Bloomberg Analyst: Is Bank of America Near Tipping Point?

“The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout….”

Bank Of America Stock Has Tanked As Investors Fear It Needs Another Bailout

Today, November 04, 2010, 21 minutes ago | Henry BlodgetGo to full article

Building CollapseIs it deja vu all over again?

Bloomberg’s Jonathan Weil has inspected Bank of America’s balance sheet (BAC), and he’s horrified by what he sees.

Yes, Bank of America’s pulverized stock could be explained by concerns about “put-back risk”– the risk that investors who bought all the crap the company packaged and sold as mortgage-backed-securities will “put” those securities back to the company, demanding tens of billions of dollars back..

But there’s also the fear that Bank of America is lying about the value of the assets on its books. This, the fear goes, will force the bank to (yet again) raise capital or get bailed out to avoid imploding.

Whichever story you prefer, the ghost of former-CEO Ken Lewis still haunts the place.

Jonathan Weil:

It was only last April that Bank of America Corp. was making fools out of the doomsayers who had called for its nationalization a year earlier. Taxpayers had gotten their bailout cash back. Investors who bought its shares at the bottom were making a killing. Government leaders lauded the company’s rescues, both of them, as a great success.

Now the bank may be on the verge of trouble again. Its stock has fallen 41 percent since April 15. Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout….

Judging by its shrinking stock price…. investors are acting as if Bank of America is near a tipping point. Its market capitalization stands at $115.6 billion, or 54 percent of book value. That’s the second-lowest price-to-book ratio among the 24 companies in the KBW Bank Index, and well below the 76 percent ratio the company was at in October 2008 when it landed its first round of TARP dough. Put another way, the market is saying there’s a $96.8 billion hole in Bank of America’s balance sheet…

34 Responses

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  2. tony,

    No one knows if their loan was repurchased. But, in every Mortgage Loan Purchase Agreement (which is also the Repurchase Agreement) – there are numerous reasons that mandate a repurchase. Save to say that every loan had at least one violation. Very often the repurchase was ignored – but many were repurchased. The pending repurchase demand by the Federal Reserve, PImco – and others – supports the contention that if the loans were not repurchased – they should have been repurchased – and, therefore, conditional.

    A note is not negotiable IF the note is executed is CONDITIONAL. Repurchase Agreements (contained in MLPA) make the execution conditional. Thus, the negotiability of the note is in question. Since courts love to foreclose based upon Holder in Due Course of the so-called “negotiable note” – I would think that Repurchase agreements may be a starting point to challenge the negotiability of the note. Would need a law firm well versed in this area to challenge – and, a law firm willing to take the issue as high as they can go – without settlement that would, in effect, block a decision.

  3. Boycott, then foreclose on the big banks!

    No more foreclosures.

  4. CIG HFI 1st Lien Mortgage

    Claimed by BofA to be a creditor on notices of foreclosures and other docs, when in actuality this is a pretend Creditor and department within BofA

  5. An except from the Prospectus in my case:

    After the closing date, if any document is found to be missing
    or defective in any material respect, or if a representation or warranty with
    respect to any mortgage loan is breached and such breach materially and
    adversely affects the interests of the holders of the certificates in such
    mortgage loan, the custodian, on behalf of the trustee, is required to notify
    the seller in writing. If the seller cannot or does not cure such
    omission,defect or breach within 90 days of its receipt of notice from the
    custodian, theseller is required to repurchase the related mortgage loan from
    the trust fund at a price equal to 100% of the stated principal balance thereof
    as of the date of repurchase plus accrued and unpaid interest thereon at the
    mortgage rate to the first day of the month following the month of repurchase.
    In addition, if the obligation to repurchase the related mortgage loan results
    from a breach of the seller’s representations regarding predatory lending, the
    seller will be obligated to pay any resulting costs and damages incurred by the
    trust. Rather than repurchase the mortgage loan as provided above, the seller
    may remove such mortgage loan from the trust fund and substitute in its place
    another mortgage loan of like characteristics; however, such substitution is
    only permitted within two years after the closing date. With respect to any
    repurchase or substitution of a mortgage loan that is not in default or as to
    which a default is not imminent, the trustee must have received a satisfactory
    opinion of counsel that such repurchase or substitution will not cause the trust
    fund to lose the status of its REMIC.

