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Massive Wave Of Lawsuits To Be Filed By The US Against America's Biggest Banks As Soon As Tomorrow

Tyler Durden's picture




 

In a move that could either send BAC stock limit down overnight or send it soaring (we are still trying to figure out just what is going on here), the NYT has broken major news that the US is preparing to go nuclear on more than a dozen big banks among which Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, in an attempt for Fannie and Freddie to recoup $30 billion if not much more. The lawsuit is expected to hit the docket in the next few days: "The suits stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims." Now, taken at face value, this would mean that Bank of America can kiss its ass goodbye as unlike the Walnut Place litigation, this will take place in Federal Court where Article 77 is not applicable. Yet there is something that gives us pause: namely logic, captured by the following words: "While I believe that F.H.F.A. is acting responsibly in its role as conservator, I am afraid that we risk pushing these guys off of a cliff and we’re going to have to bail out the banks again,” said Tim Rood, who worked at Fannie Mae until 2006 and is now a partner at the Collingwood Group, which advises banks and servicers on housing-related issues." In other words: if the banks are sued, and if justice prevails, the end of the world is nigh and cue TARP 2 - XXX. Now where have we heard that argument over, and over, and over before.

From the NYT:

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

 

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

 

In July, the agency filed suit against UBS, another major mortgage securitizer, seeking to recover at least $900 million, and the individuals with knowledge of the case said the new litigation would be similar in scope.

 

Private holders of mortgage securities are already trying to force the big banks to buy back tens of billions in soured mortgage-backed bonds, but this federal effort is a new chapter in a huge legal fight that has alarmed investors in bank shares. In this case, rather than demanding that the banks buy back the original loans, the finance agency is seeking reimbursement for losses on the securities held by Fannie and Freddie.

The prestory is by now known by everyone:

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

 

And last month, the insurance giant American International Group filed a $10 billion suit against Bank of America, accusing the bank and its Countrywide Financial and Merrill Lynch units of misrepresenting the quality of mortgages that backed the securities A.I.G. bought.

 

Bank of America, Goldman Sachs and JPMorgan all declined to comment. Frank Kelly, a spokesman for Deutsche Bank, said, “We can’t comment on a suit that we haven’t seen and hasn’t been filed yet.”

The response? Why Paulson-esque Mutual Assured Destruction:

But privately, financial service industry executives argue that the losses on the mortgage-backed securities were caused by a broader downturn in the economy and the housing market, not by how the mortgages were originated or packaged into securities. In addition, they contend that investors like A.I.G. as well as Fannie and Freddie were sophisticated and knew the securities were not without risk.

 

Investors fear that if banks are forced to pay out billions of dollars for mortgages that later defaulted, it could sap earnings for years and contribute to further losses across the financial services industry, which has only recently regained its footing.

The total litigation amount will not be in the trillions... but will certainly be in the tens if not hundreds of billions.

While the banks put together tens of billions of dollars in mortgage securities backed by risky loans, the Federal Housing Finance Agency is not seeking the total amount in compensation because some of the mortgages are still good and the investments still carry some value. In the UBS suit, the agency said it owned $4.5 billion worth of mortgages, with losses totaling $900 million. Negotiations between the agency and UBS have yielded little progress.

Bottom line: the gloves are coming off, and while we want to believe that this is the final nail in BAC's coffin (Quinn Emanuel is counsel for the FHFA), we do have a nagging feeling that the US will not purposefully do everything in its power to destroy its banking sector.

 

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Thu, 09/01/2011 - 22:31 | 1624753 j0nx
j0nx's picture

WTF is going on today?? Lots of chatter about the government finally doing their fucking job and going after these shitbirds. Maybe Barry and CONgress have finally seen the fucking light?

Thu, 09/01/2011 - 22:33 | 1624758 WallStreetClass...
WallStreetClassAction.com's picture

no shit. a good question. or is this the next level of distracting the attention?

Thu, 09/01/2011 - 22:42 | 1624791 Ahmeexnal
Ahmeexnal's picture

campaign propaganda for Ogolfer.

and campaign funds too.

anyone with any $ on those banks will be lucky to recover a dime for every dollar in deposits.

FDIC is a joke.

Thu, 09/01/2011 - 22:43 | 1624807 j0nx
j0nx's picture

Umm really? You think they really want to incite bank runs on every bank in America by not honoring deposits? Think again.

Thu, 09/01/2011 - 22:45 | 1624818 Ahmeexnal
Thu, 09/01/2011 - 22:52 | 1624857 eureka
eureka's picture

It could all be about Obama's re-election - flex a little muscle for the plebs - right?

Thu, 09/01/2011 - 22:54 | 1624869 Bananamerican
Bananamerican's picture

"if the banks are sued, and if justice prevails, the end of the world is nigh"

well, then let's NOT have justice prevail!

...you're welcome amerika

Fri, 09/02/2011 - 00:09 | 1625138 TexasAggie
TexasAggie's picture

Remember, Clinton's AG threatened to sue if the banks didn't increase loans (mortgages into low income neighborhood (ACORN backed), The Sec of Housing essentially promised that Fannie and Freddie would buy the mortgages.  I hope the banks actually defend against these suits, but they will probably be offered a deal and a lot of the difference between what the gov asks and settles will go to BHO in campaign contributions. We, taxpayers, get 10 cents and BHO collects 90cents of every dollar.

Fri, 09/02/2011 - 00:27 | 1625165 AnarchyInc
AnarchyInc's picture

The wisest thing that I've ever heard from an Aggie.  Have fun getting smashed in the SEC

Fri, 09/02/2011 - 00:50 | 1625207 Waffen
Waffen's picture

either you are a bitter shorthorn or one of the losers still hanging onto the horns nuts in the BIGXII-III.

A&M going to the SEC is the best thing the administration has done in my lifetime and getting smashed a few years is a ok considering the long-term benefits.

