps, oh, and you better have the ability to walk on water, otherwise, its a 688 mile drive under Lake Michigan and over 12 hours. Typically, Banking hours are between 8am & 5pm. That's a total of 9 hours. Maybe she should have saved gas and just drove to Iowa. It's only 10 hours away.

Pretty neat trick huh? I've got one coming (just waiting for the lawsuit to be filed) that clearly shows a pair of banking execs insist they signed a document used in a foreclosure action - now get this - a full 23 days before they had the document in their possession. Further, the magic documents were notarized 40 days before that!

Their is something very sinister about this amazing time travel. It is my belief that these individual mortgage obligations live in more than one savvy MBS investor's "book". Each manifestation of the obligation is insured against default for the full outcome based appraisal "value".

Each investor is made whole via insurance and thanks to AIG, who of course was caught by surprise, has no choice but to dump the whole mess on the taxpayer. Meanwhile, the "servicer" purchases (for pennies on the fiat) the right to pursue the extinguished debt and seek as many deficiency judgments as possible.

Not to mention the fact that clear chain of title on millions of homes (in default or not) are destroyed. Further, if the obligations fail to make their way to the trusts within the REMIC window, no taxes are paid.


Sat, 09/10/2011 - 13:37 | 1654631 dp226
dp226's picture

But does the management of the company even care about the shareholders any more.  Everything I keep seeing seems to indicate that the management only looks out for themselves, not the shareholders.   They will do anything so long as they get to stay in charge.  Their shares will convert to new shares "to keep talented people".   But most of what their talent is is how to screw the common shareholders and how to run a company into the ground concentrating on the short term as opposed to the long term health of a company.  (the is directed at almost all big companies, not just BAC)

Sat, 09/10/2011 - 14:22 | 1654745 Silver Bully
Silver Bully's picture

'They will do anything so long as they get to stay in charge AND PROTECT THEIR PAY AND BONUSES WITH NO JAIL TIME.'


There, fixed that for ya.

Sat, 09/10/2011 - 13:38 | 1654632 Rodent Freikorps
Rodent Freikorps's picture

I've got an idea.

Let's break up the TBTFs into not-TBTFs.

Then send in the forensic accountants. Offer them bounties for money collected, and criminals prosecuted.

Big bounties.

Sat, 09/10/2011 - 14:06 | 1654701 ZeroPower
ZeroPower's picture

If only! Unfortunately the theme has been 'bigger is better' for companies.

BTW, accountants suck almost as much as consultants. Almost.

Sat, 09/10/2011 - 14:30 | 1654763 snowball777
snowball777's picture

For some reason the phrase "Dead or Alive" makes me smile.

Sat, 09/10/2011 - 23:18 | 1655609 sun tzu
sun tzu's picture

They don't want any honest regulators combing through the books

Sat, 09/10/2011 - 13:46 | 1654659 LoneCapitalist
LoneCapitalist's picture

I think BAC will receive another "offer they cant refuse " and they will become the bad bank that all the toxic assets get dumped into.

Sat, 09/10/2011 - 15:13 | 1654836 yakmerchant
yakmerchant's picture

This.  I've said it on here before.   BAC is going to be the scapegoat/coffin.  They aren't part of the club.   Right before BAC is shut down and the  fake trials to make an example out the evil bankers  by the people's comrades over at the  department of justice begin, all the dead bodies and bad assets of all the big banks all over the world will magically get transferred to BAC in exchange for any decent assets.  A few half innocent middle managers will go to jail, the big wigs will go to their private islands and the ultimate and final ass raping of the American taxpayer will be complete

Sat, 09/10/2011 - 17:15 | 1655070 DCFusor
DCFusor's picture

And you're not alone in saying it -- I've noticed they're not in the club as well, and spoken of it.  The main rat already got out scot free.  It's time.

Sat, 09/10/2011 - 21:58 | 1655518 AmericanBulldog77
AmericanBulldog77's picture

Wait a minute...Where is Angelo in all this? Oh Ya...He is already on his own Fraud Paid Private Island. My mistake, I thought he should've been jailed... Yet he still shows up in court in 2011?...S&L Perfected.

'Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo asked a federal judge to dismiss a lawsuit filed against the Bank of America Corp. (BAC) unit by Allstate Corp. (ALL)

Ronald P. Fischetti, a New York attorney representing Mozilo, urged U.S. District Judge Alvin K. Hellerstein in Manhattan to throw out the insurer’s claims that Mozilo was the “architect” of a scheme to abandon underwriting at Countrywide, according to a court document filed today'

What or Who is he trying to protect?...

And he will NEVER be ALONE on Fraud, errr, I mean Private Island...

if you haven't seen it, it's less than 2 hrs. of your life and it's FREE. If you have, SPREAD IT to the uneducated.

Sun, 09/11/2011 - 15:13 | 1656929 Hephasteus
Hephasteus's picture

There's 2 kinds of people in this world. Uninsured people who pay premiums and uninsured people who don't.

Sat, 09/10/2011 - 14:12 | 1654719 jplotinus
jplotinus's picture

"...and the status quo system of crony communism is finished..."

It is tea-partyesque to attribute the obvious failure of capitalism to communism.

If BAC were a European bank, instead of an American one, where communists and/or socialists are at least a significant minority in elected parliaments and occasionally majority governments, blaming leftists would have a fig leaf. In America, there is scarcely a socialist, let alone communist, elected official and still less socialist policy, anywhere to be found at any level of governance from local dog catcher on up.


Sat, 09/10/2011 - 14:29 | 1654757 snowball777
snowball777's picture

Exactly; true socialists would've nationalized these shitbags like the Swedes did with Nordea, the toxic waste would be marked to the garbage valuations it should have, and the RE market would trashed, but on its way to recovery. They also would not have allowed unregulated derivative beanstalks, securitized sausageworks, and would have people like that dickhead Lewis in front of a firing squad.

Only complete and utter morons would confuse the fascist bullshit that's gone down since 2007 with communism or socialism of any stripe.

Sat, 09/10/2011 - 16:04 | 1654950 Rodent Freikorps
Rodent Freikorps's picture

Why argure terminology when they all lead to the same pit?

Cronyism is the enemy of any system, no matter the good, original intentions.

Washinton D.C. is now indistinguishable from an Imperial Court with its aristocracy and hangers on.


Sat, 09/10/2011 - 18:28 | 1655172 snowball777
snowball777's picture

Markets, democracy, regulation, and other 'systems' are all subject to human faults, but that doesn't mean that they have zero utility. Anarchy is only a viable option for the biggest bad-ass on the block , and only until the next bigger bad-ass comes along. If that's the future you want for your loved ones, you have my pity. If you take a close look at why those systems succumb to corruption and cronyism, you'll find a common thread of voluntary surrender of personal sovereignty. It's not the's us.

Sat, 09/10/2011 - 20:04 | 1655345 Rodent Freikorps
Rodent Freikorps's picture

I don't believe I ever advocated anarchy.

I'm failing to see where we are in disagreement on this particular theme.

It is just that big government allows all that bad human nature to be writ large.

If only we could find, and stay on, the middle path, we might actually do the best for the most.

Sat, 09/10/2011 - 22:54 | 1655582 snowball777
snowball777's picture

In the absence of the alternatives, what else is left?

And "small" government just enables different weasels to bring their broken psyches to the fore.

I'm all for a middle path, there's plenty of government I would willingly see down-sized or at least modified in the direction of fiscal sanity, but finding those rational enough to admit that this doesn't include all government and that what need not be cut should be paid for, is sispyphean in the current political arena. I believe that the journey back to the middle path starts with campaign finance reform so that "tiny voices" can be heard and heeded again over the din of vested interests. I want to see Americans back to work and lobbyists looking for work for 99 weeks.


Sat, 09/10/2011 - 23:30 | 1655628 sun tzu
sun tzu's picture

The problem with big government is that too few people have too much power. Without the Fed and TARP, the banks would have failed and justice would be served. Big government bailed out all the banks, gave them huge bonuses, and nobody went to jail. Bush, 0bama same shit. It used to be that the gamblers had to eat their own shit until all these government programs came along to bail them out.