  6. @ Leapfrog!!!

    I’m LMAO now! Yes, the article was from ShameTheBanks. It pretty much said that BofA had insolvency issues.

    Only time will tell.

  7. Although B of A is no saint, the only reason why it is the focus of bad practices is also the same reason it was given the worst deals and trated more unfairly than the other Mega-banks, IT’S ITALIAN OWNED/CONTROLLED & NOT JEWISH OWNED/CONTROLLED. Look it up B of A used to be the Bank of Italy.

  8. Lawmaker Questions Power to Foreclose

    By ROBBIE WHELAN

    A Virginia lawmaker asked the state’s attorney general to launch an investigation of Mortgage Electronic Registration Systems, the middleman firm in millions of court filings that helps keep the mortgage-securitization machine moving.

    Robert G. Marshall, a Republican member of the Virginia House of Delegates, requested that Virginia Attorney General Ken Cuccinelli determine whether the Reston, Va., company violates state law because it doesn’t pay a fee every time a loan changes hands. Opinions differ as to whether MERS must pay local fees every time it sells an interest in a loan.
    More

    “There are too many people getting foreclosed on not properly,” said Mr. Marshall, who represents two counties near Washington, adding that he is drafting a Virginia law that would require lenders to pay county fees before being allowed to proceed with foreclosures. “The disdain with which the conditions of law have been treated by those who want to make money too fast is very troubling to me.”

    Brian J. Gottstein, a spokesman for Mr. Cuccinelli, said the attorney general is required to produce an opinion on the matter but declined to comment “on any particular industry participant right now.”

    R.K. Arnold, MERS’s chief executive, said the company’s activities are legal in all 50 states and have held up under previous scrutiny.

    The challenge is the latest sign lawmakers and lawyers for borrowers are taking aim at MERS as the foreclosure mess drags on. Created 13 years ago by Fannie Mae, Freddie Mac and several large U.S. banks as an electronic registry of land records, the company’s name is listed as the agent for mortgage lenders on documents for 65 million home loans. But that same streamlining has made MERS a target of critics who say the company might not have the legal right that it claims to foreclose on borrowers.

    In a state-court lawsuit filed in Georgia last week seeking class-action status, lawyer David Ates says MERS isn’t a secured creditor, meaning it lacks the power to foreclose on behalf of lenders, mortgage servicers or other parties.

    Mr. Ates said he is seeking to have all Georgia foreclosures by the company “be declared invalid and the title be returned to the debtor.”

    Mr. Arnold said the company’s role in foreclosing on a mortgage is unquestionable because every time a loan is registered with MERS, the borrower must sign a document saying the company assumes all rights and responsibilities on behalf of the creditor or lender.

    “The legal concept is as sound as any concept in America: You made a loan to a homeowner,” Mr. Arnold said in an interview. “They granted you a mortgage, and that’s recorded in the land records, and the company that has the mortgage and can foreclose is MERS.”

    Mr. Arnold added: “We can foreclose in all 50 states, and we will continue to do that.”

    Tom Kelly, a spokesman for J.P. Morgan Chase, said last month that the New York bank hasn’t used the MERS record-keeping system since at least 2008 to foreclose in the bank’s name because “some local courts wouldn’t accept MERS.” J.P. Morgan still uses MERS for mortgages originated by other banks or brokers.

    MERS spokeswoman Karmela Lejarde said the company doesn’t keep track of how many users have stopped using the electronic filing system. MERS declined to say how many lawsuits have been filed against the company since foreclosure troubles erupted in mid-September.

    On its corporate website, MERS says its goal is “to register every mortgage loan in the United States.” During the housing boom, the company helped lenders transfer ownership of home loans quickly and at low cost, making it easier to bundle loans into pools that are then morphed into securities.