Fri, 09/02/2011 - 01:51 | 1625286 Michael
Michael's picture

Barry and the Shit Bags need to raise money to pay for big bloated government anywhere they can get it at this point.

Chapter 7 banks don't need to be bailed out, they need to be liquidated.

Fri, 09/02/2011 - 03:14 | 1625355 crazyjsmith
crazyjsmith's picture

B and Co. are goig to try to buy us for around $50B.

They are going to shake down the banks for some coin and parade it around like the Lion King.  Just like they shook down BP in the Gulf.  Big media bonanza = Re-elected Barry O  

They even shook down Uncle Warren for $5B, basically made him ante in, kind of like a Tithing to that big wooden owl in the freaky woods.  

 

We'll will probably see banks get split up, but they will retain full control of capital and capital flows, a controlled demolition (many relevant analogies come to mind). The eye of the pyramid remains in place.

 

 

Fri, 09/02/2011 - 03:49 | 1625377 Michael
Michael's picture

Not if we get the poking angle right.

Fri, 09/02/2011 - 04:19 | 1625393 Michael
Michael's picture

I'm thinking about writing an auto-biography;

Dr. Ron Paul,

Physician who delivered over 4,000 kids.

Fri, 09/02/2011 - 06:56 | 1625465 nmewn
nmewn's picture

That faint chortle everyone hears is Armando Falcon saying...told you so, you pandering shills.

Thu, 09/01/2011 - 23:05 | 1624937 SoCalBusted
SoCalBusted's picture

yup - Banks made billions, fine them millions.  "Gee look at the great job we did for the little guy!"

Thu, 09/01/2011 - 23:11 | 1624968 Not A Pundit
Not A Pundit's picture

Turbo Tax Timah might reply to that with:

"Let them make millions so we can then screw them and transfer the money to the bankrupt USA."

When a school of pirahnas get hungry enough, do they feed upon themselves?

Fri, 09/02/2011 - 00:01 | 1625120 DoChenRollingBearing
DoChenRollingBearing's picture

http://finviz.com/futures.ashx 

shows only modest futures down for the Dow (23:59) and essentially flat movement in gold despite:

-- BIG .gov lawsuits vs. the TBTF banks

-- the BIG Wikileaks dump (the other big ZH story tonight)

What's it going to tkae?

Fri, 09/02/2011 - 00:09 | 1625136 bankrupt JPM bu...
bankrupt JPM buy silver's picture

WARNING!! There is a large fucking SMILE on my face.

Fri, 09/02/2011 - 00:40 | 1625189 cossack55
cossack55's picture

Nukes

Fri, 09/02/2011 - 00:45 | 1625199 RockyRacoon
RockyRacoon's picture

What's it going to tkae?

At some point... blood.

Fri, 09/02/2011 - 08:33 | 1625637 mendigo
mendigo's picture

please remain in your seat

we have everything under control

Thu, 09/01/2011 - 23:32 | 1625037 Freddie
Freddie's picture

+100

Fannie Mae and Freddie are like the post office.   ACORN aka community organizers (including you know who) sued banks to force them to make loans to people who could not pay them back.   This is all Cloward Piven to destroy capitalism and take down the USA>   The banks are sh*t but the govt and Fannie and Freddie are worst - packed with Clinton/Obama cronies setting up 2008.

I had to go into Chase twice recently. The areas the branches in were largely white.  1 out of 15 employees in both branches were caucasian.   The big banks are scum but if you think the govt is the good guy - you are sadly mistaken.  This is hussein shaking down campaign money.

Thu, 09/01/2011 - 23:47 | 1625076 macholatte
macholatte's picture

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

And what about Franklin Raines?

Franklin Raines is an Obama financial advisor who took $90 million in bonuses while running F-mae and F-mac straight in to the ground.  He was also directly involved in causing the subprime financial crisis.  This scum bag basically "cooked the books" to put more money in his own pockets and in the pockets of his "pals".  However, for some strange reason, Obama and the Democrats don't seem to be a bit outraged by Raines "performance" bonuses.
http://groups.google.com/group/rec.gambling.poker/browse_thread/thread/bdd1eea51bef964e

Thu, 09/01/2011 - 23:50 | 1625088 macholatte
macholatte's picture

TBTF, Freddie, Fannie GS, BofA, JPM and the rest of the lot needs to go directly to bankruptcy court, do not pass go and do not collect $200 B in bonuses.

Fri, 09/02/2011 - 00:41 | 1625192 cossack55
cossack55's picture

Way past that point. Their court is on the other side of the river Styx.

Fri, 09/02/2011 - 05:51 | 1625418 zhandax
zhandax's picture

Youse guys are forgetting who pulls the strings in DC and who is up for re-election next year.  Read Bruce Krasting's post from yesterday....http://www.zerohedge.com/contributed/feds-plan-rumors-news

This is simply the first step in the process.  First, demonize the mortgage originators (the big banks and their patsys).  Second, introduce this grand plan to 'refi everyone left out of the .guv gravy with a new 4% mortgage'.  Third, make it look like .guv is 'stuffing it down the bank's throats'.    Fourth, refi all the current mortgagees at 4%.  Now all those borrowers have an extra few hundred every month courtesy of obummer, just in time for election.  Never mind that it pays down the fed's MBS balances and gives them an extra $trillion to buy bonds (or derivatives, or whatever).  Fifth, take a victory lap at the next inaugural and enjoy another four years of green fees on us.

The bankers get to look victimized by .gov.  obummer gets the best PR one could hope for going into an election.  Ben gets to reload his heliccopter and we peons even get an extra hundred or so in our pockets each month.    And, truth be told, everyone here gets to celebrate when gold hits $3000/oz next September because of all that new money sloshing over the seawalls on top of of all the liquidity already pumped into the system.  Problem is, there is still no driver for jobs out there and all that new money is going straight into hard assets.

