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Is The MBIA vs BAC Saga Ending In Under 24 Hours?

Tyler Durden's picture




 

Anyone who has followed the MBIA vs Bank of America saga knows that the only reason why there has been no settlement so far is due to BAC's relentless stonewalling tactics that seek merely to delay the production of discovery which based on preliminary indications is sufficiently damning to let MBIA prevail in the case, and with that to force settlement that based on our and others' former evaluations, could lead to a doubling in the stock (ignoring the massive short-covering squeeze it would immediately create courtesy of the 15.5% Short Interest of the total float, sending the stock even higher than where fundamentals say it should go). Well, based on a just released transcript of Judge Eileen Bransten motion to compel discovery, the end may be in sight, and may come as soon as July 13, or tomorrow. And what is more important, her displeasure with BofA's relentless stonewalling has come to an end. Will Bank of America have no choice but to settle in the very immediate future? Stay tuned to find out.

Key transcript selections:

THE COURT: I am going to get this case to trial if that’s the last thing I do in my tenure, which, you know, one day will end, and I want to it end before – I want MBIA to be basically done before my tenure ends, and that means we have to get going on it...it’s beginning to be push time.

I am getting a little annoyed at the constant delay in this case.

And the Court is going to say this about it: Came very close to sanctions.  You practically reached the precipice over which you take one more step and sanctions is going to be happening. 

I don’t think Bank of America ran new search terms out of the goodness of their heart.  I think that really what happened was that they knew that discovery was not completeThey also know that the Court is getting very thin-edged about it not being complete

don’t care how many documents have been produced.  It appears to me that there are documents that Countrywide has decided in its own inimicable way not to produce: Oh, that meeting had to do with something else.  The issues is not that.  The order that I gave before, and the order that I’m repeating now, is that everything, everything concerning these meetings is to be produced.  It is not up to Countrywide to make that decision.

THE COURT:  But my problem, Ms. Concannon, remains the same.  It should not have been a production last night.  It should not be last night.  It should have been two or three or four months ago.  And it bothers me that, indeed production was made last night.  It is to me a deliberate path of – it really is – in my book it’s beginning to be a deliberate path of stonewalling until the very last minute, and then  we’ll produce everything the night before, so we can say to the Court oh okay we produced.  Not good enough.  I’m making the date of July 13 the date, all right, for everything. I don’t care if there’s something left over and it should have been produced, and it was not produced.  When I come back on July 23, I’m going to be ready-ready, and I’m going to be very well rested, and I’m going to very, very annoyed and angry that anybody stonewalled until the last minute.  I want it produced tomorrow, so that it can be reviewed before July 13 so that, indeed, discovery is done.  This is it, folks.  The court is returning and becoming rather ticked.  Excuse me.  That’s not a nice word.  Rather annoyed. 

THE COURT: No, no, no, no, no, no.  Too late.  Too late.  Look, the reason why its’ too late is that this is not like it’s first come to light:  Gee, we need a privilege log.  No, sir, no.  No, it’s been too long.  Not by the middle of the month.  In the first place, whatever you have as of today, turn it over.  Whatever you need to supplement, supplement it by next week.  But that’s it.  Turn over your privilege log today. 

THE COURT: Okay, look.  Deadlines: The final production for the privilege log will be July 13 of this year

THE COURT: Well, I think it’s a valid request, and I think in order for you to respond to it, you have to choose one of two things: Search more, find out if there are any such documents, and then turn them over, or do a Jackson affidavit stating you’ve conducted a thorough search, you’ve looked under your grandmother’s couch, you’ve done everything that you could possibly do in order to get the information requested.  That’s a Jackson affidavit.  Why is a Jackson affidavit important?  Because later on, miraculously, when finally one day this gets to trial and a solvency document arrives either for the jury or the judge to consider, then MBIA will jump and say, oh, we had a Jackson affidavit.  We did this question.  We asked for the information, and we were told it didn’t exist. 

It’s not like I’m asking you to commit hara-kiri.   I’m just asking you for a Jackson affidavit. 

* * *

Source: transcript of Judge Bransten Motion to Compel below:

 

h/t Manal Mehta

 

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Thu, 07/12/2012 - 10:32 | 2609811 ITrustMyGut
ITrustMyGut's picture

the roof.. the roof.. the roof is on FIRE!

Thu, 07/12/2012 - 10:41 | 2609836 Pladizow
Pladizow's picture

Putback Bitchez!

Thu, 07/12/2012 - 10:44 | 2609849 Fish Gone Bad
Fish Gone Bad's picture

Bank of America is such a cancer.

Thu, 07/12/2012 - 10:50 | 2609876 eclectic syncretist
eclectic syncretist's picture

At least one of the Tyler's writing for this blog needs to get his/her head out of his/her ass.  BAC going to double by tomorrow???!!!!!!  LMFAO!