    Christopher L. Peterson, a law professor at the University of Utah who has criticized the record-keeping company’s business model in scholarly articles, says the foreclosure furor is a serious challenge to MERS because the documentation problems show the company is doing an end run around hundreds of years of American property law.

    “By having all the mortgage loans recorded in the name of one entity, the records don’t mean anything anymore,” Mr. Peterson said. “We used to have the records that showed the true economic interest of who owns the land in the public system. Now we just have one proxy, and we can’t tell which lender or which trust owns the right to foreclose, because virtually every securitized loan is recorded in the name of MERS.”

    There is no sign county governments across the U.S. are pursuing a wide-scale effort to recover fees from MERS. And while state supreme courts in Arkansas, Kansas and Maine have thrown out individual foreclosure cases on the grounds MERS didn’t have the right to bring the actions on behalf of banks, no nationwide consensus has emerged.

    “MERS is on the mortgage. It’s a condition to the loan. The borrower agreed to that. We’re foreclosing on behalf of the company that holds the promissory note,” said Mr. Arnold, MERS’s CEO. “At the end of the day, it’s going to wind up in the favor of MERS.”

    Also last week, the District of Columbia’s attorney general, Peter Nickles, issued a statement saying no D.C. homeowner can be foreclosed upon unless the security interest of the note holder has been physically recorded with the district’s Recorder of Deeds, a condition that electronic assignments through MERS don’t meet.

    MERS said in a statement that its transfers of interest in a property were valid because MERS’s name is on the original documents when the loan is made and recorded.

    Write to Robbie Whelan at robbie.whelan@wsj.com

  9. The Need For Failure
    Thomas F. Cooley
    If a firm is ”too big to fail,” it is … too big.

    There has been constant chatter about the fact that our regulatory institutions don’t really know how to deal with firms that are deemed “too big to fail” but may be insolvent. Throughout 2008, policymakers improvised a solution for each case that came along–Bear Stearns, Fannie and Freddie, Lehman Brothers, AIG. But improvisation is not a policy, and the weakness of that approach has become increasingly apparent as we drag through 2009.

    First, the very notion of “too big to fail” is dangerous. It suggests that there is an insurance policy that says, no matter how risky your behavior, we will make sure you stay in business. It encourages banks to get bigger (or more interconnected), and it subsidizes risky behavior.

    http://www.forbes.com/2009/05/26/fdic-treasury-banks-too-big-to-fail-opinions-columnists-sheila-bair.html?feed=rss_news

  10. Roubini Says Bank Takeovers Deepened Financial Market Crisis

    Bank takeovers worsened the financial crisis by making firms that were already too big even bigger, said Nouriel Roubini, the New York University professor who predicted the financial crisis.

    “The institutions are insolvent,” Roubini said in a Bloomberg Radio interview. “You have to take them over and you have to split them up into three or four national banks, rather than having a humongous monster that is too big to fail.”

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adEHS6CD6q4Q&refer=home

  11. Says Anna Schwartz, co-author of the leading book on the Great Depression, and someone who actually lived through it:

    So its not a liquidity problem. As Schwartz says, it is an insolvency problem. Or more accurately, a lack of trust that the other guy not going to go belly up because of his derivatives liabilities.

    Note: Schwartz believes that the fed should let insolvent companies which made bad decisions fail, instead of artificially propping them up. She thinks that propping them up will only prolong the crisis.

    The government is not only fighting the last war, and not only failed to help solve the derivatives mess, it has made it worse. The government de-regulated derivatives (and see this) and failed to exercise any oversight in this area. In addition, the government may have allowed normal accounting principles to be totally suspended under the guise of “national security”.

  12. The head of the Federal Deposit Insurance Corporation said Thursday that the government’s strategy in the financial crisis of bailing out huge institutions deemed “too big to fail” must be replaced by a new model.

    FDIC Chairman Sheila Bair told Congress a new system of supervision that prevents institutions from taking on excessive risk and becoming so large their failure would threaten the financial system is needed.

    http://www.cnbc.com/id/29774555

  13. FROM http://WWW.MARKET-TICKER.ORG

    ‘America’s Alarm Clock Has Rung: Time’s Up

    Here’s the deal folks.