Fri, 09/02/2011 - 09:43 | 1626120 FEDbuster
FEDbuster's picture

My "hard assets" include 7.62 x 39 and #10 cans of food.  This may be about making Barry look tough and populist, but the results may be the trigger to TEOTWAWKI.  I always thought it would be the end of reserve currency status for the dollar, but a take down of 30 major banks around the world would have the same effect.  Banksters still have some leverage though, so this could just be a smoke bomb tossed out by a desperate failing President.

Fri, 09/02/2011 - 00:10 | 1625141 Dineroguru
Dineroguru's picture

Thank you for trotting this lap-dog of the public sector/private sector/political hack multimillionaire crooked as a snake, scum bag...He does not get nearly enough credit for this mess he created nor does Billy Clinton and another stealth SOB to the bone limo-lib ROBERT RUBIN-- who of course was Turbo Tax Timmy's Mentor and Champion. After Little Timmy crapped his pants as NY Fed Gov Bob Rubin couldn't crow more loudly about moving him into the Treasury....  What a group of "Capitalists"!

Fri, 09/02/2011 - 00:48 | 1625204 RockyRacoon
RockyRacoon's picture
Question of Raines and Obama connection

On 16 July 2008 The Washington Post reported that Franklin Raines had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters.".[25] Also, in an editorial on August 27, 2008 titled "Tough Decision Coming", the Washington Post editorial staff wrote that "Two members of Mr. Obama's political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae."[26] On September 18, 2008, John McCain's campaign published a campaign ad that quoted the Washington Post reporting regarding Raines and Obama. The ad also notes that "Raines made millions and then left Fannie Mae while it was under investigation for accounting irregularities".[27]

Neither Raines nor the Obama campaign had disputed the Post's reporting before the ad. The text in question consisted of one sentence in each article. After McCain's attack ad however, both denied that Raines was or had been a provider of advice to Obama or the Obama campaign.[28][29][30]

In later commentary the Washington Post (the original source) described McCain's attempts to connect Obama with Franklin Raines based on their reporting as "a stretch" and said all reporting they did about the matter actually stems from a single conversation a reporter had with Raines in which she recalls Raines said he "had gotten a couple of calls from the Obama campaign". When the reporter queried Raines to the nature of the calls he said "oh, general housing, economy issues".[31]

Additionally, an email hoax falsely claims Raines was made "Chief Economic Advisor" for the Obama presidential campaign.[32]

 

http://en.wikipedia.org/wiki/Franklin_Raines

Fri, 09/02/2011 - 01:57 | 1625291 Manthong
Manthong's picture

Franklin Raines, former Clinton "Budget Chief" (gag) is in the middle of that dung heap and should be right up at the front of the line to the National Razor for a permanent haircut.

Heard on the radio news a  claim it is Fannie suing the banks.

Isn't that kind of like Butch suing Sundance for robbing trains?

Fri, 09/02/2011 - 04:36 | 1625398 Sp00ky
Sp00ky's picture

Really?  Everyone here bitches cos Obama and crew does nothing about the bankers, and now everyone bitches cos they do?  Everyone sez the banks have bought him off, Wall St owns him?

Maybe this is the reason Lord Blankfein retained counsel, eh?  He and his minions surely see something bigger coming soon.

Fri, 09/02/2011 - 06:03 | 1625437 OldPhart
OldPhart's picture

Step 1:  Create a problem

Step 2:  Allow the problem to blow up

Step 3:  Find a crony to blame it on, slap wrist

Step 4:  Declare solution to problem, and extol the humiliation and torture the crony endured

Step 5:  Save croney as necessary evil, etc

Step 6:  Campaign on toughness, solutions to problems, etc

Step 7:  Return to Step 1

 

Fri, 09/02/2011 - 07:03 | 1625472 ISEEIT
ISEEIT's picture

This has nothing to do with justice and everything to do with reelection. The extremist running the regime are cold blooded, Link is a tiny slice of background on the religion AKA 'progressivism'.

http://thedailybell.com/2872/Adrian-Krieg-The-Evil-Marionette-Master

Fri, 09/02/2011 - 07:37 | 1625500 MassDecep
MassDecep's picture

The Banks run these clowns. If you Sheeple can't see through this, I really gotta question the prestige of ZH subscribers. Pull your head out of your asses and common sense will reveal who your masters really are.

Thu, 09/01/2011 - 23:00 | 1624900 Long-John-Silver
Long-John-Silver's picture

Timmy will print whatever amounts of fiat digital or paper dollars that will be required to replace the peons deposits.

Thu, 09/01/2011 - 23:41 | 1625066 august west
august west's picture

i agree. the number that sticks out in this article is 30 billion.  30 billion is chump change in the scope of things. this was a purposeful leak imo to make it look like taxpayers won't be the patsy for fannie and freddie anymore. 

Thu, 09/01/2011 - 23:04 | 1624931 MachoMan
MachoMan's picture

They don't have any choice...  the FED has painted itself in a corner and they actually have to develop goodwill before they can implement any meaningful social policy (and have any chance of it being accepted).  They throw us a bone every once and a while and we don't piss in their shoes.

Fri, 09/02/2011 - 00:14 | 1625146 Dineroguru
Dineroguru's picture

Great call MachoMan!  Spot on.  Buffet is worried about a revolution and they need to paper it over..

Sun, 09/04/2011 - 07:09 | 1631098 e-recep
e-recep's picture

spot on. buffet like any other big wig is afraid of the french revolution II. his head will be the first to roll.

Fri, 09/02/2011 - 00:14 | 1625147 Dineroguru
Dineroguru's picture

Great call MachoMan!  Spot on.  Buffet is worried about a revolution and they need to paper it over..

Fri, 09/02/2011 - 00:52 | 1625208 RockyRacoon
RockyRacoon's picture

The situation reminds me of the abusive parent or spouse:   Slaps the kids and old lady around and then treats them to candy and goodies to assuage the guilt.   Slap the banks with a minor ($30 bil -- chicken feed) fine, and then bail their asses out. What a dog and pony show.

