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Non-Tech : Banks--- Betting on the recovery -- Ignore unavailable to you. Want to Upgrade?

To: Sr K who wrote (1222)	10/31/2010 1:48:54 AM
From: Hawkmoon	Respond to of 1428

Mauldin's primary source for this piece is Manal Mehta of the startup Analysis is analysis.. Facts are facts. I don't see anyone able to refute the Mehta's facts, or his contentions about BAC or the other TBTF banks and their mortgage bank acquisitions. The reality is that a huge fraud has been perpetrated upon the US financial system. I didn't see it at the time, nor did the majority of people. But in retrospect, given the legalities involved and how the banks and lawyers seemed to circumvent those laws with impunity, this was about a select group of bonus-seeking financial power elites robbing their banks and shareholders, as well as the taxpayer (through FDIC). It's become a HUGE transfer of wealth from investors, insurers, and taxpayers to a bunch of crooks asserting they were creating financial "innovation". The problem is that the "innovation" they've created consists of buying/selling insurance (through naked CDS) where they don't even have a financial interest in the underlying asset/debt. And then they buy/sell mortgages without the proper documentation, ignoring long established property law, then securitize the mortgage notes, effectively turning real estate into a speculative equity/stock market, and creating a "pump and dump". And then the taxpayers bail out these banks through TARP, and trillions in wasted national debt, thereby giving these banks a place to park their near-zero interest loans they borrow from the Fed, thereupon drawing nearly 2 1/4 percent pure profit, courtesy of the American taxpayer. All of this "shadow banking" is in violation of the established rule of law. And now, for all of this fake "innovation", the final beneficiaries are going to be the lawyers (and maybe a few mortgage borrowers who bought homes they couldn't afford in the first place). What I think we're going to see in coming months/years is the Fed placing a backstop on treasury sales by these TBTF banks so they can finance the put-backs on these mortgage backed securities. The Fed will buy their hoard of TARP/Stimulus financed T-bills, and then the TBTF banks will take that cash and buy back their bad MBS debt. This, I believe, is the reason that Bill Gross, of Pimco is apparently buying MBS. zerohedge.com The rule of law is going to be re-established in the financial system, I suspect unwillingly. And it's going to come at the expense of the TBTF banks played the most active role in creating this mess. However, I'll be curious to see how the regional banks fair, given that most of them didn't fall into this securitization scheme. Hawk