Taibbi: Bank of America, Raging Hurricane of Theft and Fraud

[tpsbmam]

The first is that it's corrupt. This bank has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake.

The second is that all of us, as taxpayers, are keeping that hurricane raging. Bank of America is not just a private company that systematically steals from American citizens: it's a de facto ward of the state that depends heavily upon public support to stay in business. In fact, without the continued generosity of us taxpayers, and the extraordinary indulgence of our regulators and elected officials, this company long ago would have been swallowed up by scandal, mismanagement, prosecution and litigation, and gone out of business. It would have been liquidated and its component parts sold off, perhaps into a series of smaller regional businesses that would have more respect for the law, and be more responsive to their customers.

But Bank of America hasn't gone out of business, for the simple reason that our government has decided to make it the poster child for the "Too Big To Fail" concept. Because it is considered a "systemically important institution" whose collapse would have a major, Lehman-Brothers-style impact on the economy, two consecutive presidential administrations have taken extraordinary measures to keep Bank of America in business, despite a staggering recent legacy of corruption schemes, many of which were simply overlooked by regulators.

This is why the question of whether or not Bank of America should remain on public life support is so critical to all Americans, and not just those millions who have the misfortune to be customers of the bank, or own shares in the firm, or hold mortgages serviced by the company. This gigantic financial institution is the ultimate symbol of a new kind of corruption at the highest levels of American society: a tendency to marry the near-limitless power of the federal government with increasingly concentrated, increasingly unaccountable private financial interests.

Those are just the 1st 4 paragraphs of a great piece.

[tpsbmam]

1. Kick #1. nt

[banned from Kos]

2. Bank of America "on public life support"? How financially ignorant can this gifted writer be?

They repaid all of TARP plus $4.5 billion in interest, repaid all their Fed loans and were forced to raise $40 billion in the private market including from Buffett -who is no charity giver.

Their stock has doubled since Dec and they are paying out big in the robo-deal.

Seriously, find a new villain, Matt.

[gratuitous]

3. So B of A doesn't robosign anymore?

You should contact the State of Nevada, which seems to think that Bank of America continues its consumer defrauding ways:

Bank of America has ruthlessly preyed upon millions of homeowners, throwing them out on the street on the strength of doctored, "robosigned" paperwork created through brazenly illegal practices they helped pioneer — the firm sped struggling families to foreclosure court using perjured affidavits produced in factory-like fashion by the hundreds or thousands every day, with full knowledge of management. Through the firm's improper use of an unaccountable private electronic mortgage registry system called MERS, it also systematically evaded millions of dollars in local fees, forcing some communities to cut services and raise property taxes.

Even when caught and punished for its crimes by the authorities, Bank of America has repeatedly ignored court orders. It was one of five companies identified in two separate investigations earlier this year that were caught continuing the practice of robosigning, even after promising to stop in a legally binding consent decree. Last summer, the state of Nevada sought to terminate a settlement over mortgage abuses it had entered into with Bank of America after it found the company was brazenly violating the agreement, among other things raising payments and interest rates on mortgage customers, despite the fact that the settlement only allowed them to modify loans downward.

I suppose that it could be argued that Bank of America isn't technically on public life support; it's just not paying millions in unpaid fees to localities. It sort of works out to the same thing, though. Saints they are, not villains. Got it.

[banned from Kos]

4. They are certainly not saints but they have 50 million customers despite their shenanigans.

I say leave them but 50 million customers don't want to (granted a few mortgage holders can't).

And this kind of bad reporting from Taibbi ticks me off:

"This move, encouraged by the Obama administration, put the American taxpayer on the hook for an entire generation of irresponsible gambles made by another failed investment firm that should have gone out of business, but was instead acquired by Bank of America with $25 billion in taxpayer help – Merrill Lynch."

There is simply no truth to that bullshit from Taibbi. ML was acquired during 2008 by Bank of America. And if he is referring to the derivatives then the Fed gave the OK on that despite reservations from the FDIC. The Fed is not part of the Obama administration. The FDIC is and they objected.

I will call MT out for his lies/mistakes every time.

[gratuitous]

6. Well, as long as they have a lot of customers, it must be okay

But the fact of the matter is that Bank of America is being propped up by the taxpayer, pursuing questionable and illegal practices, and the administration isn't very interested in keeping an eye on it. The "bad reporting" you're mis-citing is not about Bank of America's acquisition of Merrill Lynch, but is about "This move," which is the introductory to your quote. What "move" is Taibbi referring to? This one:

Last summer, for instance, the Bank – in order to satisfy creditors who were nervous about the enormous quantity of risky assets on its balance sheet – decided to move some $73 trillion (that's trillion, with a T) in exotic derivative bets from one end of the company into the federally-insured, depository side of the bank.

And Taibbi is drawing a parallel between Bank of America's balance sheet shifts and the shady practices of Merrill Lynch that led to its absorption by Bank of America. Bank of America has in effect socialized its risky investments by moving them from its investment accounts to the part of the balance sheet that's federally insured, its deposits. And its 50 million customers just might find out how poorly they're being served (both by the bank and by the administration that's supposed to be enforcing the law) if Bank of America can't keep juggling all the balls it has in the air.