Fri, 09/02/2011 - 00:13 | 1625142 Sambo
Sambo's picture

Dime on a dollar? Those who have deposited 2.5 million or greater will get back 250K for their Master relationship accounts. Others may have to wait ...a long time... to get the dime.

Fri, 09/02/2011 - 00:57 | 1625217 Whalley World
Whalley World's picture

Did Barry give it to Warren or what!

Thu, 09/01/2011 - 23:49 | 1625082 Kali
Kali's picture

Shark frenzy, they are all starting to eat each other.

Fri, 09/02/2011 - 00:48 | 1625202 sun tzu
sun tzu's picture

Fannie and Freddie have lost over $1 trillion on bad debt. Now the banks get sued for $30 billion. That's 3 cents on the dollar

Fri, 09/02/2011 - 01:05 | 1625235 Kali
Kali's picture

Agreed, but this is just the beginning.  Just think how J6P is gonna react when it is recognized, legally, these fookin crooks stole their homes and punted us all into a depression.  This isn't just about the money.  The peeps will be clamoring for blood.  And the fingers at the top will all start pointing at each other.

Fri, 09/02/2011 - 10:06 | 1626261 citta vritti
citta vritti's picture

Isn't that about the same rate as the $8.5 billion proposed BAC et al. settlement (or maybe that's 2 cents)?. Hmmm. 

Feds simply can't let the statute of limitations run - that's basic malpractice, however you spin it. And this will give the federales more input into settling things in their and their friends' favor. 

This is one of those times that Reagan was right: The scariest words in the English language are, "I'm from the government and I'm here to help." If only he and his administration had done more to live up to them.

We find ourselves again at a Berlin moment: Tear down these banks, Mr. President.  

Fri, 09/02/2011 - 12:10 | 1626810 Breaker
Breaker's picture

"Fannie and Freddie have lost over $1 trillion on bad debt. Now the banks get sued for $30 billion. That's 3 cents on the dollar"

That's pretty much what will always happen when the government sets things up so that rewards go to bankers (money), congressmen (power and money), and Fed administrative agencies (pure power and budgets) while risks are on the taxpayer. There is noone particularly interested in protecting the taxpayer--the symbiotic relationship is between Wall Street and the government who split up the "rewards" part. The taxpayers are sometimes pesky but they have a short attention span so there are folks very interested in making sure the taxpayers do not upset the apple cart.

Thus, this is set piece theatre intended to keep the apple cart upright by deflecting victim (taxpayer) attention from the source of the problem--a government powerful enough to create this problem in the first place--without atually hurting the banks any more than necessary. After all, Wall Street contributed hugely to Obama's campaign in 2008 and the pain to be inflicted will be as little as possible. But there needs to be a publically designated bad guy here and it cannot be the government or the whole shebang falls apart. So the evil bankers will dutifully play their role and the real evil genius (the government) will continue to accumulate money and, more important, power as a result of this sequence of events.

Fri, 09/02/2011 - 12:11 | 1626815 Breaker
Breaker's picture

"Fannie and Freddie have lost over $1 trillion on bad debt. Now the banks get sued for $30 billion. That's 3 cents on the dollar"

That's pretty much what will always happen when the government sets things up so that rewards go to bankers (money), congressmen (power and money), and Fed administrative agencies (pure power and budgets) while risks are on the taxpayer. There is noone particularly interested in protecting the taxpayer--the symbiotic relationship is between Wall Street and the government who split up the "rewards" part. The taxpayers are sometimes pesky but they have a short attention span so there are folks very interested in making sure the taxpayers do not upset the apple cart.

Thus, this is set piece theatre intended to keep the apple cart upright by deflecting victim (taxpayer) attention from the source of the problem--a government powerful enough to create this problem in the first place--without atually hurting the banks any more than necessary. After all, Wall Street contributed hugely to Obama's campaign in 2008 and the pain to be inflicted will be as little as possible. But there needs to be a publically designated bad guy here and it cannot be the government or the whole shebang falls apart. So the evil bankers will dutifully play their role and the real evil genius (the government) will continue to accumulate money and, more important, power as a result of this sequence of events.

Fri, 09/02/2011 - 06:28 | 1625450 MarketTruth
MarketTruth's picture

It must be a distraction as so far i have seen virtually NOT A SINGLE BANKSTER IN HANDCUFFS. Talk and filing lawsuits is relatively cheap, like Obama jabber-jawing to infinity, yet ACTUAL PROSECUTION WITH BIG FINES AND HANDCUFFS HAS BEEN A NO-SHOW.

Thu, 09/01/2011 - 22:34 | 1624766 mayhem_korner
mayhem_korner's picture

Doubtful.  I am more inclined to think this is misdirection for other "goings on."

Thu, 09/01/2011 - 22:38 | 1624786 Cistercian
Cistercian's picture

 Like the latest upcoming nuclear false flag?

  Or to forestall the increasingly inevitable revolution, complete with executions?

Thu, 09/01/2011 - 23:00 | 1624899 Gotterdammerung
Gotterdammerung's picture

Actually,…… they are just trying to help the country understand that Obama speaking about the jobs,… the jobs we don't have, will never have again,.on the openeing night of the NFL wont be the worst thing to happen to the country next week!

"If you haven't prepared for the upcoming crisis,... now might be a good time to exit your home, run down the street pulling the hair from your head, and screaming,…  but,…but he promised it was going to be different this time,... he prrroommmmissssseeedddddd!

Fri, 09/02/2011 - 00:27 | 1625167 gmj
gmj's picture

We will get those jobs back when the cost of a unit of productivity in the US reaches parity with the global market.  Sadly, this means the end of the US middle class hyperconsumptive lifestyle.

