Posted by CrabbyCon on July 2, 2009 · 2 Comments
What a surprise! Bank of America, now owned mostly by taxpayers will be accepting California’s IOUs.
California, one of the most solvent states is of course good for their debts/sarc.
This really should have been expected – a state-run bank accepting an insolvent, soon-to-be-bailed-out-state. Seems like monopoly money to me! This is similar to a false economy, where government interference and regulation make free markets anything but FREE/REAL.
Ponzi scheme has become my favorite catch phrase. It effectively seems as though California is issuing it’s own fake currency called IOUs, although it is already insolvent, to pay back at a later date – of which, will never happen. Bank of America is already suffering and got into trouble the last time it bought a toxic company and toxic assets, as did many others – but here it is doing the same thing again. Insanity = Doing the same thing over and over again, expecting different results.
Bank of America Corp. says it will accept warrants issued by California’s state government through July 10.
BofA says the state’s budget crisis prompted its decision.
“To support our customers, while giving the state legislature additional time to pass a budget, we will accept California state-registered warrants — or IOUs — from existing customers and clients,” Charlotte-based BofA (NYSE:BAC) says in a written statement.
It is always important to ask “Why” in these very odd and overwhelming times.
Why would Bank of America, who is already in financial trouble and dire straights, accept California IOUs, which it will probably never see? Why does this seem incredibly like the forced situation of Merrill Lynch? Is Bank of America doing this as a favor to the US government? Should I assume that Bank of America will get more bailout dollars if it accepts such a risky investment?
My biggest “beef” with this scenario: who is supporting Bank of America? The government! And where does the government get its money? The taxpayers! It’s not ok by me, that my money is being used to help bailout California due to its liberal/progressive policies that it enacted on the state.
“It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.” ~ Frédéric Bastiat 1801-1850 “The Law”
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Filed under Bailouts, Constitution, Corruption, Double Standards, Economy, Obama, Obama Administration, State Issues, TEa Parties, Treasury, Wall Street · Tagged with Bailouts, Bank of America, California, Corruption, Double Standards, Economy, Fed, IOUs, Obama, Obama Administration, Ponzi Scheme, Treasury, Wall Street
Posted by CrabbyCon on May 6, 2009 · Leave a Comment
I don’t know what to make of this but it seems like a pretty big deal. Will it be pushed under the rug or become a thorn in the side of those involved? You be the judge.
Whether the story is bigger than Watergate or not, it is definitely a scandal of huge proportions.
To sum it up, on April 23, 2009, New York Attorney General Andrew Cuomo sent a letter to Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs Chris Dodd; Chairman of the House Financial Services Committee Barney Frank; SEC Chairwoman Mary Schapiro; and Chairwoman of the Congressional Oversight Panel Elizabeth Warren.
The letter outlined how former Treasury Secretary Paulson and Fed Chairman Ben Bernanke forced Bank of America’s acquisition of Merrill Lynch – even though Bank of America CEO Ken Lewis and the board of directors tried to pull the plug on the deal after it turned out that Merrill Lynch was far deeper in debt than it had admitted.
In the words of Attorney General Cuomo himself:
Immediately after learning on December 14, 2008 of what Lewis described as the “staggering amount of deterioration” at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event (“MAC”) occurred. After a series of internal consultations and consultations with counsel, on December 17, 2008, Lewis informed then-Treasury Secretary Henry Paulson that Bank of America was seriously considering invoking the MAC clause. Paulson asked Lewis to come to Washington that evening to discuss the matter.
Bank of America’s attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced.
Meanwhile Ken Lewis has been sacked as chairman of the board at Bank of America… even though he might well have been the only conscientious and honest player in this scheme. And now the sharks have started to turn on each other: according to Cuomo, Paulson “largely corroborated Lewis’s account” and informed the attorney general’s office that he “made the threat at the request of Chairman Bernanke.” The latter has so far chosen to keep his mouth shut.
The key factor here is not that the Devious Duo forced Bank of America into a merger it didn’t want to commit to. Granted, that’s an unheard-of interference of government in the free market, but we’re quite sure that the Powers-That-Be could sweep it under the rug by invoking the “greater good.”
No, the part of the story that could really break ‘Al’ Paulson and ‘Don’ Bernanke’s necks is the failure to inform the Securities and Exchange Commission, as well as Bank of America’s shareholders, of the extent of toxic waste Bank of America was forced to accept. That’s fraud, pure and simple.
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Filed under Bailouts, Congress, Corruption, Economy, Media, Politicians, Treasury, Wall Street · Tagged with Andrew Cuomo, Bailouts, Bank of America, Barney Frank, Bernake, Chris Dodd, Corruption, Democrats, Economy, Elizabeth Warren, Mary Schapiro, Media, Merrill Lynch, Paulson, Scandal, Toxic Assets, Treasury
