Posts Tagged ‘Bank of America’

Blowing the Lid Off the Obama Bail-outs: B of A Hiding the Damage?

Wednesday, March 14th, 2012

Where His Bread Is Buttered?

Bank of America has come under fire, and there is now a class-action lawsuit by borrowers who feel as though they are being cheated by the banking giant, and perhaps on behalf of a political agenda.  As has now become plain, Bank of America is using its internal bureaucracy to slow down the wheels long enough for Barack Obama to be re-elected, before the full scope of tax-payer liability is revealed in the whole bank bail-out scheme and mortgage modification scam put forward by the Obama administration.  Borrowers are complaining that they have brought their accounts current under the new modifications to their mortgages, but that the banking giant is keeping them in limbo in order to hide the truly damaging scope of the bail-outs.

You see, the deal isn’t done until each mortgage modification has made its way through the paper-shuffle at the Bank of America, but this is causing trouble for borrowers who have long since gotten their financial house in order and need to secure loans on such things as new cars.  They’re finding out that their credit reports still show the mortgages as overdue, despite the fact that they’ve complied with their agreements on the modifications to their mortgages, some of them longer than two years ago.  Why is it taking Bank of America so long to square things away?  The answer is simple, and political, and it comes down to more subterfuge on behalf of their favorite politicians.  You see, when these deals are finalized, they’ll show a loss, and it will be huge, and they want to be sure to minimize damage until after the November elections.

In the mean time, their now-current mortgage-holders are simply in limbo, and while we can argue that they might deserve a hit on their credit, they would get one anyway, but the truth is that these mortgage holders may have been only a month or two behind, and made the agreement as a stop-gap since so many were recently unemployed at the time.  They didn’t think this would drag on, or that two years later, their credit reports would show them as non-payers on their mortgages for more than two years.  Worse, Bank of America is in receipt of funds for this purpose under the Home Affordable Modification Program(HAMP)

In one case, the complaint against Bank Of America alleges:

“[Bank of America] has serially strung out, delayed, and otherwise hindered the modification processes,” leaving thousands of borrowers “often worse off than they were before they sought a modification.”

This is quite the enterprise.  Bank of America took $25 Billion from the US government in order to facilitate these modifications, and to date, they’ve actually sat on most of that money while tying up the loan modifications in red tape.  Worse, the longer this goes on, the worse the position of those now in limbo.  You might ask why they’d be interested in doing all of this, since they could simply modify the mortgages and move on, but that might be a sticky matter.  Bank of America would have to report large losses that would demonstrate the failure of TARP.  As long as all of these modifications are in limbo, they are neither losses nor does BofA need to disburse any of the $25 billion.  that makes a whale of a difference on balance sheets as reported to investors.

Another reason Bank of America may be keeping this “in process” is that the elections of 2012 are just around the corner, and BofA has made significant investments in the political arena.  A trip to OpenSecrets.org reveals that in 2008 alone, Barack Obama cashed in to the tune of nearly $400,000 from BofA contributors.  In 2012, Mitt Romney has received a fair amount of cash, as has Obama, from Bank of America-related sources.  Coincidence?  Possibly, but Bank of America has so many ties to so many high-ranking politicians, including our previous President that it’s hard to pin this down on a partisan basis.  It looks more like a ruling-class benefit, looking at the objects of political giving associated with Bank of America.

On Tuesday, a tweet came in from none other than Ann Barnhardt with a link to another story about Bank of America, and what the author over at market-ticker thinks of the institution, along with a track-back to what Matt Taibbi, an Occupy Wall Street member has to say about all of this.  At least in this context, Mr. Taibbi is correct:  Bank of America should be allowed to fail.  It’s been propped up and supported and kept afloat with your future tax dollars.  Worse, with politicians of both parties in its hip pocket, there seems to be no end in sight.  It makes it easier to understand how characters like Barack Obama, an anti-capitalist, and Mitt Romney, a self-described “capitalist” both supported TARP, an astonishingly anti-capitalist idea.  It also explains why we, the tax-payers, keep getting placed on the hook for the failures of these firms.

Unless and until we start paying closer attention to whom it is that funds our politicians, we are likely to see this same trend continue unabated.  What does it say about what we’ve let become of capitalism that these large institutions are able to purchase so much influence in our political system?  I don’t have a problem with donations, and I think they should be unlimited, but we voters are going to need to pay attention to the flip-side of that:  We will need to pay attention to the disclosures, and vote accordingly.  As I’ve reported previously, Bank of America along with Chase have moved some risky Euro-based derivatives into coverage by the FDIC.

This needs to cease, and I’m concerned that if we elect Mitt Romney, this will continue like a hand-off from George W. Bush to Barack Obama to Mitt Romney, and that it will continue unabated.  The large banks that are failing need to fail, and the American taxpayer has every reason to expect its government to be good stewards of their money, instead of putting good money after bad.  Here we have a company that has abused its customers in order to take money from the Federal government in order to assist them.  Whatever you may think of the HAMP program philosophically, it was implemented in law, and to see this sort of abuse continue is ridiculous, but to see it continued even longer to allow some politicians cover is a scandal about which we should all be concerned.