Fri, 09/02/2011 - 00:49 | 1625205 sun tzu
sun tzu's picture

Also the end of running water, electricity and other things most of the world lives without

Fri, 09/02/2011 - 00:58 | 1625221 Whalley World
Whalley World's picture

Sadly?

Thu, 09/01/2011 - 22:38 | 1624789 john39
john39's picture

something to blame the crash on...   or, something to finally trigger the crash.

Thu, 09/01/2011 - 22:48 | 1624839 DeadFred
DeadFred's picture

Bernanke does need cover for more QE, but to hurt the banks so you can help the banks???

Thu, 09/01/2011 - 22:56 | 1624879 Bananamerican
Bananamerican's picture

kinda makes you think ....

Thu, 09/01/2011 - 23:06 | 1624938 MachoMan
MachoMan's picture

Didn't the fed drain liquidity just prior to the 08' plunge?

Thu, 09/01/2011 - 23:09 | 1624958 Bananamerican
Bananamerican's picture

affirmative.

....and how many times must these sacred cycles, of bailout and censure, play out?

According to Hindu cosmology, the sacred bailout cycle is one full day (day and night) for Brahma. The lifetime of a Brahma himself may be 311 trillion and 40 Billion years. The cycles are said to repeat like the seasons, waxing and waning within a greater time-cycle of the creation and destruction of the universe. 

So are the holy receptacles of the amerikan people's money like unto the lotus of Vishnu, he of 1000 names....

 

Thu, 09/01/2011 - 23:12 | 1624970 I did it by Occident
I did it by Occident's picture

"In order to save the village, we need to destroy it"

Where have I heard that before...hmm?

Thu, 09/01/2011 - 23:37 | 1625053 Freddie
Freddie's picture

Loot the banks...again.  Fannie and Freddie plus hussein's gang and the bernake are the evil ones.  The banks are just being looted by them for their allies and cronies.

Thu, 09/01/2011 - 22:48 | 1624836 whthewrld
whthewrld's picture

The Fed is just paying them self back - Enter QE3 Stage Right
http://brucekrasting.blogspot.com/2011/08/feds-plan-rumors-of-news.html

 

Thu, 09/01/2011 - 22:44 | 1624816 Slartebartfast
Slartebartfast's picture

Willing to bet Barry and CONgress are sitting on their hands and watching this from the sidelines just like an episode of The Muppets.  

It's either a standard "roundup the usual suspects", farce; or the rumors of an ongoing war amongst the Oligarchs may be boiling to the surface of reality.  Can only wait and see how things shake out.  It was certainly timed to kick off this fall, just like a number of bloggers have been predicting all summer.

Thu, 09/01/2011 - 23:50 | 1625087 Kali
Kali's picture

Glad I bought more phyzz today......shoulda bought more maybe.

Thu, 09/01/2011 - 23:12 | 1624969 RmcAZ
RmcAZ's picture

This can only mean one thing... TARP 2, QE3^9, ARRA 2, etc. This is pretty standard... make it look like the government is going to do something right, and then turn around and bail everyone out.

Either way, going long FAZ.

Thu, 09/01/2011 - 23:15 | 1624983 Cdad
Cdad's picture

I can feel it.  I can feel it.  Stop Dave.  Dave stop.

Fri, 09/02/2011 - 01:24 | 1625258 tickhound
tickhound's picture

Dave's not here, man.

Thu, 09/01/2011 - 23:47 | 1625080 LongBalls
LongBalls's picture

Come on guys....wipe the shit off your goggles. This is a psy-op. Obama is floundering in the polls because he is focused on job creation like a lazer (sarcasm intended). He looks like a hero to the sheeple (but offers no substance to the systemic probs) and the damn banks get more free cash due to liquidity stress. They are loosing the info war. This attempts to tackle both issues.

Study French Revolution history you scum sucking traitors. We are coming for you.

Fri, 09/02/2011 - 05:37 | 1625419 scatterbrains
scatterbrains's picture

and do they drop all charges/fines after the election victory kinda thing ?

Thu, 09/01/2011 - 23:54 | 1625102 Popo
Popo's picture

I detect a hand-slap coming...

 

There will be no major penalties for the annointed ones.

Fri, 09/02/2011 - 01:16 | 1625252 agrotera
agrotera's picture

i saw obummy wearing his special bat man costume,  i thiink he wants to be thought of as gotham city's herio, i think i would have  been better as skoobiedo

Fri, 09/02/2011 - 01:39 | 1625276 zebra
zebra's picture

it is impossible... government is acting normally?

 

Fri, 09/02/2011 - 01:39 | 1625277 zebra
zebra's picture

it is impossible... government is acting normally?

 

Fri, 09/02/2011 - 01:50 | 1625284 Michael
Michael's picture

Barry and the Shit Bags need to raise money to pay for big bloated government anywhere they can get it at this point.

Chapter 7 banks don't need to be bailed out, they need to be liquidated.

Fri, 09/02/2011 - 09:38 | 1626101 chunga
chunga's picture

More political grandstanding? Yeah...probably. Who cares. If it motivates more individuals to delve into the grime in their own personal RMBS home (and act/sue accordingly) that's great. Death by millions of cuts.

These fucking lousy bankers are squatting in their ivory towers. Kick their asses out.

Thu, 09/01/2011 - 22:33 | 1624757 max2205
max2205's picture

Sure makes cents. Sue them then TARP it back. Rinse repeat

Thu, 09/01/2011 - 23:04 | 1624927 TheFourthStooge-ing
TheFourthStooge-ing's picture

I'd much prefer pushing them off a cliff, dragging their carcasses back to the top, and then pushing them off again. No rinse, but repeat as necessary.

 

Thu, 09/01/2011 - 23:50 | 1625086 Larry Darrell
Larry Darrell's picture

Yea.

The reality is, fuck the money.  I'd just like the criminals to be properly executed.

Thu, 09/01/2011 - 22:33 | 1624760 j0nx
j0nx's picture

Oh and btw Tim Rood: FUCK YOU, you cocksucker.