Thu, 07/12/2012 - 10:57 | 2609905 nobusiness
nobusiness's picture

I think he said MBIA will double?

Thu, 07/12/2012 - 11:02 | 2609921 idea_hamster
idea_hamster's picture

"It’s not like I’m asking you to commit hara-kiri."

Au contraire -- that's exactly what the judge is asking.

Thu, 07/12/2012 - 12:21 | 2610161 fx
fx's picture

Funny, that at the same time NY seems to try to push MBI towards a settlement with the banks on the separation issue - using the approval of interest payment on the surplus notes as a tool to apply pressure. Seems some people called their friends in high places to do something before Judge Branstein may cut BofA's defense to pieces.

as per the flyonthewall:

MBIA climbs after firm says BofA settlement moving closerBond insurer MBIA (MBI) is advancing after research firm MKM Partners said that New York State may be pushing the company to settle its litigation with two banks. Specifically, New York's Department of Financial Services, or NYSDFS, may be delaying giving permission to MBIA to make a scheduled payment to some of its bondholders as a means of pressuring the company to settle its litigation with the banks, Bank of America (BAC) and Societe Generale (SCGLY), MKM Partners asserted. As a result, MKM thinks the conclusion of the litigation may be drawing closer. According to MKM, NYSDFS believes that a municipal only financial guaranty company, brought about by a settlement of the litigation, would be in the state's best interest. The research firm believes that MBIA and the banks will have an easier time reaching a settlement following prodding by the NYSDFS. MKM maintains a Buy rating on shares of MBIA. In late morning trading, MBIA rose 19c, or 1.93%, to $10.03.

Thu, 07/12/2012 - 10:57 | 2609906 Tyler Durden
Tyler Durden's picture

Are you really that stupid?

Thu, 07/12/2012 - 11:01 | 2609920 NotApplicable
NotApplicable's picture

Well, to be fair, it is a long sentence. ;-)

Thu, 07/12/2012 - 11:02 | 2609925 AlaricBalth
AlaricBalth's picture

"Genius may have its limitations, but stupidity is not thus handicapped."

Thu, 07/12/2012 - 11:04 | 2609931 eclectic syncretist
eclectic syncretist's picture

I was!  I didn't realize MBIA was publicly traded.  You obviously meant that MBIA could double on the outcome.  My bad.  I'll just get my head out of my ass now if you'll pardon me for a moment.

Thu, 07/12/2012 - 11:15 | 2609947 AlaricBalth
AlaricBalth's picture

MBI August12 $10 call @ $1 last trade.  Worth a shot!!!

(Talking my book) :-0

Thu, 07/12/2012 - 11:25 | 2609994 rockraider3
rockraider3's picture

Who cares about MBIA calls, buy Syncora.  (now I'm talking my book)

Thu, 07/12/2012 - 12:35 | 2610206 AlaricBalth
AlaricBalth's picture

Penny stock, illiquid, operating companies adversely affected as an ongoing concern due to Jefferson County, Alabama bankruptcy. Plaintiff in plenty of lawsuits, JPM being one.  Home run or nothing, just like an option near expiration.

Thu, 07/12/2012 - 13:10 | 2610346 Jupiter
Jupiter's picture

I'm sorry, but I have to make a comment about this unneccessary comment obviously by a non-professional reader.

The mistake wasn't even the misreading of the article, that is a verbal oversight that deservedly may yield some criticism.

 

The real naivety was not in realizing that MBI is a public corporation.   Where have you been for the past five yeras?  

 

If you are indeed a "beginner", or a novice investor, why would you feel the need to post so frequently as you do (which really does a disservice to other readers)?

Thu, 07/12/2012 - 11:13 | 2609964 Muppet of the U...
Muppet of the Universe's picture

YES! WOW, where did you get the transcript log!!?!?  Is it made available to the public?  & if so, can you tell me where to find an archive of such transcripts???

Thu, 07/12/2012 - 10:42 | 2609844 ghengis86
ghengis86's picture

we don't need no water, let the muther fucker burn!

Thu, 07/12/2012 - 10:34 | 2609819 the not so migh...
the not so mighty maximiza's picture

Friday the 13th tommorow???  Satanic fucks will love that date for false flags.