Sat, 09/10/2011 - 20:53 | 1655454 New_Meat
New_Meat's picture


" It's not the's us."

'pendz on ur definition of the in-crowd.  In the broadest-sense, might be close.

But a non-Statist might have a different view.  Tough to find non-Statists in Cambridge, NYC, Austin, Berklee, Chi-Town, Princeton, Ithaca, and their ilk. (not to worry about Providence, the corruption exceeds that form of influence, one might include Chicago-land in this category).

I feel your provincalism.

- Ned

Sat, 09/10/2011 - 23:01 | 1655587 snowball777
snowball777's picture

Depends on your definition of 'statist'...I get the feeling that everyone except James Madison's ghost falls in that category according to some people; don't confuse provincialism with simply being marginalized.

Sat, 09/10/2011 - 15:30 | 1654881 yakmerchant
yakmerchant's picture

And your a self loathing libtard blaming capitalism for the failings of big govermnment.  We haven't had capitalism since that Fabian Socialist monster Woodrow Wilson set us on this path.   Capitalism means supply/demand and markets determine prices and allocation of captial.   If you think what we have is capitalism you are joking your self.  You are correct the socialists/communists aren't in charge, and the globalist corporatist fascist jack wagons are captaining this shithole battleship (with the gun of government hanging out the front).  The problem is they are using the wanna be marxists that are nothing but "useful idiots" to row the ship, and when the shit hits the fan the globalists will have gone to their private islands, and there will be a jillion self loathing marxist ass clowns that will try to demonize capitalism as the cause of this disaster.   I can't wait for some half educated worker of the party to relieve me of my private property and put me in an American gulag. 


Sat, 09/10/2011 - 15:51 | 1654923 snowball777
snowball777's picture

Because before "big government" there were never any market distortions from ridiculous concentrations of capital in the hands of a few? Does Teddy Roosevelt count as "big government" in your circles too?

You think the people of the Phillipines (or any of the hundreds of pieces of European empires) shared your glowing praise for capitalism in the late 19th century?

You think the Koch brothers don't fancy an island or two and that you aren't rowing their boat for them, chump?

It's not our fault the prime prerogative of the "invisible hand" is to jam itself up your ass; grow a brain or die a sycophantic acolyte of a dead religion.


Sat, 09/10/2011 - 16:47 | 1655024 yakmerchant
yakmerchant's picture

I actually do row the boat for the Koch brothers, and they pay me quite well to do it, and if I want to quit and take my labor elsewhere I can.   It's pretty pointless arguing with a card carrying red that went to such a fine liberal brain washing institution as Berkeley, but I think you are the one that has a religion you aren't recognizing,  I don't believe in things like "utopia", so spare me your lecture.  I'll just watch the rerun of "collectivism goes wrong" on TV as California tears itself apart in the coming years thanks to the failed policies of rocket scientists like yourself that refuse to recognize things like human nature.  

Sat, 09/10/2011 - 18:21 | 1655162 snowball777
snowball777's picture

a) I'm not a red, I just recognize a fallacy when I see one

b) I didn't go to Berkeley, I'm just another golden bear

c) The only religion I have is logic

d) Human nature is exactly why your 'utopia' is anything but

And, yeah, it is pointless for you to argue with scurry off to your next knee-bending session with the Koch brothers, skippy.

Sat, 09/10/2011 - 21:01 | 1655467 New_Meat
New_Meat's picture

a) explain the fallacy, if you can.

b) oh, sorry, so you are a Cal-wanna-bee?  We have all kindz of them hangin' around Central Square, just one stop up Mass Ave. from the "Most Perfect University in the World."  Somehow, they can't get accepted just one subway stop up Mass Ave to the NW.

c) Yes, but, well Marx didn't agree w/you here.  Might getcha' into trouble with the local collective.