    The banksters asset-stripped the public. Twice. The first time in the 1990s with the Internet bubble, the second time in houses. If you bought a home from 2003 onward you got screwed. It doesn’t matter if you were a good borrower or not – you overpaid. American business was also asset-stripped. We covered this by shipping our labor off to China, India and Vietnam.

    During the last part of the 2000 decade, the Federal Reserve, Bank Regulators, Government and the Banks themselves were all in on it. We know this. We know it because Citibank’s former Chief Underwriter has testified to it under oath. It is not speculation or mathematics, it is admitted fact. This was an intentional, malicious act that involved government and finance. Your “representatives” didn’t represent you, they represented the banks. They acted as guards not of your wealth, but instead they held you at gunpoint while the bank robbed you. This is the proximate cause of the market and economic collapse – your productive wealth was literally stolen through these frauds.

    Now they’re at it again. First, Ben Bernanke imposed, without a vote, a tax on the American People of over $1 trillion through his original “QE ” game. This went immediately into commodity and stock prices worldwide but was in fact a tax on you, and on every productive business. This is the reason that unemployment remains at close to 10%. By now we should be well on our way to recovery. The government blew $600 billion on stimulus programs. They got nothing for it because of QE, which took it all back out, plus more through the tax – a tax that went directly into the bankers pockets. This unlawfully-imposed tax was used to cover the banks’ insolvencies, along with the blatant extortion practiced by Rep. Kanjorski on FASB (who, incidentally, lost his seat Tuesday.) But the banks did not clear their balance sheets – they are, in fact, still insolvent. Instead, they literally took the money and paid it in bonuses.

    Now that the banks are once again running out of money Ben Bernanke is at it again. He has announced another $600 billion in illegal taxation on America, and intends to give it again to the bankers. A good part of it already showed up in oil and other commodities. The rest of it will. It is guaranteed. The “benefit” will go overseas. The tax will fall on you.

    THIS IS THE LARGEST TAX EVER IMPOSED ON THE AMERICAN PEOPLE IN THE HISTORY OF THE NATION. IT IS MORE THAN FOURTEEN TIMES THE BUSH TAX CUTS “ON THE RICH” THAT EVERYONE IS DEBATING. GOLDMAN SACHS BELIEVES THAT BERNANKE WILL IMPOSE A TOTAL TAX THROUGH QUANTITATIVE EASING OF MORE THAN FOUR TRILLION DOLLARS OVER THE NEXT TWO YEARS, OR MORE THAN FIFTY SEVEN TIMES THE BUSH TAX CUTS.

    If you, America, do not rise and stop this NOW you’re all going to be effectively dead economically.

    Your assets will be stripped.

    All of them.

    Your homes.

    Your businesses.

    Your savings – as if having the earnings you can receive on a safe CD cut from 5% to 0.5% isn’t bad enough.

    And, when the inevitable margin collapse comes in the corporate sector, your stock portfolio will detonate again and your pension funds, Medicare, Medicaid and Social Security will be gone.

    Either you rise and stop Bernanke and The Fed, or he – and they – win – and we all lose.

    There is no “individual path” that will keep your assets safe from this. There is no means to hide, so long as you’re an American citizen and live in this nation.

    We have two choices: we collectively stop this madness or we all get destroyed.

    Those are the only choices.

    For three years and change I have warned of this outcome. I have pointed out that there is three trillion dollars or more of losses that have to be taken in the economy.

    Those losses should fall on the banksters who committed these acts. Doing so will cause these banks to be taken into receivership. They will have to be resolved.

    Virtually none of those losses attributed to them have been taken by these institutions.

    These losses have all fallen on you, through unemployment, through higher energy prices and higher prices at the grocery store. All of these are taxes that are being illegally imposed on you by a Central Banker who lacks the legal authority to impose a tax.

    Yet he’s doing it, and you’re being told to cheer because the DOW is up 200 points.

