BOA LYING OR STUPID?

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11.04.10Bank-of-America-s-Rejection-Letter-on-Mortgage-Claims

Originally this question was posed by Brad Keiser as an ex-banker, in his presentation for the seminars we did back in 2008-2009 as part of the Garfield Continuum. It was directed at Paulson, then Secretary of the Treasury and Bernanke, FED Chairman. He posed the question because the facts were right there in front of them and yet they said and did nothing about the crash that was obviously already in progress. Paulson, either on his own, or at the direction of others in the Bush administration, kicked the can down the road a bit and delivered the mess to the Obama administration contemporaneously with the implosion of the markets, freezing of credit and swooning economies around the world. Keiser specifically (it’s in the DVD and the workbook) showed that a quick look at the tier 1, tier 2 and tier 3 assets on the books of these banks showed they were over over-leveraged on either non-existent or at least dubious assets. He predicted within 6 months of September 4, 2008 that the major banks would fail and he was even able to to estimate the order in which they would fail. The only thing he was wrong about was the timing. It was six weeks not six months.

So here we are doing the same thing. And Moynihan, the head of BOA, is saying he was caught off guard by the demand for refunds from the investors and the Federal Reserve. BOA stock is selling at fraction of book value, the investors have been screaming about losses for three years, homeowners are being thrown out in the street, properties are being sold for a tiny fraction of the appraised value at the time of the “loan,” class actions are being settled, criminal investigations have begun, and in congressional hearings and media reports there are large questions being asked about the validity of any of these securitized mortgages as liens against any property. But Moynihan was somehow surprised when he got that letter even though the same content was delivered to him in the form of a warning letter from the insurance industry one month before.

Even a con man knows enough to admit what is obvious, known and undeniable. This is like the kid who says he doesn’t know who broke the window, while he’s holding the bat and searching for the ball. MEMO to WALL STREET: We are not stupid. We were ignorant, but we are not that either anymore. BOA stock has tanked precisely because the validity of BOTH the foreclosures and the mortgages themselves are in doubt. It is losing credibility because the mortgage “bonds” are turning out to be snake oil. Which means all those other “synthetic” options and derivatives are in the same place. It has cast doubt on the entire enforceability of any of the consumer debt in this country and other countries, and BOA is saying it doesn’t see anything wrong. So now doubt is cast on the entire derivative finance structure created since 1983 amounting to more than $600 trillion which is supposed to be moved onto transparent exchanges. In order to do that, there is going to be a requirement that someone certify the financial statements that are being used.There is now doubt as to how much, if any, of that really exists and how much is just a figment of of the collective imagination of a command center.

And don’t look for that command center. Shell game. Wherever you look it is somewhere else. “Trustees” disclaim any fiduciary obligations, servicers disclaim any power, investors disclaim any control, investment bankers disclaim any knowledge, and mortgage originators disclaim any responsibility.

Which brings me to the next question. Are the auditing firms going to get sued by stockholders in the banks, investors in mortgage securities, homeowners (as victims of the conspiracy) or all three? And the corollary question is whether there is enough money in the auditing firms and insurance companies to pay for this mess?

Posted in bubble, Corruption, Eviction, securities fraud |