- Ned

Sat, 09/10/2011 - 22:39 | 1655566 snowball777
snowball777's picture

a) that the elimination of "big government" will somehow bring about a return to an imaginary form of capitalism that is immune to corruption

b) no, i was perfectly happy to graduate from a state school magna cum laude with my loans paid, thanks. re-read the post above with your thinking cap engaged, piglet.

c) beyond a recognition of the mechanisms behind the cavaliers of credit, Marx and I don't agree on much...I think I'll live; the "local collective" drives SLs and 7 series and they're welcome to bring the static and test the effectiveness of their health coverage.


Sat, 09/10/2011 - 17:04 | 1655057 Landrew
Landrew's picture

They should really be referred to as the COCK Brothers, since they are boning all of us.

Sat, 09/10/2011 - 19:52 | 1655353 Rodent Freikorps
Rodent Freikorps's picture

No matter which side of the fence you are on, you can point to the other guy's billionaires.

Seems like a draw.

Or a waste of time.



Sat, 09/10/2011 - 20:11 | 1655382 Shirley Wilfahrt
Shirley Wilfahrt's picture

I'll drink to that.

Sat, 09/10/2011 - 23:02 | 1655588 snowball777
snowball777's picture

Or a symptom.

Sat, 09/10/2011 - 23:20 | 1655611 sun tzu
sun tzu's picture

I see you prefer to have Soros and Buffett shove a COCK in your ass

Sat, 09/10/2011 - 15:48 | 1654917 citta vritti
citta vritti's picture

sadly, whatever flavor of gubbmint you say it is -- socialist (and btw, most of the 1930s socialist platform is well entrenched in the U.S.), communist (ditto several aspects there, too), fascist (which in Germany was called, btw, National Socialism, and sadly, many aspects of those programs, too I fear are with us, though happily not the worst), capitalist, monarchy, oligarchy, democracy, there will be cronies for those in or perceived to be in power. The difference, is, we don't call our politicians socialists or communists or fascists because those were all horrors that were demonized early or that latterly we fought hot and cold wars against.

For me, a reasonable solution to reduce the impact of cronyism is to reduce the power wielded by those attracting cronies -- the State in its various forms. The United States were a special kind of republic, for a short while only, riven at its founding by the compromises over slavery, and subsequently by the offsetting sop of tarriffs enacted at behest of northeastern manufacturers and businesses. Read Bastiat, The Law. Lincoln, for all the good he did, did so at the cost of creating an overarching federal beast that now has grown too large and powerful. And with its growth under Wilson, Hoover, FDR and the rest, the institutions that support and perpetuate it, like the banking system and the military-industrial-congressional complex (as Ike named it in a draft of his farewell speech), have grown too powerful.

Obummer, or his speechwriter, just railed against what is imho, a pretty good solution, "this larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody's money, and let everyone write their own rules, and tell everyone they're on their own." As usual, the setting up of a strawman exaggerates the real program: as Richard Maybury has expressed it in 17 words comprising two laws: "Do all you have agreed to do and, do not encroach on other persons or their property."

Time for a reset, and not more business as usual.

Sat, 09/10/2011 - 16:08 | 1654957 snowball777
snowball777's picture

So, how did the 'minimal state' and capitalism fare in the face of names like Gould, Rockefeller, Stanford, Carnegie, Vanderbilt, Morgan, etc ad nauseam? Spin us a fairy tale about how the market is self-regulating as if we haven't already seen down that rabbit-hole back to feudalism and chattel. That the government is "too powerful" alone does not imply that it is either unnecessary or should be dissolved.

How exactly does Maybury plan to provide a means to enforce contract law without encroaching on someone's property to pay for it?

Platitudes are soothing, but they can't be substitued for rational thought at will.

Sat, 09/10/2011 - 23:42 | 1655645 sun tzu
sun tzu's picture

Spins us a fairy tale about how the government has successfully regulated the market and punished the criminals. We have over 2 million bureaucrats and this was allowed to happen and nobody in government took any steps to stop the run-up to the disaster. Government only helped blow up the bubble. Fannie and Freddie bought 45% of the toxic mortgages, no questions asked, then dumped the losses on the taxpayers. The central planner Ben Bernanke denied their was a housing bubble as late as 2006. Nobody of importance went to jail under Bush or 0bama. Countrywide CEO Angelo Mozilo was recently given a slap on the wrist fine by the DOJ.

