Today, New York State’s Attorney General asked a judge to reject an agreement concocted between Bank of America (BAC) and a tiny number of institutional investors that would have paid $8.5 billion to settle the “current unpaid balance” of $220 billion on some securitized home mortgage loans with a face value of $424 billion, imposing that settlement of 4 cents to the dollar on every investor holding those bonds. Among the reasons, the securitization process was so flawed that these things probably aren’t bonds at all. Countrywide Financial, the original lender BAC absorbed as part of all those deals brokered by Goldberg Styx kingpins in Washington to keep Goldberg Styx alive, screwed up the paperwork so bad it may not be possible for Bank of New York Mellon, trustee for all the bonds, to foreclose on the homeowners who couldn’t afford the homes they got talked into owning, meaning BAC still holds the mortgages and never actually securitized them into anything in the first place. Then there's all the fraud. Everywhere.
Lender fraud. Securitizer fraud. Trustee fraud. Underwriter fraud. Fraud was a really big problem to the Attorney General here.
In short, the Attorney General thinks BAC has to give the bondholders all their money back and put the mortgage loans on the BAC balance sheet, and he wonders why this resolution shouldn‘t apply to all the bonds securitizing the civilized world and Iceland into Financial Armageddon a few years ago.
The MacDougal Post suggests subscribers may want to wait a bit longer before taking a second look at, well, pretty much the entire financial sector. After this news, our prognostication is beyond grim, and frankly we’ve never even heard of that many stocks all hitting zero together before, and nobody here can figure out what else to tell you about investing in the racketeering scum at this time.
If any of you can come up with a reason why this guy isn't right, or why being right in New York isn't a whole lot different than being right in Washington, please let us know.
We'd be delighted to pass it along.
