Bigger Than Watergate!? Bank of America and Government Scandal

Posted by 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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Rick Santelli (CNBC) Rips Colleague a New One

Posted by on May 5, 2009 · 2 Comments 

Would you lie for the greater good or would you tell the truth and be honest about the way you conducts business.  I think that these moral hazards and cover ups are what got us into this economic crisis among other outside factors.  So what would covering up something else really help?  If the data is bad why continue to cover it up and prolong the inevitable?

I know that prolonging the inevitable is favored on Capitol Hill these days, but in my opinion that just makes things worse, suckers more people into the failing financial market, and makes for a worse collapse.  Let it go and give us the real facts!

Rick Santelli calls out one of his colleagues at CNBC who offers up the question as to whether or not the media should cover up the truth behind what’s going on in the financial sector for the greater good.

But, as I stated above, is that really for the greater good or is it just for the good of a political agenda and money in the media’s pocket? After knowing what recently occurred at an NBC meeting with Zucker and Immelt exclaiming that CNBC has been too harsh on the President and has criticized his policies too much recently… I can only take what they say at CNBC with a grain of salt because there may be a conflict of interest; like saving their jobs:

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