  • Your big government did nothing to stop the bubble
  • Your big government encouraged and pumped the bubble
  • Your big government bailed out the bankers and ensured they got huge bonuses with taxpayer money
  • Your big government failed to prosecute anyone for the mess
  • Your big government is destroying the economy with ZIRP which is destroying the currency
  • Your big government is crushing small banks and credit unions with thousands of pages of new regulations while refusing to enforce the old regulations against the big banks

Feudalism was all about big government in control of the serfs. At least the feudal lords only imposed a 10% tax on the serfs. Our government is taking up to 50% in federal, payroll, state, and local taxes. Just to let you know, the US Constitution and Bill of Rights was about limiting the power of government after the Founding Fathers had to deal with big government from King George. 


Sun, 09/11/2011 - 15:25 | 1656966 honestann
honestann's picture

Thanks for helping enlighten organisms that are clearly dumber than rocks.  I'm not sure we'll ever reach anyone, but we can try.

Sat, 09/10/2011 - 23:25 | 1655618 sun tzu
sun tzu's picture

This is all about the failures of the socialist centrally controlled economy. The government bailed out those failed gamblers. In a capitalist free market economy, they would have been allowed to fail. 

Are you so stupid that you can't see the socialist programs in place? What is the FHA. FHLM, Fanie, Freddie, HUD, SOCIAL Security, Medicare, Medicaid, Section 8, TANF, WIC, EBT? Are those all capitalist programs? That prett ymuch answers my question. You really are that stupid. 

Sun, 09/11/2011 - 00:00 | 1655667 sun tzu
sun tzu's picture

It is tea-partyesque to attribute the obvious failure of capitalism to communism.

Only an utter moron would confuse banker bailouts with a free market. This bailout nonsense began in 1998 with LTCM and has led to this monstrosity of welfare for Wall Street.

In a free market, some businesses thrive and some fail. The Marxist idiots think that all businesses and ideas are supposed to thrive in a free market or else it is a failure. Unlike communism, nobody has ever claimed that the free market is a workers paradise or a utopia.

Sat, 09/10/2011 - 14:15 | 1654726 Sudden Debt
Sudden Debt's picture



They may have fucked it up for everybody else, but they sure did take care of themselves.


To bad Obama will bail them out again...

Sat, 09/10/2011 - 14:23 | 1654747 snowball777
snowball777's picture

Fuck the Bank of Lynching America Countrywide in every available orifice until they bleed out of their eye sockets.

Sat, 09/10/2011 - 16:36 | 1655011 New_Meat
New_Meat's picture

"I'll keep an eye out for you, sonny."

Sat, 09/10/2011 - 18:15 | 1655150 Landrew
Landrew's picture

Damn you are good!

Sat, 09/10/2011 - 23:44 | 1655651 sun tzu
sun tzu's picture

Your words mean nothing. 0bama and Geithner will bail them out again and you will vote for 0bama again. 0bama's buddy Warren Buffett didn't just toss $5 billion on the craps table without knowing the outcome of the game is fixed.

Sat, 09/10/2011 - 14:43 | 1654796 digalert
digalert's picture



Oh B of A

If only they could have their cake and eat it too.

Sat, 09/10/2011 - 14:59 | 1654831 honestann
honestann's picture

Bank of America must die.  All big banks must die.  EVERY settlement of EVERY kind is a massive victory for the predators who caused the destruction in the world economy, and who fleeced everyone on earth.  These organizations must DIE so the executives and workers lose their jobs.  For groups of people to be allowed to destroy the entire world economy, then all sorts of twisting and turning to be implemented to protect these destroyers, is corruption beyond limit.

Terminate BofA and ALL large banks.

Do not protect predators.

Sat, 09/10/2011 - 23:49 | 1655657 sun tzu
sun tzu's picture

The government is corrupt, the regulators are corrupt. They will not send anyone to jail, only bail them out with your tax dollars. When will you people understand? Starving the beast is the only way to end the madness. 

