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Politics : Illyia's Heart on SI -- Ignore unavailable to you. Want to Upgrade?

To: illyia who wrote (7219)	10/19/2011 10:07:43 PM
From: illyia	Respond to of 7567

BoA Setback Regarding Bank of NY Yves Smith Naked Capitalism 10-19-11 Bank of America Setback: $8.5 Billion Mortgage Settlement Successfully Removed to Federal Court (Updated) Bank of America can’t win for losing. Readers may recall the Charlotte bank tried arranging a settlement for a troublingly wide range of liability issues with its securitization trustee, Bank of New York, purportedly on behalf of investors. This deal looked like a victory for BofA, since it covered virtually all of the old Countrywide securitizations. As we indicated the deal stank to high heaven, in part because Bank of New York itself has liability to investors on these very same trusts and BofA gave Bank of New York an expanded indemnification. That’s called a bribe, folks. And on top of that, Bank of New York is effectively the house RMBS trustee for BofA, so it isn’t surprising that Bank of New York might be a tad responsive to the wishes of a major, ongoing client. The deal is subject to a so-called Article 77 hearing, and a raft of parties objected, not just quite a few investors, but also the FDIC and the attorneys general of New York and Delaware. The hearing was due to take place before a New York judge (this was treated as a state law matter) who has proven to be very bank friendly in the past. One of the investor attorneys, David Grais, petitioned to have the case removed to Federal court. The drill is that the case is automatically removed, but the other side can and pretty much always does move to have the case returned to the original court. It is the judge in the new venue who hears the arguments and decides whether to keep the matter in his court or not. The Federal judge decided to keep the case. Per Reuters (hat tip Buzz Potamkin): Manhattan federal Judge William Pauley on Wednesday decided to keep a proposed $8.5 billion settlement over Bank of America Corp’s mortgage-backed securities in federal court, potentially lengthening the deal’s consummation…. “The settlement agreement at issue here implicates core federal interests in the integrity of nationally chartered banks and the vitality of national securities markets,” Pauley’s written order said in part. “Lengthening the deal’s consummation” is an awfully optimistic conclusion. Most experts not only expect any deal to take two to three years to get done, but the odds are high, given the number of objections, that the deal is likely to be reopened, which means at a minimum it will cost BofA more dough. When you renegotiate a deal, there is no assurance it will get done. Update. Whoa, the press report is even more misleading, in its terse fashion, than I realized. Get a load of the opening paragraph. The judge is not happy with the procedural move the parties to the settlement took. In particular, he stresses that Article 77 hearings (which set a very high bar for making objections) are exotic, and not appropriate for this sort of deal. He clear states that they are typically used only for “mere matters of administration” and pretty much have never been used post the 1960s. And if you read the filing, he is ALSO not at all pleased with how Bank of New York has operated to pretend it is acting on behalf of investors yet refusing to say who they are. It looks like he will take a hard look at the deal and see signs that the parties to the deal have not operated in good faith. Just look at how he characterizes Bank of New York’s conduct. For instance: “…fearing that the trusts’ claims against Countrywide and Bank of America would lapse as a result of Bank of New York’s torpor…” Wow. This does not look promising for BofA, and Bank of New York may deservedly take it in the chin for its past conduct. Scribd doc: Pauley Ruling on Keeping $8.5bn Settlement in Federal Court – 10-19-2011 nakedcapitalism.com

To: illyia who wrote (7219)	10/19/2011 10:23:35 PM
From: illyia	Respond to of 7567

Occupy Wall Street May Address Looting by Bank of America and Federal Reserve By George Washington Published on ZeroHedge ( http://www.zerohedge.com) Created 10/19/2011 - 18:53 [1] Submitted by George Washington [1] on 10/19/2011 18:53 -0400 Bank of America [2] Bank of America [3] Federal Deposit Insurance Corporation [4] Federal Reserve [5] Global Economy [6] Merrill [7] Merrill Lynch [8] Many people are furious that the Federal Reserve and Bank of America have initiated a coup to dump billions of dollars of losses on the American people [9] (and see this [10]). Many are suggesting that the “Occupy” protesters rally to stop this robbery. One of the top stories currently on Reddit (one of the top social media sites), is: OWS and 99%: Please pay attention to this and stop it from happening (BofA and Fed socializing losses) [11] I understand that the Occupy protesters are, in fact, currently debating making a statement on this theft. Currently, there are two competing draft statements. This one is from someone very savvy on understanding how the average American thinks: A portion of the 53 trillion dollars of derivatives (yes that’s with a t, about the size of the entire global economy) transferred to Bank of America’s parent company from Merrill Lynch in 2008 has recently been transferred to Bank of America. Derivatives contracts in a bank are paid before anyone else gets paid. Therefore, these derivatives contracts would be paid before depositors receive their money. These people just cut in front of you. It's very simple, the reason that banks and trading houses were originally separated was to prevent this sort of thing. What’s really going to happen is that the government is going to end up bailing out the FDIC … so this will end up being a government bailout. You’ll end up getting shafted, either by derivatives holders cutting in front of you or by your having to bail out the FDIC so it can bail out banks depositors. Either way, this is yet another instance of looting by the big banks and big government. Just say no … don’t let this stand. And this one is from two people who are experts on the technical issues involved: We denounce Bank of America’s transfer of high risk derivatives to its federally insured accounts. This is yet another example of systemically dangerous institutions, big banks like BofA and JPM, once again attempting to shift potentially substantial losses onto the backs of hardworking Americans. The fact that the Federal Reserve supports this action demonstrates Ben Bernanke’s complicity and/or gross incompetence in supporting the Wall Street elite at the expense of tax paying citizens. Updates as they develop … Similar Articles You Might Enjoy: Bank of America Bank of America Federal Deposit Insurance Corporation Federal Reserve Global Economy Merrill Merrill Lynch Source URL: http://www.zerohedge.com/contributed/occupy-wall-street-may-address-looting-bank-america-and-federal-reserve Links: [1] zerohedge.com [2] zerohedge.com [3] zerohedge.com [4] zerohedge.com [5] zerohedge.com [6] zerohedge.com [7] zerohedge.com [8] zerohedge.com [9] washingtonsblog.com [10] neweconomicperspectives.blogspot.com [11] reddit.com [12] twitter.com