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Big Enough to Fail… Bank of America

It appears the rats are jumping the Bank of America ship…

The next real serious challenge for the Obama Administration is going to be dealing with the banks. The foreclosure crisis is just the tip of  a very deep iceberg. While BOA has paid back the TARP funds, it appears they didn’t use a penny of the money to get the rats and thugs out of their operations…

I believe the only way to do that is criminal investigation and prosecution.

Bank of America Edges Closer to Tipping Point: Jonathan Weil

It was only last April that Bank of America Corp. was making fools out of the doomsayers who had called for its nationalization a year earlier. Taxpayers had gotten their bailout cash back. Investors who bought its shares at the bottom were making a killing. Government leaders lauded the company’s rescues, both of them, as a great success.

Now the bank may be on the verge of trouble again. Its stock has fallen 41 percent since April 15. Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorneyDamon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout.

A few more months like the last one, and we may be wishing Bank of America had never returned its $45 billion of TARP money.

You wouldn’t know there’s anything wrong with Bank of America by an initial look at itsbalance sheet. The company showed common shareholder equity, or book value, of $212.4 billion as of Sept. 30. And its regulatory capital ratios have risen steadily throughout the year.

Tipping Point

Judging by its shrinking stock price, though, investors are acting as if Bank of America is near a tipping point. Its market capitalization stands at $115.6 billion, or 54 percent of book value. That’s the second-lowest price-to-book ratio among the 24 companies in the KBW Bank Index, and well below the 76 percent ratio the company was at in October 2008 when it landed its first round of TARP dough. Put another way, the market is saying there’s a $96.8 billion hole in Bank of America’s balance sheet.

When I asked Jerry Dubrowski, a Bank of America spokesman, about the disparity, he said: “I’m not going to comment on the book value and the stock price.”

It may be the shares are a bargain at $11.52, if the company’s books are right. Another plausible scenario is that Bank of America’s management, led by Chief Executive Officer Brian Moynihan, has lost so much credibility with investors that the stock’s decline might start feeding on itself.

The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet is that it’s largely impenetrable. Some portions, though, are so delusional that they invite laughter. Consider, for instance, the way the company continues to account for its acquisition of Countrywide Financial, the disastrous subprime lender at the center of the housing bust, which it bought for $4.2 billion in July 2008.

 

 
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Posted by on November 8, 2010 in News

 

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It Used to Be the Bad Guys Robbed Wells Fargo

On July 21, 1873, Jesse James and the James-Younger Gang robbed their first train in Adair, Iowa, of all places. They managed to derail the Rock Island train, turning the train on its side, killing the engineer and injuring a lot of its passengers. But that wasn’t enough terror for the passengers - the James-Younger Gang, clad in Ku Klux Klan garb, went up and down the length of the overturned train confronting them and demanding their watches and valuables (although some reports say they stole only from the men). They threw it all in bags along with the money from the train’s safe and ended up getting about $3,000.

On July 21, 1873, Jesse James and the James-Younger Gang robbed their first train in Adair, Iowa, of all places. They managed to derail the Rock Island train, turning the train on its side, killing the engineer and injuring a lot of its passengers. But that wasn’t enough terror for the passengers - the James-Younger Gang, clad in Ku Klux Klan garb, went up and down the length of the overturned train confronting them and demanding their watches and valuables (although some reports say they stole only from the men). They threw it all in bags along with the money from the train’s safe and ended up getting about $3,000.

How things changed during the Bushit Hold-up!

Illinois Sues Wells Fargo for Biased Lending

Wells Fargo targeted African-Americans and Latinos for risky, subprime mortgage loans with “reverse redlining” practices, Illinois Attorney General Lisa Madigan says in Cook County Court. The 62-page complaint accuses the bank of a litany of biased and fraudulent practices during the “heyday” of subprime lending.

Madigan says Wells Fargo charged blacks and Latinos much more for mortgages than white borrowers with the same income – and even with lower incomes.

Madigan cites a 2007 story from the “Chicago Reporter” that reported 34 percent of African-American borrowers who earned more than $120,000 received high-cost loans from Wells Fargo, compared to only 22 percent of white borrowers who earned less than $40,000. Read the rest of this entry »

 
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Posted by on August 6, 2009 in American Genocide, The New Jim Crow

 

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Obama Places Another Brick In Rebuilding America

Brick Wall - Fabio Gramazio and Matthias Kohler of ETH Zurich, who used real brick for an installation at the Venice Biennale

Brick Wall - Fabio Gramazio and Matthias Kohler of ETH Zurich, who used real brick for an installation at the Venice Biennale

Following the course of the Obama Administration for conservatives must be like picturing running beside a brick wall. Just when they think they are going straight…

They smack into a brick wall like the one above.

President Obama wants to create a new consumer financial protection agency to protect consumers from the massive fraud and abuse that has brought our economy low.

Read the rest of this entry »

 
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Posted by on June 16, 2009 in The Post-Racial Life

 

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