I said yesterday that, after Dear Leader's minions, including and starting with Little Timmy Geithner, along New York Fed members and others, have spent months attacking N.Y. Attorney General Eric Schneiderman, color me skeptical at least, and cynical at most, that any talk of a federal lawsuit against banksters for their alphabet soup diarrhea of CDOs, CDSs, etc., is anything more than a hill of diarrhea-inducing beans.
The suit's been filed. So, let's update this from yesterday Adding to my skepticism? It names no dollar amount for damages sought. (Fannie Mae and Freddie Mac reportedly lost $196 billoin on the alphabet soup crap.) So, let's look more at the reality of why this is probably a dog-and-pony show.
Here's how this will likely play out.
1. Team Obama goes through motions of filing suit.
2. Goddam Sachs, Citigroup, Morgan Stanley et al plead remorse. (Like AT&T pleading to "tweak" the T-Mobile takeover.)
3. Said banksters eventually agree to a settlement. (This is part of "doing God's work," of course. Loyd Blankfein will combine this with the "remorse" part for Goddam Sachs.)
4. Money for said settlement will pennies on the dollar, payable over a decade or more. Updated with the new link, 10 percent of this is about $20 billion. And, not coincidentally, that's what Team Obama suggested in initial settlement talks. Even prorated by company size among the 17 defendants, that's, say, $3 billion for Bank of America. BofA had that much profit in one quarter in 2010. Even if I temper my cynicism somewhat, and call it 20 percent on the settlement, payable over three years, that's $6 bil for BofA over three years, or $500M a year. It will be able to digest that, write it down on earnings statements, and possible even find a way to a tax deduction or two.
5. Said money is then used by Team Obama to create a successor to HARP and HAMP called HEMP: "Home Equity Maintenance Program." God, I love being snarky.
6. Said program is started, oh, say, July 2012? Just in time for the Democratic National Convention and some appropriate re-election PR?
6A. Said program, said start of payments, said percentage markdown of payments, etc., all get connected in some way to Democratic campaign contributions.
7. Team Obama tells Schneiderman: "We really, really tried. This is the best we can do. Now, for the last time, stop bothering the banksters."
Showing posts with label Bank of America. Show all posts
Showing posts with label Bank of America. Show all posts
September 02, 2011
February 25, 2011
Banksters fess up to illegal mortgage problems
Wells Fargo, Bank of America and Citigroup, as part of annual financial filings with the SEC, admitted that state attorneys general investigations (and a lame-o one by the feds so far) into their, well, illegal use of MERS software in mortgage paperwork filings could well be a financial deadweight and not just a perception issue.
More seriously, here's my tentative grand bargain:
1. State AGs as a group, agree to suspend investigations, both on the illegal use of MERS, and on banks wrongfully repo-ing deliquent-mortgage homes to which they don't have clear title in particular, for 18 months.
2. In exchange, without admitting guilt for past use, the banks agree that MERS, by not providing actual paperwork to county clerks, is illegal in all such states with such a requirement, and stop using it ASAP. (I'm assuming they're still using it, in the middle of this mess.)
3. Banks agree to triple their current mortgage-modification programs.
4. Banks agree to reveal what "minimum," as percentage of mortgage principle, they currently have as a cutoff rate for walkaway deals and other mortgage modifications, and to lower that minimum by 10 percentage points.
That's just some back-of-the-napkin figuring. I'm guessing that, given this was part of an SEC filing, that doing all of that would still hit the bottom line no harder than would state financial penalties, should the banksters dig in their heels.
“The current environment of heightened regulatory scrutiny has the potential to subject the corporation to inquiries or investigations that could significantly adversely affect its reputation,” Bank of America said in the filing.Well, boo-hoo. Dr. America prescribes 30CCs of "cramdown" for the sick bankster patients.
The state and federal inquiries “could result in material fines, penalties, equitable remedies (including requiring default servicing or other process changes), or other enforcement actions, and result in significant legal costs,” Bank of America said.
Wells Fargo said in its filing that it was “likely that one or more of the government agencies will initiate some type of enforcement action,” including possible “civil money penalties.”
More seriously, here's my tentative grand bargain:
1. State AGs as a group, agree to suspend investigations, both on the illegal use of MERS, and on banks wrongfully repo-ing deliquent-mortgage homes to which they don't have clear title in particular, for 18 months.
2. In exchange, without admitting guilt for past use, the banks agree that MERS, by not providing actual paperwork to county clerks, is illegal in all such states with such a requirement, and stop using it ASAP. (I'm assuming they're still using it, in the middle of this mess.)
3. Banks agree to triple their current mortgage-modification programs.
4. Banks agree to reveal what "minimum," as percentage of mortgage principle, they currently have as a cutoff rate for walkaway deals and other mortgage modifications, and to lower that minimum by 10 percentage points.