Thu, 09/01/2011 - 22:33 | 1624764 GottaBKiddn
GottaBKiddn's picture

 

Long, rope and pitchforks.

Thu, 09/01/2011 - 22:49 | 1624840 Stoploss
Stoploss's picture

Boiled rope. If you don't boil the rope first, you risk a rats nest snag from the fibers, and also sparks (possibly fire) from the friction. Boiling the rope heat shrinks the fibers back into the twist, and brings the wax deposits to the surface, creating a very smooth and lubricated rope surface. Boiled rope is also very stiff after treatment. Same as a lasso.

Also long boiled rope, pitchforks, and other implements.

Thu, 09/01/2011 - 22:59 | 1624895 Id fight Gandhi
Id fight Gandhi's picture

You've put a scary amount of thought into this haven't you.

Thu, 09/01/2011 - 23:07 | 1624946 TheFourthStooge-ing
TheFourthStooge-ing's picture

You've put a scary amount of thought into this haven't you.

"Chance favors the prepared mind." - Louis Pasteur

 

Fri, 09/02/2011 - 00:43 | 1625195 CrockettAlmanac.com
CrockettAlmanac.com's picture

"Moo." -- Elsie

Fri, 09/02/2011 - 00:01 | 1625121 iDealMeat
iDealMeat's picture

meh..  probably a proficient mariner. Rope burns are a f'n bitch.. Scuffs up your boat too..

Fri, 09/02/2011 - 00:33 | 1625175 NZ Watcher
NZ Watcher's picture

Damm

Now I understand why I stuffed it up every time

Fri, 09/02/2011 - 01:08 | 1625241 Hapte
Hapte's picture

More like an appropriate amount of thought...

Thu, 09/01/2011 - 22:35 | 1624770 101 years and c...
101 years and counting's picture

Remember this line to Rick Perry: "i'm from Bank of America.  We'll help you".  I'm guessing o saw it and wasn't very happy.  he's hitting back.

Thu, 09/01/2011 - 22:44 | 1624813 john39
john39's picture

obummer is not even a glorified puppet. and both parties are totally owned. no way any of this happens without the banker cabal issuing the order.  so lets see what they really are up to.

Thu, 09/01/2011 - 22:54 | 1624865 PaperBugsBurn
PaperBugsBurn's picture

i think we are about to find out what Jennings meant by about being nailed on a cross of gold and it is the banksters (some of them, including the most powerful ones from outside the US) managing the transition.

Thu, 09/01/2011 - 23:52 | 1625095 anonnn
anonnn's picture

Wm J Bryan:

 ""Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold."

Thu, 09/01/2011 - 23:21 | 1624998 I did it by Occident
I did it by Occident's picture

Maybe a Leveraged Buyout via private equity "partners", but need to decimate the stock prices first.  and if taken private they won't have to answer to the SEC anymore.  Then the fun can really begin...

Thu, 09/01/2011 - 23:31 | 1625029 gmj
gmj's picture

This is incomprehensible.  In my world view, the federal government is a rubber stamp for the Wall Street banks.  Look at the personnel revolving door between them.  I have no idea what to think of this.  Maybe the feds will take a few CEO scalps and somehow leave the banks relatively unscathed.  But then why did they let Tangelo Mozilo off with a slap on the wrist?  I'm amazed they are doing anything, since the sheeple have no awareness of the MBS issues.  Maybe this is a way of imposing haircuts on the TBTFs, and helping to fund mortgage relief.  I wonder if the political interpretation is correct.  This could stir the GOP up like a hornet's nest.  They would be forced to reveal their true masters just before the election.  The problem is that the Democrats serve the same masters.  Maybe the Dems and the GOP got together and decided to do a purge and accept the heat before the next TBTF hits the fan.  The problem with that is that DC is completely polarized to the point of national paralysis.  Aargh.

Thu, 09/01/2011 - 23:57 | 1625108 Popo
Popo's picture

All they really need to do is use this to reinstate Glass Steagall.

 

...And wipe out the shareholders of the banks.

 

...And clawback bonuses earned by banking executives, which were based upon fraudulently generated profits.

 

 

Fri, 09/02/2011 - 10:13 | 1626287 TheFourthStooge-ing
TheFourthStooge-ing's picture

All they really need to do is use this to reinstate Glass Steagall.

...And wipe out the shareholders of the banks.

...And clawback bonuses earned by banking executives, which were based upon fraudulently generated profits.

...and torch the fucking Hamptons.

 

Fri, 09/02/2011 - 00:02 | 1625124 Missiondweller
Missiondweller's picture

Maybe this is a way of imposing haircuts on the TBTFs, and helping to fund mortgage relief.

 

Exactly. This is likely the first opening in a negotiation to force the banks to give mortgage relief to people. This is all part of Obama's new Robin Hood campaign to get re-elected.

Fri, 09/02/2011 - 00:40 | 1625190 Delmar
Delmar's picture

Goldman Sachs agreed to reduce mortgage principal for some New York state homeowners in a settlement that could set a national precedent.

 

http://marketplace.publicradio.org/display/web/2011/09/01/pm-goldman-sac...

 

Principal Reduction FTW?

Thu, 09/01/2011 - 23:41 | 1625061 Calmyourself
Calmyourself's picture

This is excellent it had not occurred to me, golf clap!!

Thu, 09/01/2011 - 22:35 | 1624774 WallStreetClass...
WallStreetClassAction.com's picture

yes it makes sense...

"The total litigation amount will not be in the trillions... "

just another opportunistic discount

Thu, 09/01/2011 - 22:35 | 1624775 IMA5U
IMA5U's picture

It is ironic that the US is just creating another crisis that could cause the US billions if we have a crisis

The government is effectivlely giving its self The Stranger http://www.urbandictionary.com/define.php?term=the%20stranger

 

Or even worse, the Reverse Stranger  http://www.urbandictionary.com/define.php?term=reverse+stranger

Thu, 09/01/2011 - 22:48 | 1624837 Slartebartfast
Slartebartfast's picture

LOL!