    I want to note that in 2007 I wrote a similar Ticker urging people to stop this bastard when he started interfering like this. You did nothing, because the S&P was headed to 1576 and the DOW over 14,000 on the back of his original “rate cuts” and other machinations. I was called all sorts of names, the kindest of which were “kook.” You sat on your hands instead of rising to stop this crap and were repaid by watching your portfolio get cut by 60% in the next two years, two major banks blowing up in an uncontrolled fashion, and threats of tanks in the streets.

    If you do not stop him – remove him from office – NOW – you will be destroyed.

    That is a certainty.

    We no longer have the “margin” to absorb another mistake like the last one. And the crap that Bernanke is pulling now is the mother and father of all mistakes.

    It’s your choice America – but where this road leads is not open to debate. These institutions that robbed you can only survive the consequences of their acts by destroying you, and they are hellbent and determined to do exactly that, with Ben Bernanke as the man who is literally destroying not only your economic present, but the future as well for yourself and your children.

    You no longer have the luxury of time.

  14. April 8 (Bloomberg) — A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

    The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

    “All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJJ_MkIv9VvA&refer=home

  15. NEW YORK (Fortune) — The Obama administration must break up the biggest financial firms if the nation is to return to economic health, three prominent bailout skeptics told a congressional panel Tuesday.

    Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson warned the Joint Economic Committee of Congress that the current government policy of propping up troubled financial giants could impede an economic recovery.

    They each said spending taxpayer dollars freely on behalf of struggling big banks risks drowning U.S. productive capacity in debt — while handing what amounts to an enormously costly subsidy to politically powerful financial sector insiders.

    If the Obama administration fails to hold troubled banks accountable for their problems, the U.S. could face a lost decade of economic growth like Japan’s in the 1990s, they said.

    The third skeptic, Federal Reserve Bank of Kansas City President Thomas Hoenig, said policymakers must allow troubled firms to fail rather than propping them up, a la AIG (AIG, Fortune 500). He said banks must be treated consistently, regardless of their size or connections, for the sake of restoring confidence to markets and normal function to the economy.

    “Rather than letting the market system objectively discipline the firms through failure and stockholder loss,” Hoenig said of the current approach to bailouts, “we tend to micromanage the institutions and punish those within reach.”

    http://money.cnn.com/2009/04/21/news/too.big.fortune/index.htm?postversion=2009042112

  16. NOW THE WALL STREET LOVERS HAVE BEEN ELECTED. THEY CALL WALL STREET CAPITALISM AT ITS BEST.

    REALLY?

    JUST LIKE YOU WERE ELECTED WE CAN KICK YOU OUT.

    PROSECUTE THE CRIMES AGAINST THE AMERICAN FAMILIES. STOP THE FORECLOSURES AND ENFORCE THE LAW.

    OTHERWISE YOU ARE COMPLICIT IN THEIR CRIMES.

    MR OBAMA?

    GOING TO INDIA?

    WHAT ABOUT GOING TO THE AREAS WHERE FORECLOSURES HAVE DESTROYED THOSE COMMUNITIES?

    WHAT ABOUT DOING WHAT IS RIGHT, ENFORCE THE LAWS, CALL FOR A MORATORIUM, AND PROSECUTE THE CRIMES.

  17. Ed Prescott, 2004 Nobel Prize winner said:

    I do predict the U.S. will lose a decade of growth. Marginal tax rates will be increased. Productivity-depressing policies will be adopted.

    When asked what we should do now, he said (more or less exact quotes, based on my rapid typing):

    Don’t subsidize inefficiency. Cut tax rates to get people to work more.

    This financial stuff is much ado about nothing. I don’t see any reason for the taxpayers to bail out Goldman Sachs in a roundabout way. Let these businesses go bankrupt. They gambled, they lost. That’s part of life.

    http://www.businessweek.com/the_thread/economicsunbound/archives/2009/03/harsh_predictio.html

  18. http://www.market-ticker.org

    If The Economy Is Recovering….

    … why is the number of people on food stamps up 17% from last year?

    Some 42,389,619 Americans received food stamps in August, a 17% rise from the same time a year ago, according to the U.S. Department of Agriculture, which tracks the data. That number is up 58.5% from August 2007, before the recession began.