That's just some back-of-the-napkin figuring. I'm guessing that, given this was part of an SEC filing, that doing all of that would still hit the bottom line no harder than would state financial penalties, should the banksters dig in their heels.
January 23, 2010
Old media + big banks = stupidity squared
Looks like old Dean-o Singleton won't have much ownership anymore in Media News, though Bank of America is going to still let him run the company. (Thereby showing that the stupidity of big banks and that of big Old Media folks is probably about equal in the past five years.)
From the AP:
By MICHAEL LIEDTKE
AP Business Writer
SAN FRANCISCO (AP) — Another newspaper publisher desperate to dump debt has filed for bankruptcy protection in hopes of recovering from an advertising meltdown that has obliterated much of the print media’s revenue.
Friday’s late filing by Affiliated Media Inc., the holding company of MediaNews Group, had been expected. The owner of 54 U.S. daily newspapers said Jan. 15 that it would seek to reorganize its finances in bankruptcy court.
MediaNews, based in Denver, says its newspapers, which include The Denver Post and the San Jose Mercury News, and 8,700 employees won’t be affected during the bankruptcy proceedings. The company also owns four radio stations in Texas and a television station in Alaska.
Privately held Affiliated Media worked with its major lenders and shareholders during the past year to hammer out a plan aimed at shortening the company’s stay in federal bankruptcy court in Delaware. Affiliated hopes to emerge from bankruptcy protection within two months.
The plan calls for Affiliated’s debt to fall to $179 million from $930 million, according documents filed late Friday and early Saturday.
In exchange for this $751 million concession, a group of lenders led by Bank of America will become the company’s majority owners with 89 percent of the common stock, according to a disclosure statement filed Saturday. The remaining 11 percent goes to MediaNews’ management team, which is led by William Dean Singleton, who is also chairman of The Associated Press. The MediaNews executives will receive warrants that eventually could boost their combined stakes to 20 percent.
Heading into the bankruptcy filing, Singleton held a roughly 30 percent stake in Affiliated.
Richard Scudder, who co-founded MediaNews with Singleton in 1985, will relinquish his interests in the company to the lenders. Another major newspaper publisher, Hearst Corp., also will surrender a 30 percent stake it acquired in Affiliated’s newspapers outside the San Francisco Bay area as part of a complex $317 million deal in 2006.
Singleton will continue to run MediaNews, signaling the lenders remain confident in him despite the company’s recent struggles.
The decision probably stems from Singleton’s reputation as a hard-nosed businessman who has never shied away from cutting costs, said Alan Mutter, a former newspaper editor who blogs on the media business.
"Who do we know who can go in and run the hell out of a newspaper and make a buck?" he said. "The only answer is William Dean Singleton."
MediaNews spokesman Seth Faison declined to comment late Friday.
"By aggressively facing the challenges of the newspaper business, we will continue to deliver high-quality journalism and will prepare our newspapers for a promising future," Singleton said in a statement Friday.
Affiliated’s annual revenue has fallen by $270 million, or 20 percent, during the past two fiscal years, according to court documents.
To cushion the financial blow, Singleton has reduced Affiliated’s expenses by $385 million, or 31 percent, since the end of 2006, according to court documents.
Affiliated still lost $582 million as revenue fell 10 percent to $1.06 billion in its last fiscal year ending June 30, the documents show. That came on top of a $406 million loss in the previous fiscal year. The losses stemmed from accounting charges taken to reflect the crumbling value of its newspapers.
Despite Affiliated’s troubles, Singleton says all but one of the company’s newspapers are profitable. He hasn’t identified which one is losing money.
But Singleton couldn’t figure out a way to cope with all the debt that MediaNews took on to expand into new markets. Like other publishers, Singleton borrowed heavily before the Internet and recent recession began to devour the newspaper’s main source of income — advertising.
Affiliated is bracing for more tight times ahead. In a disclosure statement, the company discusses possible savings from farming out some production, newsroom and administrative jobs and imposing permanent wage cuts at some newspapers beginning this year.
The reorganization plan calls for Singleton to receive a $634,000 salary and an annual bonus of up to $500,000 as Affiliated’s chief executive. He will also continue to be paid $360,000 annually under a separate agreement with The Denver Post Corp., according to court documents.
From the AP:
By MICHAEL LIEDTKE
AP Business Writer
SAN FRANCISCO (AP) — Another newspaper publisher desperate to dump debt has filed for bankruptcy protection in hopes of recovering from an advertising meltdown that has obliterated much of the print media’s revenue.
Friday’s late filing by Affiliated Media Inc., the holding company of MediaNews Group, had been expected. The owner of 54 U.S. daily newspapers said Jan. 15 that it would seek to reorganize its finances in bankruptcy court.