Thu, 09/01/2011 - 22:56 | 1624883 WallStreetClass...
WallStreetClassAction.com's picture

it is funny!

Thu, 09/01/2011 - 23:04 | 1624930 pods
pods's picture

What the hell, maybe this weekend I might try the double-reverse stranger?

pods

Thu, 09/01/2011 - 22:36 | 1624777 Blagio
Blagio's picture

The song "Got You By The Balls" comes to mind.

Thu, 09/01/2011 - 22:37 | 1624783 ISEEIT
ISEEIT's picture

I'll tell you what it's about. A ruthless Leftist administration was given a once in a generation shot at power and they will do anything to retain it. Anything includes turning on the fools who got in bed with them during the accent to power. The game plan is to drum up an us VS them fever.

Called populism. What it really is is totalitarianism, but they won't fully reveal that until after the election.

Thu, 09/01/2011 - 22:52 | 1624824 WallStreetClass...
WallStreetClassAction.com's picture

yes, enforcing laws is "totalitarianism"

this whole mortgage-backed ordeal is like the S&L crisis on speed. i am glad the feds are going after the pig men. i know i will be dissapointed at the end, as it's probably just an excuse for yet another backdoor bailout.

but you need to lay off this left/right coolaid. it was "all rad" back in the late 1860's

try to stay current

Thu, 09/01/2011 - 22:57 | 1624887 ISEEIT
ISEEIT's picture

This crap has been in the open for how long now? This dog and pony show administration jumps the shark in a desperate bid to bolster the odds of retaining power ONLY for the hope of retaining power and they will kill friends to achieve that goal.

= totalitarianism.

So they were only guilty until suddenly they aren't?

Are you playin'?

This desperate mafioso gang gives amateur a bad name.

Thu, 09/01/2011 - 23:08 | 1624957 WallStreetClass...
WallStreetClassAction.com's picture

dog and pony just like any other dog and pony, available. "administrations" is what i call my dirty underwear. i don't think you are catchin up.

Fri, 09/02/2011 - 00:54 | 1625213 CrockettAlmanac.com
CrockettAlmanac.com's picture

This dog and pony show administration jumps the shark

 

You're mixing animal metaphors like Dr. Moreau.

Thu, 09/01/2011 - 22:47 | 1624831 GoinFawr
GoinFawr's picture

'Leftist'? Yawn. Well, so much for you making any sense. 

'Populism', push a bit harder when it peaks and you might break something. Some 'isms' are like that,  they don't always stay in hand.

 

Thu, 09/01/2011 - 22:38 | 1624785 GoinFawr
Thu, 09/01/2011 - 22:40 | 1624795 Awakened Sheeple
Awakened Sheeple's picture

Annnnnd.. the Lawyers score bigtime

Thu, 09/01/2011 - 22:40 | 1624796 A Lunatic
A Lunatic's picture

Settlement extraction 101.

Thu, 09/01/2011 - 22:46 | 1624827 WallStreetClass...
WallStreetClassAction.com's picture

or "sentiment extraction"?

Thu, 09/01/2011 - 22:50 | 1624847 GoinFawr
GoinFawr's picture

sentiment distraction?

Fri, 09/02/2011 - 00:56 | 1625215 CrockettAlmanac.com
Thu, 09/01/2011 - 22:50 | 1624848 legal eagle
legal eagle's picture

A girl's gotta do what a girls gotta do

Thu, 09/01/2011 - 23:00 | 1624908 mayhem_korner
mayhem_korner's picture

I thought lawyers defended girls who say that...

Thu, 09/01/2011 - 22:42 | 1624801 Mr.Kowalski
Mr.Kowalski's picture

TARP II will never happen. This wont cause a crisis, either-- not big enough. This is a campaign move by Big O. 

Thu, 09/01/2011 - 22:42 | 1624802 Tunga
Tunga's picture

Airbursts make such big impressions.

MIRV = Multiple Independently targeted Reentry Vehicle. 

The tide is turning.  

Thu, 09/01/2011 - 22:42 | 1624804 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Bunch of lawyers are getting rich. Averge Joe gets the shaft. What's new?

Thu, 09/01/2011 - 22:45 | 1624823 j0nx
j0nx's picture

I don't give a shit if I never see a dime as long as the squid, the morgue and Bank of Scamerica take it DEEP in the pooper.

Thu, 09/01/2011 - 22:43 | 1624809 Cursive
Cursive's picture

Would .gov actually do it?  Maybe Obama is just that desparate?  Maybe it's time to save the REALLY powerful people by giving up the banks as human shields?

Thu, 09/01/2011 - 22:49 | 1624846 navy62802
navy62802's picture

If that's the case ... look out below! If the financial sector goes, so does everything else.

Thu, 09/01/2011 - 23:06 | 1624939 snowball777
snowball777's picture

Maybe they're going anyway and this gives provides some cover.

Thu, 09/01/2011 - 23:56 | 1625105 Larry Darrell
Larry Darrell's picture

Maybe, just maybe..............

they've now gathered all the gold necessary, and it's time to crash the USD & Euro to institute the next currency.

Fri, 09/02/2011 - 01:05 | 1625234 Waffen
Waffen's picture

maybe the only thing that makes sense for the conspiratorial minded of us.

 

The banks are about to fail.

By filling a lawsuit, it gives cover for them to fail.

The American people would then see it as a natuarl progression where government did the right thing and the evil banksters lost.

Next up would be to sacrifice the Fed and the dollar and bring in the Gold Standard as the answer.