    Remember, “The Recession ended in the summer of 2009.”

    Oh really?

    Even during the summer children returned to schools to take advantage of free lunch programs where they were available. Nearly 195 million lunches were dished out in August and 58.9% of them were free. Another 8.4% were available at reduced prices. That number will surge when the fall data are released because children will be back in school. Last September, for example, more than 590 million lunches were served, nearly 64% of which were free or reduced price.

    SIXTY-FOUR PERCENT OF ALL SCHOOL LUNCHES ARE SUBSIDIZED BECAUSE THE FAMILY CAN’T AFFORD TO FEED THEIR KID(S)?

    But government tells us “the economy is improving.”

    Liars.

    Bernanke has now imposed nearly two trillion dollars of tax on the American economy since 2009 (including the latest $600 billion announced) in the form of “Quantitative Easing”, and this tax is abusively regressive, since food and energy constitute a much larger proportion of a poor person’s spending than a wealthy person’s. Every nickel of that money has gone to either pay banker bonuses or prop up bankrupt institutions. On an annualized basis this is more than fourteen times the amount of the Bush “Tax Cuts” that are about to expire.

    You, America, remain willing to sit still for this unlawfully-imposed tax.”

  19. by the way, my previous post was pulled from http://www.market-ticker.org

  20. Joseph Stiglitz:

    Rewriting the rules of the market economy – in a way that has benefited those that have caused so much pain to the entire global economy – is worse than financially costly. Most Americans view it as grossly unjust, especially after they saw the banks divert the billions intended to enable them to revive lending, to payments of outsized bonuses and dividends.

    This ersatz capitalism, where losses are socialised and profits privatised, is doomed to failure. Incentives are distorted. There is no market discipline. The too-big-to-be-restructured banks know that they can gamble with impunity – and, with the Federal Reserve making funds available at near-zero interest rates, there is ample money to do so.

    We need to break up the too-big-to-fail banks; there is no evidence that these behemoths deliver societal benefits that are commensurate with the costs they have imposed.

    This raises another problem with America’s too-big-to-fail, too-big-to-be-restructured banks: they are too politically powerful. Their lobbying efforts worked well, first to deregulate, and then to have taxpayers pay for the clean-up. Their hope is that it will work again to keep them free to do as they please, regardless of the risks for taxpayers and the economy. We cannot afford to let that happen.

    http://www.commondreams.org/view/2009/06/09-8

  21. dear Frakeelee,

    great post, I am so mad!!!!!!!!!!!!!!!!!!!!!

  22. The No-Shop Zone

    Christmas is coming.

    Black Friday is coming.

    And you, Dear Friends, have a choice to make.

    You can ratify – or reject – the illicit $600 billion tax increase that Bernanke just landed on our economy with his ill-conceived and outrageous “Quantitative Easing” nonsense – especially the most-vulnerable members of our economy – the poor and working poor, who are disproportionately impacted.

    How?

    Simple: DO NOT DO BUSINESS THIS HOLIDAY SEASON DIRECTLY, OR WITH ANY MERCHANT THAT BANKS WITH:

    * JP Morgan/Chase
    * Citibank
    * Bank of America
    * Wells Fargo

    These are the four largest banks in America. They are the ones who disproportionately benefited from the bailouts, and who continue to hold hundreds of billions of dollars on their balance sheets of HELOCs and other home loans that are worth far less than what they are claiming.

    These are also the banks in the middle of Foreclosuregate. I remind everyone that Citibank’s former Chief Underwriter said, under oath, that Citibank was knowingly making bad loans – 60% by 2006 and 80% by 2007 – and selling them off in securities to pension funds and other investors. Instead of being forced to eat these bad loans and be closed as a consequence they were bailed out with our taxpayer money, and still are by Bernanke’s “Quantitative Easing.”

    Exercising your lawful right to refuse consent to this is simple: Ask the merchant you are considering purchasing from who they bank with. Be cordial. If it’s one of the above, take your business somewhere else and tell them why.