Sat, 09/10/2011 - 15:10 | 1654848 rodeorider
rodeorider's picture

BofA is a Special Prosecutor's wet dream. Could provide TV entertainment for years. The problem is the role of Special Prosecutor died a slow and miserable death as corruption engulfed the branches of government. It's ok to call for a special prosecutor to go after petty shit like firing of US attorneys, but BofA, nothing to see here... move along. Disgusting at the apathy of both parties. They both have their names written large in the Madame Brian Moynihan's little black book of kinky clients.

Sat, 09/10/2011 - 15:16 | 1654862 mitchrothschild
mitchrothschild's picture

here's a guess.  the investment bank (ML) under montag joins GS.  JPM get the retail bank storefronts.  the ML retail broker storefronts go to somebody, maybe MS/DW.  WFC gets some kind of very sweet heart deal (ever hear of warren buffet)  to take over servicing all the countrywide stuff.  all of this backed stopped by fed and treasury.

Sat, 09/10/2011 - 15:39 | 1654895 carbonmutant
carbonmutant's picture

Just because the current administration "won't allow it", doesn't mean that the next one will follow the same path.

Sat, 09/10/2011 - 15:54 | 1654920 Johnny Yuma
Johnny Yuma's picture

Banks will be the Tobacco companies of the past. This is just the beginning of the lawsuits to come down the pipe. BofA will be forced into a pre-packaged bankruptcy only titled something else. Oh, I know  "Operation New BAC". Wait they're already setting the stage for that... I think it's pretty clear what's in store. The bank is now divided into two divisions, the commercial bank and the consumer bank with their future emphasis being in the commercial bank side. Isn't that convenient. Merrill will probably be spun off, U.S. Trust either sold or folded into Merrill, Country Wide mortgage division spun off and the consumer deposit bank split off or sold and all the bad assets parked in a seperate entity and fed to none other than the Federal Reserve...

Sat, 09/10/2011 - 15:55 | 1654931 Founders Keeper
Founders Keeper's picture

The asbestos trust fund idea is an interesting play.  Thanks for the article TD.

I don't think BofA will use the trust fund idea.  It's too late.  Yeah, they may talk again of trying it, and may actually attempt it.  But, we are creeping into that panicky disorganized stage.  Especially behind the scenes at TBTFs. 

Too late for any meaningful changes.



Sat, 09/10/2011 - 16:02 | 1654944 Dan The Man
Dan The Man's picture

what makes you think they are going bankrupt?  they will simply become the Bank of Amerika Mortgage Compensation Corporation.   And off they go again!



Sat, 09/10/2011 - 18:28 | 1654994 JW n FL
JW n FL's picture




you are just being negative!

think of all the bonuses that will be made available once the new TARP / Emerigency FED Window / Secret Loans are booked!

it is NOT! Paper profits if the United States Tax Payer Monetizes it for them!!

or wait a minute... it is paper profits but not that kind! LOL!! Silly!

Sat, 09/10/2011 - 17:02 | 1655051 Lester
Lester's picture

Q:  When was communism ever anything BUT cronyism?

In fact, considering that it was city of london and wall street firms that financed Lenin and Trotsky to be their proxies and take-down the richest man in the world, The Russian Czar; what has changed?  Nomenclature or definition???

Vladimir Putin is the front man these days.  The old ways are gone; moved to USA when the Berlin Wall came down and USSR collapsed.  Hell, USA was sending Russia a pallet of $100 bills every day to keep them afloat...  Whose interests did that serve?

Cronyism is communism.  Sometimes they let an enterprising smalltime scum worm his/her way into the pack.  We've seen that here as well.  All those junior republican congress-folk from day of "contract w/America" to riding the Tea Party coattails.


All that was entrusted to our leaders, in every social structure, from education, to the professions, to business, to finance and insurance/banking has FAILED.  Not collapsed yet, but the failure was intentional and so is the collapse into rubble.

The cronies though in their zeal and greed failed to grasp that when you collapse the whole world, you got nowhere to land on your feet...