[banned from Kos]

7. What do you mean that no one is keeping an eye on them?

Bank of America just easily passed a strenuous stress test (they failed in 2009). The cost of them failing in 2009 was substantial.

And the ML derivatives are not federally insured. It doesn't matter where they sit on an Org chart.

Bank of America is NOT being "propped up" in any way shape or form. And you can believe I chuckle at the ZeroHead Doomers every time the stock moves up. Go long - bet on America and President Obama like Buffett has.

[sabrina 1]

9. Sorry, but Matt Taibbi's record of being CORRECT about the economic crimes that have

destroyed the Global Economy, trumps yours any day. When you something other than 'they have a lot of customers' to refute him, we'll listen.

Hopeful exposing their corruption, will reduce that number. It's hard to believe you do not know what this Bank has been up to over the past number of years or that you would to in any way defend them.

[trumad]

12. Do a search of this errr member..

His posts are numerous bashing Taibbi and supporting Wall Street.

[sabrina 1]

16. Good luck to him then, Matt Taibbi has been warning about the corruption on Wall Street

for years and has earned his reputation, one that would be difficult to challenge on this issue.

I also believe that it was Julian Assange's threat to publish damaging information on what most people, including BOA, believed was BOA, that was what made him a target (and we know from Anonymous's hacking of their contractors emails that they were out to get him) of the PTBs. They didn't care about his War Logs but when he mentioned he had damaging info on a 'major Bank' that was it for him.

[hughee99]

5. Aren't they stuck with Merrill Lynch's toxic assets

which I understand they managed to move into the "federally insured" area.

http://crooksandliars.com/mike-lux/red-alert-biggest-bank-sweetheart-deals-a

[banned from Kos]

8. "Toxic" is not only debatable - Its highly unlikely.

To date no US bank has failed due to derivatives. NONE. As in ZERO.

AIG did though. That was bad enough.

[sabrina 1]

11. And why didn't the fail?? As they should have?

Because they got Corporate Welfare from the taxpayers and their buddies in Congress saved them. I wish we all could get that kind of help when we commit crimes against our clients. We'd all be able to say 'we didn't fail'.

So the Bank didn't fail because of derivatives. How many investors, pensioners, home-owners failed because of derivatives? Or doesn't that matter?

[banned from Kos]

13. I understand your anger concerning the TARP and Fed loans.

They were due to 2008 and 1913 Congressional acts = both signed by the President (Wilson and Bush).

Wilson - the greatest Progressive president in history -- and Bush.

[sudopod]

15. "the greatest Progressive president in history"

What are you smoking over there?

[banned from Kos]

20. Yeah, Wilson. FDR would be his only competition. 1-2 or 2-1, either way.

In his first term as President, Wilson persuaded a Democratic Congress to pass major progressive reforms. Historian John M. Cooper argues that, in his first term, Wilson successfully pushed a legislative agenda that few presidents have equaled, and remained unmatched up until the New Deal.[1] This agenda included the Federal Reserve Act, Federal Trade Commission Act, the Clayton Antitrust Act, the Federal Farm Loan Act and an income tax. Child labor was curtailed by the Keating–Owen Act of 1916, but the U.S. Supreme Court declared it unconstitutional in 1918. He also had Congress pass the Adamson Act, which imposed an 8-hour workday for railroads.[2] Wilson, after first sidestepping the issue, became a major advocate for the women's suffrage.

Wikipedia

[sabrina 1]

18. I don't know why, but you seem very familiar to me.

Have we met somewhere before?

[fascisthunter]

22. probably

[hughee99]

14. No one is worried about BOA failing, that's sort of the issue.

BOA is free to make some risky gambles (gambles that smaller banks couldn't make) because they have the US taxpayer there to bail them out if necessary.

And didn't the AIG bailout prevent a number of banks from having serious issues due to their derivatives (though I don't know if they would have gone under)?

Then of course you have the $53 Trillion (yes, with a T) they have in the OTC derivatives market, which would seem to be a significant liability as well.
http://usawatchdog.com/four-biggest-banks-in-america-have-huge-leverage/

I'm not saying that BOA is one or two bad deals from going out of business, but let's not pretend they're the model of stability either.

[trumad]

10. There he is---on Q...

Our resident wall street apologist.

[tpsbmam]

19. All I had to see was on DU2 when he referred to "you socialists" when arguing in favor of the FED

and trying to school the "socialists" at DU......I'm surprised he hasn't also been able to tout "Banned from Kos & DU." It was in a thread where he tried (and failed) to call out Alan Grayson on his post, The Fed Bailouts: Money for Nothing. Told me all I needed to know.

[idwiyo]

25. I was kind of wondering why anyone would display "banned from KOS" as a personal badge of honor...

Unless one is proud of it of course for all the wrong reasons.

P.S. Thanks for the link to Alan Grayson's post, not sure how but I manged to miss it.

[sarcasmo]

17. Skank of America.

[fascisthunter]

21. Time for BoA to be taken down

[GiveMeFreedom]

23. As I always like to say ...

Fuck Bank of America!!

[idwiyo]

24. K&R

[scarletwoman]

26. k&r. (nt)