    If you have accounts at these banks: Close them and move your money somewhere else – to a local bank or credit union.

    To Merchants: You can avoid this. Close out your merchant and deposit relationships with these institutions. Use a local, community bank instead. If you’re a large chain, use someone other than these four. There are alternatives and choices.

    We as consumers must choose. We have every right to deny these institutions any benefit from our business, and to continue to do so until every one of their so-called “assets” is marked at the market, transparently, and the Federal Reserve’s “accommodations” that are making possible the hiding of losses – both QE1 which created a huge ramp in oil and commodity prices, and QE2 which is doing more of the same, along with severe damage to the value of the dollar, is withdrawn and in fact reversed.

    We have the choice to withdraw our consent to the inappropriate levying of an effective $600 billion tax on Americans via higher prices for gasoline and basic foodstuffs – a tax that disproportionately hits the poor and middle class. A tax that is seventeen times the size of George Bush’s “Tax Cuts”, yet was unilaterally enacted by Ben Bernanke without Congressional authorization or debate.

    Freedom of association includes the freedom not to associate and not transact. I elect to do so for any firm that banks with these four “monster banks” who literally ate our nation’s prosperity.

    JOIN ME IN THIS PROTEST, STARTING NOW, AND DENY THESE INSTITUTIONS ANY ABILITY TO PROFIT FROM YOUR ECONOMIC ACTIVITY.

  23. Why should any nation allow absolute power such as this?

    Robert Reich:

    Finally, consider the political power of the big Wall Street banks. They and their executives and employees are now among the biggest contributors to both parties. Wall Street lobbyists are crawling over Capitol Hill. The banks and their lobbyists will ensure that regulatory loopholes are built into regulations from the start. Remember: They dismembered Glass-Steagall (with the help of their friends in the Fed, on the Hill, and in the Clinton White House) and fought off derivative regulation (ditto).

    As long as the big banks are allowed to remain big, their political leverage over Washington will remain big. And as long as their political leverage remains big, the taxpayer and economic tab for the next mess they create will be big.

    By all means, give regulators resolution authority, and also impose the tightest regulations possible. But Congress and the White House shouldn’t stop there. Limits should be placed on how big big banks can become.

    How big? No one has been able to show significant efficiencies over $100 billion in assets. Make that the outside limit.

  24. Does the government currently have the authority to put a multinational institution as large as Citigroup or a B of A into receivership?

    Hoenig addressed that directly. He was asked that question. He’s worked for the Fed for 30 years. He’s managed a lot of bank winding downs and receiverships in his district, or he’s been involved in them, and his answer to that question was yes. So, I’m no longer going to say take my word for it, I’m going to say call Mr. Hoenig. It was a striking statement. To my mind, he directly contradicted what Secretary Geithner said when he testified on the need for the resolution authority. The resolution authority would be helpful, it’ll give you a better tool to use, but Hoenig definitely said it can be done, now, following the Continental Illinois model of a negotiated conservatorship. That was the most important thing said at the JEC hearing. Although I do support giving them the resolution authority.

    What we have been arguing for consistently is recapitalization on the basis of a government takeover and government-managed process. So you wipe out the shareholders, and then, how much of a hit you put on the creditors depends on the political calculation. How much money can you raise, which creditors do you protect? Our priority is protect the payment system: You want to protect deposits and anything that is like a deposit. If you force people to take losses on the payments part of the system, then all hell is going to break loose. But if you protect that, then the rest of it is a calculation about how much do we want to guarantee creditors, and I think at this point, with the situation a little bit calmer than it was last fall, everyone agrees that creditors need to take some sort of hit in an organized fashion.

    http://www.salon.com/technology/how_the_world_works/feature/2009/04/23/simon_johnson

  25. April 2009:

    “BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you’re seeming disillusioned now.

    WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they’re refusing to obey the law.

    BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

    WILLIAM K. BLACK: Well, you do a receivership. No one — Ronald Reagan did receiverships. Nobody called it nationalization.

    BILL MOYERS: And that’s a law?

    WILLIAM K. BLACK: That’s the law.

