It might just be election time. We have Bank of America being sued for Countrywide's hustle, a program which pawned off bad mortgages onto Fannie Mae and Freddie Mac from 2007 to 2009. The U.S. District Attorney, Office’s Civil Frauds Unit in New York filed a civil complaint against BoA, who acquired Countrywide, for $1 billion.
The Complaint seeks civil penalties under FIRREA, as well as treble damages and penalties under the False Claims Act, for over $1 billion in losses suffered by Fannie Mae and Freddie Mac for defaulted loans fraudulently sold by COUNTRYWIDE and BANK OF AMERICA.
Manhattan U.S. Attorney Preet Bharara said: “For the sixth time in less than 18 months, this Office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis. The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope. As alleged, through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill. As described, Countrywide and Bank of America systematically removed every check in favor of its own balance – they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners, and concealed the resulting defects. These toxic products were then sold to the government sponsored enterprises as good loans. This lawsuit should send another clear message that reckless lending practices will not be tolerated.”
Just when you think Justice will never be done, another civil lawsuit is filed. The FDIC filed three lawsuits against Goldman Sachs, JP Morgan Chase and BoA among others for peddling bad mortgage backed securities stuffed with toxic mortgages to their sucker, Guaranty Bank of Austin, Texas. Guaranty Bank later failed in 2009. Housing Wire:
This week, the regulator filed multiple lawsuits in Travis County (Austin), suggesting Guaranty suffered major losses from toxic RMBS loans sold and packaged by mega banks and other financial institutions.
Defendants named in the multibillion-dollar lawsuits include Countrywide, JPMorgan Chase ($38.04 0%), Ally Financial, Deutsche Bank Securities ($34.07 0%), Bank of America ($8.19 0%) and Goldman Sachs ($105.32 0%) among others.
FDIC, on behalf of Guaranty, claims the banks misrepresented loan-to-value ratios, underwriting criteria and appraisal amounts when selling, packaging and underwriting home loans that became collateral for mortgage securities sold to Guaranty.
It there was ever a message from our government, it's this. If someone has enough money and power, they can get away with anything. There will be no consequence and no punishment for the rich and powerful.
Once again, Goldman Sachs gets completely away with it. The Department of Justice, closed the books on pursuing Goldman Sachs. Now this is most interesting, you cannot find the statement, press release, nothing on the DOJ website or anywhere. Some claim the DOJ statement is in Goldman Sachs 10-Q, but no, not there either.
About the only place you can get the DOJ statement, it appears, is ABC News, second hand and not directly uploaded.
Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”
We all know Too Big To Fail Banks became even bigger from the financial crisis. We also know previous mergers and acquisitions along with financial deregulation allow banks to own, invest and advise, often on the same transactions or deals. We also know time and time again, this has led to strong conflicts of interest and disaster for shareholders, taxpayers and customers.
The latest is an acquisition deal of El-Paso, a natural gas pipeline operator, by Kinder Morgan, a competitor. Seems Goldman Sachs made off with a $25 million fee for advising El-Paso, all the while having a 19%, $4 billion dollar stake in Kinder Morgan, plus a couple of seats on the Kinder Morgan board to boot.
There is a clear conflict of interest on the El Paso-Kinder Morgan deal. The stink is so bad, Goldman Sachs even brought the wrath of Delaware Chancellor Leo Strine who called the deal tainted with disloyalty. Of course the acquisition of El Paso by Kinder Morgan goes through anyway, in spite of the court admonishment.
This quote describes the new corporate culture exposed by ex-Goldman Sachs employee Greg Smith. In a scathing commentary, Smith says Goldman Sachs preys off of their clients and the company is all about making money...for Goldman Sachs and themselves, that is. Internally they call clients Muppets, institutions and people to milk money from.
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
Déjà vu, it's 2008 all over again. Why are gas prices soaring through the roof?
Some are revisiting oil speculation as the culprit. Commodity futures speculation always pops up in the public discourse the minute gas prices go above $3.65, yet nothing ever seems to come of it.
Our usual stupid political tricks, from tapping the strategic oil reserve to the GOP blaming Obama for gas prices, are in full swing. Isn't this all getting rather old? Wouldn't we all just like a stable price fluctuation in a key critical commodity upon which our economy and our empty pockets depend?
We know one thing, $5 gas can literally kill economic recovery. Oil shocks are correlated to recessions, as James Hamilton points out as do others. Below is a quarterly historical graph of real GDP percent change vs. the West Texas Intermediate average Oil Price. Notice the spikes in oil price and the grey recession bars.
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Target Knows You're Pregnant Before You've Told Anyone
The never ending invasion into our privacy knows no bounds. We just saw Google ignoring browser privacy settings and even when you delete cookies, flash cookies and even use proxy servers, you're being tracked. For those who have strong boundaries this is just irritating as hell. It's also stupid in terms of statistics. One percent, which is the typical dismissed exception of these profiling algorithms, equates to 3 million people in the United States.
The Government Accountability Office has completed their audit of the Federal Reserve. Guess what the GAO found? Conflicts of Interest. It seems the Banksters are sitting on the Federal Reserve board, supervising their own institutions. The fox is guarding the hen house in other words. One of the most damning GAO discoveries is the timeline of Goldman Sachs turning into a holding bank and a Goldman Sachs board of directors, Stephen Friedman, also serving as the New York Federal Reserve chair.
It might just be election time. We have Bank of America being sued for Countrywide's 
Just when you think Justice will never be done, another civil lawsuit is filed. The FDIC filed three lawsuits against Goldman Sachs, JP Morgan Chase and BoA among others for peddling bad mortgage backed securities stuffed with toxic mortgages to their sucker, Guaranty Bank of Austin, Texas. Guaranty Bank later failed in 2009. 
It there was ever a message from our government, it's this. If someone has enough money and power, they can get away with anything. There will be no consequence and no punishment for the rich and powerful. 
We all know Too Big To Fail Banks became even bigger from the financial crisis. We also know previous mergers and acquisitions along with financial deregulation allow banks to own, invest and advise, often on the same transactions or deals. We also know time and time again, this has led to strong conflicts of interest and disaster for shareholders, taxpayers and customers. 
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
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