Thu, 09/01/2011 - 22:44 | 1624810 static
static's picture

numbered, weighed, divided.....the hand writing on the wall

Thu, 09/01/2011 - 22:44 | 1624811 flaunt
flaunt's picture

haha now that the economy is on the brink they want to go ahead and push it over the cliff?  This has to be some sort of sick joke.  Either that or a crisis is necesssary for some reason.  Sheesh this is more entertaining than any movie could ever hope to be.

Thu, 09/01/2011 - 22:50 | 1624850 WallStreetClass...
WallStreetClassAction.com's picture

I know, riiiiight?

but i think it's give and take

bankers get a big discount on their actual liability in all of this (think GLOBAL damage), while government officials get to leverage themselves into the subsequent private industry positions...

actually, quite a pragmatic "solution"

Thu, 09/01/2011 - 23:03 | 1624922 Tijuana Donkey Show
Tijuana Donkey Show's picture

Please cue Iran stage right... I bet the Wikileaks dump has Iranian data all over it, and people are lead into another war. To put a bow on it, how about a Voniguit Player Piano angle on it, and we'll have compuslary military service for anyone without a job. We'll just plunder our way to GDP growth, the romans did it, why can't we? 

Thu, 09/01/2011 - 23:44 | 1625072 gmj
gmj's picture

Vonnegut.  Lots of rumblings on the interwebs about Iran war.  I have a theory that another war would push the opiated mob over the brink.  Stay tuned, folks.  If the sheeple get pissed, the status quo could be overturned quickly.  Nothing more scary than angry sheeple.  It's hard to defend against them, because you can't predict what they will do.  Didn't some great general make a comment something like that about fighting a poorly led enemy?

Thu, 09/01/2011 - 22:44 | 1624814 DCFusor
DCFusor's picture

Damn, for no obvious reason I went tons long FAZ at the close, not something I'd normally do.  I was thinking jobs would suck....You can ridicule me tomorrow if this turns out to be fake (or Tuesday) but I really actually did it on a complete hunch.  Not quite a back up the truck, but more than a shovelful.

 

 

Thu, 09/01/2011 - 22:49 | 1624842 monopoly
monopoly's picture

I did a shovel full the last few days. No big deal, but a nice hedge.

Thu, 09/01/2011 - 23:16 | 1624981 HyperLazy
HyperLazy's picture

I did a barrel roll into cash on tuesday when I jumped off a week long TNA bus ride. If I held til wednesday it would have been better tho. But yeah, first thing thursday morning I jumped on the FAZ and TZA train. I thought about DRV, treated me decent recently but real estate won't tank until the banks are dead and properties are no longer marked to magic. Dunno how the market is going to react, except how the Masters of Market Illusion want it to. I reckon we just gotta think like corrupt bankers and interpolate their diabolical Mammon inspired schemes...

Thu, 09/01/2011 - 22:44 | 1624815 Dr. Engali
Dr. Engali's picture

Okay so let me get this straight. We bailed them out with trillions now we are going to sue them for billions. We will probably send one over the edge ,then bail the rest out with trillions again due to contagioun.

That's our ever efficient government.

Thu, 09/01/2011 - 22:45 | 1624819 lizzy36
lizzy36's picture

This is politics pure and simple.

From the beginning Geithner has refused to hold anyone accountable. Always arguing that it was better for "recovery" to look forward not backward. Of course given that he was head of FRBNY at time of greatest financial disaster, he was a tad conflicted.

However, as the public has been loudly (growing louder everday) demanding a "perp walk". And since we are but 14 months ahead of election, I suspect this is a way for Obama to say he is "doing something". That he IS holding the banks accountable for their bad behavior. "Obama is tough on the banks"!

I also expect that after the election the whole thing will be settled for a small fine, slap on the wrist and no wrong doing admitted.

Thu, 09/01/2011 - 22:59 | 1624894 PaperBugsBurn
PaperBugsBurn's picture

omg....

 

please, please shut up

 

you have no shrewd insights to share

 

please be quiet!!!!

 

I want you to remember it was me who first told you that there is a sea-change going on and maybe even by the end of the year the US will have its gold standard. Maybe an unofficial one through the real market and the Yuan at the Pan Asian Gold Exchange.

 

I want you to remember it was me who told you this first. Me, the guy who believes you are an idiot.

Thu, 09/01/2011 - 23:12 | 1624971 Terminus C
Terminus C's picture

Wow dude, you really think you are some kind of hero. Half the shit you post doesn't seem all that innovative but you don't see anyone post that you are a complete moron. In a free expression arena try this tactic... If you don't like what a person posts then either respond with a counter argument or move on. You malicious attacks on Lizzy are unnecessary and obnoxious.

Fri, 09/02/2011 - 00:02 | 1625123 DeadFred
DeadFred's picture

Do you think he's in love but doesn't know how to express it?

Thu, 09/01/2011 - 23:17 | 1624975 lizzy36
lizzy36's picture

My father taught me never to fight with a moron, they'll just drag you down to their level and beat you with experience.

xoxoxoxox,

Lizzy.

Thu, 09/01/2011 - 23:38 | 1625055 Cliff Claven Cheers
Cliff Claven Cheers's picture

Lizzy, looks like you just owned paper bugs ass.

Fri, 09/02/2011 - 01:02 | 1625230 RockyRacoon
RockyRacoon's picture

Give 'em hell, Lizzy.

Thu, 09/01/2011 - 23:59 | 1625110 DeadFred
DeadFred's picture

Come on, don't be shy. Tell us what you really think. LOL

Edit: my reply was teleported to another location. Is this patentable?

Thu, 09/01/2011 - 22:59 | 1624897 Caviar Emptor
Caviar Emptor's picture

That' only a small part of it. The jig is literally up. For the banks, for the Fed, for Wall Street and for the Government. Anything short of drastic action now could provoke not just another global deep recession, but a total loss of credibility in US Treasury paper, US stocks and even the dollar. In other words Armageddon. To avert this they are chosing to stealth nationalize the banks and cleanse Wall Street. I'm sure China and the Euro nations are on board. 

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