Friday, January 16, 2009

$20 billion more for Bank of America

$45 billion and counting from the TARP.

A backstop of $118 billion of assets!


Bank of America said it learned of Merrill's losses after the Dec. 5 shareholder vote. And in the days following, both Federal Reserve Chairman Ben Bernanke and Mr. Paulson impressed upon Mr. Lewis the importance of closing the transaction for the firm's own sake and also warned of the consequences for the country's overall financial system, say people familiar with the discussions.

Bullsh*t. Consequences for the country? Give me a break.

Bank of America spokesman James Mahoney said: "Beginning in the second week of December, and progressively over the remainder of the month, market conditions deteriorated substantially relative to market conditions prior to the Dec. 5 shareholder meetings. So Merrill wound up making adjustments for the quarter that were far greater than anticipated at the beginning of the month. These losses were driven by mark-to-market adjustments which were necessitated by changes in the credit markets, and those conditions change on a daily basis."

How about Merrill Lynch coming clean on Level 3 assets, and BAC acknowledging the problems it has in commercial real estate loans!

At one point in December, Mr. Lewis even sent lawyers to New York to find out whether Merrill's situation amounted to a material-adverse situation that might allow the bank to cancel the deal, according to a person familiar with the situation.

You need a lawyer to tell you if a $20-$35 billion overstatement of assets is a MAC? Only in banking is $35 billion not considered fraud, but "judgement." Now the previously "safe" annual dividend of BAC of $2.56, which was halved to $1.28, gets cut to $.04. I guess I was wrong. Yesterday morning I said BAC would cut it to a nickel! I missed the penny for your thoughts!

Mr. Thain often stressed the losses were from so-called legacy positions and not new ones taken on by Mr. Montag, according to these people. Total Merrill losses could total in excess of $10 billion, say people familiar with the matter.

Why then the $20 billion, and why then the backstop of $120 billion of assets? Merrill got $10 billion from the TARP. Did Ken Lewis not figure what everyone else already knew, that Merrill Lynch was insolvent, and so was he?

The Treasury rescue deal could be announced alongside the bank's earnings, which have been moved up to a Friday release.

The bank's earnings? What earnings? These banks have nothing but losses, and nothing but taxpayer money, and all along they say they don't need TARP money!

The bottom line on this is simple. This deal was put together by the Fed, and the people at the Fed will tell any lie, and tell any story, and steal any amount of money, to keep the bankers in charge who have shown that they are incompetent. When will this system be purged of these financial thieves?

Everyone says that Paulson ripped off the taxpayer. Let's look at his replacement's track record. Timothy Geithner, the new Treasury Secretary appointee, who previously said Lehman was a sound institution before it failed, judging by recent events, appears to be just another common thief. He supposedly made an "innocent mistake" by not paying his taxes. Maybe he's just an innocent idiot! He paid the taxes due for the two years that he was audited, but he didn't pay the taxes owed for the previous two years because he felt he could get away with it. Why else did he do his own taxes the years that he cheated? A few years later, he gets a letter from an accountant, who supposedly looked over his taxes that he self filed previosuly, and the accountant said he didn't need to pay them. The letter, ostensibly, of which Geithner uses for his defense, is written after the statue of limitations has expired for payment of taxes. Thus it's a true statement, but a misleading statement, which any lawyer will tell you, is constitutionally protected. Which then begs the question-Why did he pay the taxes? (Was his accountant Charlie Rangel's accountant also?) Geithner paid the two previous years of taxes and penalties, because that was the cost of admission to be Treasury Secretary, and then he could make it appear that it was an "innocent" mistake.

Does anybody see any similarity with Geithner and how these banks operate? Why else is it so necessary for him to be in the club? Someone could come to the conclusion that Geithner, like Secretary Paulson before him, like Ken Lewis, and John Thain before him, like Robert Steele and Ken Thompson before him, like Benjamin Bernanke, like Kerry Killinger, like Bob Rubin, like Dick Fuld and Erin Callan, like Martin Sullivan, are just common thieves or thugs, except they don't steal with a gun. These thieves steal with deception, and then say it is unpalatable, but necessary, and then applaud themselves for their bravado, ingenuity and sense of entitlement.

Meanwhile they save their sinking franchises that they sunk, with your money, so they can keep taking their obscene salaries, while the trusting shareholders equity and dividends of these companies get wiped out.

This madness of elitism has become so institutionalized, that they can actually look at themselves in the mirror, and say that they are doing this for the good of the masses, even though there is not a shred of a refraction of a reflection to an illusory illusion of capitalism.

Bernie Madoff, loses or steals $30-$50 billion of of investors money, and he wears a bullet proof vest when he goes out to the courthouse.

These charlatans lose close to a trillion dollars of shareholders wealth and they wear a smile.


Anonymous said...

Bottomline the Bank of America was forced to buy Merrill.

Palmoni said...

It was, and we all know that. I just hate the idea that they pretended it wasn't a shotgun marriage made in Fed heaven!