Thu, 07/12/2012 - 10:41 | 2609839 ghengis86
ghengis86's picture

Friday the 13th: Bad things happen (hopefully for those satanic fuck bankers)

Thu, 07/12/2012 - 10:37 | 2609824 Temporalist
Temporalist's picture

I think someone needs an exorcism.  "The power of Christ compels you!"

http://www.youtube.com/watch?v=vX3wNfw3iYY

 

Oh and thanks to GATA.org:

Gold market manipulation issue seeping into polite company

http://www.gata.org/node/11570

Thu, 07/12/2012 - 10:45 | 2609854 midgetrannyporn
midgetrannyporn's picture

the response from lawyers for the bank:

http://www.youtube.com/watch?v=EMnSpd0XRmo

Thu, 07/12/2012 - 11:31 | 2610016 Bay of Pigs
Bay of Pigs's picture

Do you ever have a point or are you just another retard on gold?

Thu, 07/12/2012 - 11:35 | 2610030 midgetrannyporn
midgetrannyporn's picture

Hello BoP. ;)

Thu, 07/12/2012 - 11:53 | 2610070 Bay of Pigs
Bay of Pigs's picture

Seriously, I've followed GATA since day one in 1999. Everything they have said has been, and is being, proven correct.

Why do you take shots at people who are trying to help others understand this fraud and corruption?

Thu, 07/12/2012 - 13:05 | 2610325 midgetrannyporn
midgetrannyporn's picture

I dislike fraud and corruption as much as anyone. Lighten up a bit BoP, have some fun once in awhile.

ps i think your beard is groovy. ;*

Thu, 07/12/2012 - 10:41 | 2609835 midgetrannyporn
midgetrannyporn's picture

tough talk from a weak bench.

Thu, 07/12/2012 - 10:45 | 2609855 Lost Wages
Lost Wages's picture

Yep, a lot of stamping her feet and fuming, but at the same time illustrating her own role as a pushover. Must suck to have to try to prosecute people who own your ass.

Thu, 07/12/2012 - 10:43 | 2609847 adr
adr's picture

So a settlement causing a zombie bank to cough up hundreds of millions that it doesn't have, will cause the stock to soar?

God I love this farce. WTF.

Thu, 07/12/2012 - 10:51 | 2609881 Lost Wages
Lost Wages's picture

I think he meant MBIA will soar. Not BAC.

Thu, 07/12/2012 - 10:46 | 2609859 ghengis86
ghengis86's picture

Harakiri (seppuku) reference FTMFW!

Thu, 07/12/2012 - 10:46 | 2609860 DeadFred
DeadFred's picture

Lost out on 2% because I took time to read the article rather than just trust Tyler. LOL 

Thu, 07/12/2012 - 11:22 | 2609989 James_Cole
James_Cole's picture

It's the zerohedge pump, we're all buying.

Thu, 07/12/2012 - 10:47 | 2609862 alien-IQ
alien-IQ's picture

Oh yeah...this could be fun. I just grabbed some MBI July 11 calls @.24 and BAC July 7 puts @ .08. It's worth a small gamble.

Thu, 07/12/2012 - 10:51 | 2609878 kaa1016
kaa1016's picture

Took a shot on the MBI calls as well. We'll see what happens. If nothing, no big deal. If a settlement and subsequent short squeeze on MBI's stock, I score. Also, there was an analyst on CNBC talking about the potential for a monster move in the stock as well...

Thu, 07/12/2012 - 10:56 | 2609900 alien-IQ
alien-IQ's picture

it's looking good already. The 11 calls are rocking now at .41. But the spread is fuckin ridiculous.

Thu, 07/12/2012 - 11:17 | 2609977 DeadFred
DeadFred's picture

Hopefully all the movement isn't just ZH momos (that's a wierd oxymoron). Whatever, it's fun to watch the MBI chart, and even if the market is a total fail in it's primary role to provide funding for industry it can still provide entertainment.

Thu, 07/12/2012 - 10:53 | 2609883 Rearranging Dec...
Rearranging Deckchairs's picture

Anyone else feel like for the amount of money involved BofA may just arrange for the judge to have a convenient massive heart attack or some other such "accidental death?"  This kind of thing was previously unthinkable in this heretofore great country. 

 

If anything happens to this judge before July 23rd I 'm calling "Murder!"

 

 

Thu, 07/12/2012 - 10:56 | 2609901 Lost Wages
Lost Wages's picture

You mean like when the police show up for 5 minutes and say there were no signs of foul play, like with the whistleblowers in Las Vegas?

Thu, 07/12/2012 - 11:28 | 2609996 DeadFred
DeadFred's picture

And the ME signs off to have the body cremated within hours 'as per family's wishes'.

The LIBOR scandal is getting a lot of play that could have been avoided. There are new currents moving in the waters and who knows what's going on. My latest theory is that Goldman is making a play. With no LIBOR exposure and little mortgage risk they have pulled strings with their government lackeys to take down their competitors. Sharks, whales and squids all mixing it up, what more could one ask?

Thu, 07/12/2012 - 11:01 | 2609917 alien-IQ
alien-IQ's picture

I don't know about that...but if I were her I'd stay away from small airplanes and hot tubs for a while. Just in case.