Sat, 09/10/2011 - 17:21 | 1655085 Seasmoke
Seasmoke's picture

The cronies though in their zeal and greed failed to grasp that when you collapse the whole world, you got nowhere to land on your feet...


and thats why the whole thing just doesnt make sense to me......why would anyone do that knowing the end result doesnt benefit them

Sun, 09/11/2011 - 15:41 | 1657017 honestann
honestann's picture

Only two fundamentally different systems exist.

#1:  We are free, have no positive obligations to anyone and only have the negative obligation "don't destroy, harm or defraud others or their property".  In this case, everyone enjoys/bares/suffers ALL consequences of their actions, and ZERO consequences of the actions of others.

#2:  We are slaves, have all sorts of artificial positive and negative obligations arbitrarily dictated by a power-elite, whether that be a king, a gang, a so-called political party, or even majority vote (democracy).  In that system, everyone (except the eliites in control) enjoys/bares/suffers whatever consequences the elites dictate (or do to them directly), and nobody has any chance at a good, stable, predictable life limited to the consequences of their own actions.

Sat, 09/10/2011 - 17:18 | 1655075 williambanzai7
williambanzai7's picture

I don't think we should find solutions for the benefit anyone has been involved in a criminal racketeering enterprise.

Until we purge the system of those elements, no amount of fancy footwork in the US Bankruptcy Courts will solve the problems caused by our broken banking and financial system.

Sat, 09/10/2011 - 21:08 | 1655477 New_Meat
New_Meat's picture

<<<<WB7--I'm beaming the meme of : "Clear the market" ... "Clear the Market" ... cLeAr tHe MaRkEt. ..." into your creative center.  You have no idea that I am doing this to you.  You are still sleepy (for the 3.4 minutes/day that you are permitted to sleep,) you remain sleepy, but you will obey the command to explicate about "Clear the Market">>>>

We now return to our regularly scheduled posting.

- Ned

[ed. dang, subscript works in edit window/not in thread]

Sat, 09/10/2011 - 17:19 | 1655078 nah
nah's picture

ride the snake to the lake the snake he is long seven miles hes old his skin is cold


Sat, 09/10/2011 - 17:24 | 1655093 The Heart
The Heart's picture

Ten years after...have we learned anything?

Here is an excellent video by AE for 9/11 truth:

Pass this around folks and especially send it to those who still think some clown in a cave and 19 guys with box cutters outsmarted our 400 billion dollar NORAD defense system.

Also, a big question to ask them is, if fires bring down buildings at the speed of gravity, why doesn't my BBQ or fireplace grill come crashing down at the speed of gravity when lit and on fire for hours and hours?

Who was responsible for 9/11?

Sat, 09/10/2011 - 17:32 | 1655099 Problem Is
Problem Is's picture

"When some look at all of the litigation arising from Bank of America's big role in the U.S. mortgage mess,"

Hey Tyler, your a "some"...

Big upgrade from "fringe blogger"...

Sat, 09/10/2011 - 18:05 | 1655133 Anonymouse
Anonymouse's picture

Since BAC (and the other TBTFs) have an unlimited line of credit with the Fed, they should solve their problem the way the Federal Reserve did with its balance sheet this year.

They should just create a negative liabilitity to cover the claims (and any other losses).  That way, their capital base stays intact (at least to anyone who never reads further than the headlines)


Sat, 09/10/2011 - 18:08 | 1655134 kaiserhoff
kaiserhoff's picture

Be careful what you ask for...  I see the appeal of this, but the results would be awful.

All of the money would go to MBS pools who lost big bucks, easy to quantify, lawyered up until the second coming.

Almost no money goes to homeowners, whose losses are mostly speculative, and hard to prove.

Also homeowners go from a fully protected court room setting, where the bank's bad behavior is an affirmative defense to foreclosure, to a half-assed arbitration setting, where there are no rules, and rarely any rights of appeal.  As usual, the little guys lose.  Food for thought.

Sat, 09/10/2011 - 18:41 | 1655196 chunga
chunga's picture

Yes. Individual lawsuits (millions of them) are the way to go. They are very vulnerable to aggressive and competent legal attack.