    BILL MOYERS: So, Paulson could have done this? Geithner could do this?

    WILLIAM K. BLACK: Not could. Was mandated–

    BILL MOYERS: By the law.

    WILLIAM K. BLACK: By the law.

    BILL MOYERS: This law, you’re talking about.

    WILLIAM K. BLACK: Yes.

    BILL MOYERS: What the reason they give for not doing it?

    WILLIAM K. BLACK: They ignore it. And nobody calls them on it.

    We should! We should call/write/meet with our legislators and DEMAND that these banks be taken into receivership as per the Prompt Corrective Action Law. If they balk or refuse, tell them it’s the law, and that you’ll go to every single media source there is exposing them to be in cahoots with fraud. It’s the only way. We have to take this stuff into our own hands, because our lawmakers are in bed with the enemy.

  26. Well – this makes me feel better. Thanks, Neil.

    Mike H, – Bank of America’s problems go way back to before it’s purchase of Countrywide..

    And, Mike H – the reason Bank of America purchased Countrywide — is because they had already purchased Countrywide’s loans – before they purchased Countrywide!! And, this among many other originator loans.

    Not only that – but how and why did they purchase the loans?. Hope the investigators are onto this. Bank of America has been hiding – much!! Time to tell it like was/is.

    But – go ahead Mike – keep buying the stock. To each it’s own. Larry is probably right – and you may just make a nice profit. On the other hand…………………. – fill in the blank.

  27. This is a pretty good article about Bank of Amerifraud

    http://www.huffingtonpost.com/william-k-black/yes-lets-set-the-record-s_b_779031.html

  28. I can’t wait to see Non-boa fail! But I don’t think it will happen because there are too many politicians going to have their pockets lined.

  29. BoA’s problems come from the fact they were forced to buy Countrywide by Paulson, something Lewis did
    not want to do.
    In spite of the gloom and doom, BOA will survive even if the toxic loans they got from Countrywide implode. Since the price is low, now is the time to
    buy BOA stock, it’s a bargain. They will survive. My
    opinion only, I hope I’m correct for the good of the USA
    and its economy.

  30. I pity the fool that gives any banks a bailout.

  31. I’ve never understood various versions of this claim, “The second is that banks may actually believe that if they do not take care of their best talent…”

    What “best” talent??? These idiots should have been fired long ago. They have NO talent.

  32. Clawbacks anyone?

    ….Bank of America will also pass out handsome bonuses to its bankers, just a few months after its repaid the government $45 billion in aid that it got to stay in business through the credit crisis. The Wall Street Journal reports that the bonus pool at B of A will be more than $4 billion. Traders will collect an average of $300,000 to $500,000, according to the paper. Only 25% of the payments will be in cash. Most of the rest will be in restricted stock paid over three years in most cases. The fact that any incentives were paid at all will be considered remarkable, at least by members of Congress and the Administration.

    The bonus payments at both firms and at almost every other company on Wall St. are telling in two ways. The first is that managements at these banks are willing to defy the sentiments of the government and taxpayers by rewarding themselves for what they see as tremendous returns to their shareholders, the taxpayers be damned.

    The second is that banks may actually believe that if they do not take care of their best talent that these people will leave for hedge funds, private equity firms, or foreign banks.

    It was hard to be in the banking business for about a year if one’s primary goal for being in the industry was to make a lot of money. That short hiatus is over. The big paydays are back.

    Read more: Bank Of America And AIG Set Favorable Bonus Payouts – 24/7 Wall St. http://247wallst.com/2010/02/03/bank-of-america-and-aig-set-favorable-bonus-payouts/#ixzz14LrT0m4d

  33. Tis the season to be jolly

  34. On another forum kickboxer was scolded for saying B of A might be going defunct. Can’t find the link now – but I know it came from Shame The Banks – something on insider leak that B of A would be imploding by Christmas. If this is true…MERRY, MERRY CHRISTMAS and a HAPPY NEW YEAR to all of us suffering from B of A’s oppression! And may more banksters follow!!! Fa-la-la-la-la-la-la-la

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