Thu, 07/12/2012 - 10:56 | 2609902 chunga
chunga's picture

They do this all the time. Motions to Compel are met with Motions for Protective Order.

Just send Marshals to serve subpoenas Judge Bransten.

What are they hiding? It's shit like this Countrywide ammended Credit Agreement below. The depth of the fraud is mind-boggling.

THE MONEY AND WHERE IT CAME FROM

Thu, 07/12/2012 - 11:17 | 2609976 Thisson
Thisson's picture

This doesn't show much.  Yeah, big banks loaned money to countrywide to fund mortgage origination.  Tell us something we didn't already know?

Thu, 07/12/2012 - 11:28 | 2610005 chunga
chunga's picture

Yes, but they can (and did) switch out the contents of the pools at will.

Make the math simple. Take a pool of MBS worth 1 million dollars with (10) 100k mortgages in it.

Then, switch out the sworn contents later with (50) 20k mortgages. Way more junk fees with 50 mortgages.

That is not legal. That is securities fraud. That is what they are hiding.

Thu, 07/12/2012 - 12:05 | 2610109 Casual_Observer
Casual_Observer's picture

Thank You

Thank You Very Much

And, Thank You Tylers

Thu, 07/12/2012 - 11:00 | 2609911 bankruptcylawyer
bankruptcylawyer's picture

you are plugging mbia now?

common zerohedge....COMMON. lawyers@?@?@?@?@?@?@? 

for fuckign serious , these guys are just trying to bleed bac and mbia for whatever they can. the only thing i would bet on is the OVER on the average lawyer partners profits who are working on these cases on both sides

Thu, 07/12/2012 - 11:02 | 2609924 search
search's picture

Now not all will agree, and so all is as it should be, but zerohedge just did God's work. And self sacrificed being born of the Amercan system to show what is. It holds the solution to its father and knows it and dares it to be better.

Thu, 07/12/2012 - 11:10 | 2609952 benjamin_1114
benjamin_1114's picture

The HFT's must be tracking ZH, the ASK on MBI options just doubled in the last 45 minutes.

Thu, 07/12/2012 - 11:30 | 2610014 ParkAveFlasher
ParkAveFlasher's picture

I love when TD puts ass on line with calls like this...and then...

Thu, 07/12/2012 - 11:31 | 2610015 search
search's picture

ZH is very misunderstood, to be globally relevant it must be somewhat impersonal but to be intellectual it must be social. We must understand the demands we place on this site.

Thu, 07/12/2012 - 11:42 | 2610043 tony bonn
tony bonn's picture

sounds like judge judy but in the hour of decision, she will turn into casper milquetoast...banksters always prevail.....

Thu, 07/12/2012 - 12:23 | 2610171 icanhasbailout
icanhasbailout's picture

They will spoil before they produce incriminating evidence.

Thu, 07/12/2012 - 13:09 | 2610340 Jupiter
Jupiter's picture

 

With each passing year, MBI still remains at the same price.

Thu, 07/12/2012 - 13:29 | 2610415 Centurion9.41
Centurion9.41's picture

"Anyone who has followed the MBIA vs Bank of America saga knows that the only reason why there has been no settlement so far is due to BAC's relentless stonewalling tactics that seek merely to delay the production of discovery which based on preliminary indications is sufficiently damning to let MBIA prevail in the case, and with that to force settlement that based on our and others' former evaluations, could lead to a doubling in the stock (ignoring the massive short-covering squeeze it would immediately create courtesy of the 15.5% Short Interest of the total float, sending the stock even higher than where fundamentals say it should go)."

One sentence... this TD must have some law/paralegal training in their background.

Anyone who has followed the MBIA vs Bank of America saga knows the only reason why there has yet to be a settlement is due to BAC's relentless stonewalling tactics.  The goal of which is to merely delay the production of discovery.  A discovery which, based on preliminary indications, should be sufficiently damning to let MBIA prevail in the case.  A forced settlement, based on our and others' former evaluations, could lead to a doubling in MBIA stock.  Furthermore this anticipated doubling, based on fundamentals, ignores the massive and immediate short-covering squeeze created courtesy of a 15.5% Short Interest in MBIA's total float.  So a squeeze sending her higher than a doubling is _____ [<-- add in your own probability based marketing color].

 

Thu, 07/12/2012 - 19:01 | 2611347 Floordawg
Floordawg's picture

Very, very generous of you to share such valuable trade info with us, Tyler(s). It was far beyond my realm to figure that one out, and I wasn't one of the fortunate people who read the article in time today to take advantage. But I just wanted to extend an enormous amount of gratitude anyway.

Thank you for all that you do in keeping us schmucks informed!

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