Rogue Foreclosure Mill Harmon Law at it again.

Sue the pricks...

Sat, 09/10/2011 - 23:19 | 1655610 TwelfthVulture
TwelfthVulture's picture

The litigants will be the investors who bought the mortgages, not home owners who borrowed the money.

Sat, 09/10/2011 - 18:22 | 1655160 Landrew
Landrew's picture

I think Tyler's thought was at least with a settlement like this home owners would get something rather then in a bankruptcy which is soon due? There are no good options for the little guy, the only hope is Buffett a.k.a. Mr. Potter takes it up the ass.

Sat, 09/10/2011 - 23:17 | 1655608 TwelfthVulture
TwelfthVulture's picture

Mortgages are held on a bank's balance sheet as ASSETS.  In a bankruptcy proceeding of the bank, the mortgagor (home owner) would be unaffected.  If BAC were to be liquidated, the assets (mortgages) would be sold to the highest bidder.  This may even benefit the mortgagor.  For instance, if the new mortgagee bought the mortgages for "pennies on the dollar," they may be more inclined to participate in some grand refi scheme since a writeoff of principal might be irrelevant (They bought a million dollar asset for $100K, a writedown of 50% to $500K, still leaves a 500% ROI, excluding interest payments).

Sat, 09/10/2011 - 21:10 | 1655481 monopoly
monopoly's picture

Am not so sure this will turn out to be a repeat of the last bailout. We need to give the sheeples a little more credit this time. Printing more money to bail out any bank again I think will have repercussions. Politicians know the powder keg is ready to explode if we print more money to bail out more banks that pay more bonus money, perks and salaries. It is going to be a coin toss from my perch.

If we let BAC just go down, we can pick up the pieces and distribute to solvent banks and help with capital to the good bank. Obviously what we should have done 3 years ago.

I think the backlash on Obama, Bernank and Congress will be more than they will be willing to put up with. Going to be interesting for sure. Oh yes, C right behind BAC. Stock now in the 3s before reverse split. Those hardly ever work.

Sat, 09/10/2011 - 22:17 | 1655540 unununium
unununium's picture

To the fool who exercised the BAC calls I sold you, I give my thanks.  Now my bearishness knows no expiration date.


Sat, 09/10/2011 - 23:04 | 1655590 snowball777
snowball777's picture

C'mon...don't you feel just the teenciest twinge of guilt at having hustled the mentally retarded? ;)

Sun, 09/11/2011 - 01:48 | 1655770 put_peter
put_peter's picture

I agree that the criminals should be in jail. However what i learnt (from the  Parker bros monopoly) when i was a kid is that when things get really rough the safest place to be is indeed in the jail :D


Sun, 09/11/2011 - 12:16 | 1656302 ghostcommander
ghostcommander's picture

All things considered, America would be better off if BOA went bankrupt and out of business. Their stockholders of these toxic mortgage assets would be forced to take a haircut on their return or liquidated entirely.
Those homeowners  facing foreclosure and those underwater  would have their principal reduced, leaving them with more cash to spend on goods and services, thereby stimulating the economy.

The other banks could pick up the pieces and continue on.

This "too big to fail" concept is pure, unadulterated BS. Pick any sector of our economy-What happens when a company, or a few companies fail? The remaining companies pick up their customers, and/or assets and continue on.

Sun, 09/11/2011 - 14:31 | 1656791 victor82
victor82's picture

Why should ANY TBTF bank go out of existence when the PBOC can come in and buy them for Pennies on the Yuan?

You heard it here first. 

The Chinese aren't stupid. Just patient. And smart enough not to buy the toxic mortgages. And Goldman can't make the PBOC do anything.

Our political class sold out the country a long time ago. They'd put a positive spin on any Chicom attempt to take over our collapsed merchant banks.

Sun, 09/11/2011 - 16:56 | 1657231 agrotera
agrotera's picture


Sun, 09/11/2011 - 21:57 | 1658252 ToNYC
ToNYC's picture


If you are still standing around talking; you ain't playing.

Tue, 09/13/2011 - 22:11 | 1666048 moxia19
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