 

Advertisements

Another Downgrade on the Horizon?

Sunday, October 23rd, 2011

Worse This Time?

Leave it to Bank of America/Merrill Lynch to publish their fears of another credit-rating downgrade for the US government.  On Saturday, I brought you the story of how this very company is shifting some of its European derivatives over to its depository arms so that they will be insured under FDIC.  It’s a stunning development that an analyst for this very institution to  tell us they expect another credit downgrade, tells us something about how they believe that will work out for the American tax-payer that will now be on the hook for trillions. They don’t think it’s going to turn out well, I can assure you, but you can expect all sorts of hand-wringing excuses when the meltdown occurs.

In his dire analysis, Ethan Harris writes:

“We expect a moderate slowdown in the beginning of next year, as two small policy shocks—another debt downgrade and fiscal tightening—hit the economy. The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan. The committee is more divided than the overall Congress. Since the fall-back plan is sharp cuts in discretionary spending, the whole point of the Committee is to put taxes and entitlements on the table. However, all the Republican members have signed the Norquist “no taxes” pledge and with taxes off the table it is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts. The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.”

Of course, part of the problem is that everybody is waiting for the other shoe to drop.  Europe stands on the verge of a complete meltdown, and our Federal Reserve has gotten us so deeply tied to the success or failure of Europe at this point that if Europe goes down, we will likely fall down too.  Several outlets are reporting that a number of European banks are on the brink, and that this will trigger a sell-off and panic unlike anything we’ve seen in a long time.

At the same time Germany’s Angela Merkel is chastising Italy over its debt of 120% of GDP, I wonder if she’d do us a favor and look at the US, which isn’t far off from that ratio itself, and tell Obama a thing or two while she’s at it.  Merkel is among those who are urging further austerity measures, and she’s right. The trouble is that leftists never tire of pitching their best Keynesian plans at these sorts of problems, pretending that if only they can borrow and print a little more liquidity, the problem will solve itself.  Naturally, that’s nonsense, and while everybody knows it, the spenders will never, ever admit it.

Ladies and gentlemen, we stand on the precipice and wonder why this is happening, but anybody who has ever learned the hard lessons of running on credit must begin to see the simple truth of the matter:  You cannot consume more than you produce on an indefinite basis.  This entire fiasco is the result of runaway governments spending our future into oblivion.  While we’re at it, we must also rein in the Federal Reserve as the policies now in force are merely multiplying the trouble.  One year ago, as they began to plan out QE2(Quantitative Easing, Round 2,) Sarah Palin warned the world.  She was mocked by Krugman, the purveyor of Alien Attacks and other nonsense dressed up as economics, while she was being berated for her stance by a host of others, but in the end, who has been right?  We mustn’t permit ourselves to suffer under this comfortable illusion any longer: There is no alternative but to dramatically slash government spending.  We must do it now, or there may be no tomorrow.

Weakening America: The Federal Reserve’s Latest Risky Scheme

Saturday, October 22nd, 2011

Taxpayers on the Hook - Again

It simply doesn’t seem possible, and yet here it is, right in front of us: Our own Federal Reserve under the direction of Ben Bernanke is pushing for a policy that will leave American tax-payers on the hook for tens of trillions of dollars in liabilities.  European derivatives for Bank of America in its Merrill investment banking unit  are being shifted to the depository arm and this is insured under FDIC, your Federal Deposit Insurance Corporation.  That’s right, this is going to be a gigantic crisis when Europe finally implodes, and with Greece now needing a 60% write-down on its bonds, you must know that calamity is right around the corner.   What’s worse is that it is now revealed that this will be hidden from you in part due to Dodd-Frank, the “financial reform” law that Congress passed in 2010.

Ladies and gentlemen, our country is being systematically destroyed.  These obligations are the financial form of a dirty bomb planted in the US Treasury, and it will destroy us.  This is insanity.  It also turns out JP Morgan is doing much the same thing.  We’re talking about trillions of dollars in redistribution of tax-payer wealth to private global banking interests.  This is setting the stage for the mother of all bail-outs.  I can’t believe that this is being done, or that anybody thinks this is a prudent plan.  It’s as though the American tax-payer is being robbed at gunpoint without knowing it.

This is the one thing about which Ron Paul is consistently correct:  The power of the Federal Reserve system must be curtailed if not eliminated entirely.  We simply can’t afford any more of this.  It has the potential for destroying us.  Our political leaders must stand against this, but in too many cases, they’re part of the problem because they’ve enabled much of this.

We need a return to a sound monetary system, and those who think it should be tied to the other currencies of the globe are out of their minds.  Of course, they want that for the same reason this is being done:  To offer themselves protection. Ladies and gentlemen, we’re looking at a possible, or even probably catastrophe here, and other than just a rare few media outlets, nobody is telling you about it. You should begin to wonder why they’re not.