MediaNews, based in Denver, says its newspapers, which include The Denver Post and the San Jose Mercury News, and 8,700 employees won’t be affected during the bankruptcy proceedings. The company also owns four radio stations in Texas and a television station in Alaska.
Privately held Affiliated Media worked with its major lenders and shareholders during the past year to hammer out a plan aimed at shortening the company’s stay in federal bankruptcy court in Delaware. Affiliated hopes to emerge from bankruptcy protection within two months.
The plan calls for Affiliated’s debt to fall to $179 million from $930 million, according documents filed late Friday and early Saturday.
In exchange for this $751 million concession, a group of lenders led by Bank of America will become the company’s majority owners with 89 percent of the common stock, according to a disclosure statement filed Saturday. The remaining 11 percent goes to MediaNews’ management team, which is led by William Dean Singleton, who is also chairman of The Associated Press. The MediaNews executives will receive warrants that eventually could boost their combined stakes to 20 percent.
Heading into the bankruptcy filing, Singleton held a roughly 30 percent stake in Affiliated.
Richard Scudder, who co-founded MediaNews with Singleton in 1985, will relinquish his interests in the company to the lenders. Another major newspaper publisher, Hearst Corp., also will surrender a 30 percent stake it acquired in Affiliated’s newspapers outside the San Francisco Bay area as part of a complex $317 million deal in 2006.
Singleton will continue to run MediaNews, signaling the lenders remain confident in him despite the company’s recent struggles.
The decision probably stems from Singleton’s reputation as a hard-nosed businessman who has never shied away from cutting costs, said Alan Mutter, a former newspaper editor who blogs on the media business.
"Who do we know who can go in and run the hell out of a newspaper and make a buck?" he said. "The only answer is William Dean Singleton."
MediaNews spokesman Seth Faison declined to comment late Friday.
"By aggressively facing the challenges of the newspaper business, we will continue to deliver high-quality journalism and will prepare our newspapers for a promising future," Singleton said in a statement Friday.
Affiliated’s annual revenue has fallen by $270 million, or 20 percent, during the past two fiscal years, according to court documents.
To cushion the financial blow, Singleton has reduced Affiliated’s expenses by $385 million, or 31 percent, since the end of 2006, according to court documents.
Affiliated still lost $582 million as revenue fell 10 percent to $1.06 billion in its last fiscal year ending June 30, the documents show. That came on top of a $406 million loss in the previous fiscal year. The losses stemmed from accounting charges taken to reflect the crumbling value of its newspapers.
Despite Affiliated’s troubles, Singleton says all but one of the company’s newspapers are profitable. He hasn’t identified which one is losing money.
But Singleton couldn’t figure out a way to cope with all the debt that MediaNews took on to expand into new markets. Like other publishers, Singleton borrowed heavily before the Internet and recent recession began to devour the newspaper’s main source of income — advertising.
Affiliated is bracing for more tight times ahead. In a disclosure statement, the company discusses possible savings from farming out some production, newsroom and administrative jobs and imposing permanent wage cuts at some newspapers beginning this year.
The reorganization plan calls for Singleton to receive a $634,000 salary and an annual bonus of up to $500,000 as Affiliated’s chief executive. He will also continue to be paid $360,000 annually under a separate agreement with The Denver Post Corp., according to court documents.
October 16, 2009
No soup for you, Ken Lewis!
Nor will the retiring Bank of America CEO get a big bonus. U.S. Treasury “bonus czar” Kenneth Feinberg pushed Lewis into giving it back.
And why should he get any bonus?
Even with profits from the former Merrill Lynch half of the company, B of A still lost more than $2 billion, in just the just-past third quarter! At 21 cents a share of loss, that was a full five cents more than analysts had expected.
And why should he get any bonus?
Even with profits from the former Merrill Lynch half of the company, B of A still lost more than $2 billion, in just the just-past third quarter! At 21 cents a share of loss, that was a full five cents more than analysts had expected.
September 14, 2009
Wall Street exec pay to go on trial
And, good! A federal judge has rejected a deal between the Securities and Exchange Commission and Bank of America. NY State Attorney General Andrew Cuomo is already lining up state-level charges.
He also called the deal “not remotely fair.”
Or half a dozen scalps. I love it!
And, I’m glad a judge got, in essence, mad as hell to force this.
Now, let’s see what comment the Obama Administration SEC, or Department of Justice, has tomorrow.
U.S. District Judge Jed Rakoff, in his ruling, found that the settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."
He also called the deal “not remotely fair.”
"I've never seen this," said James Cox, a Duke University law professor and securities law expert. "To me, it's long overdue," he added. "It's truly a come-to-Jesus moment for Bank of America and its relationship with its various officers," Duke Cox said. "They need to hang up a scalp or two."
Or half a dozen scalps. I love it!
And, I’m glad a judge got, in essence, mad as hell to force this.
Now, let’s see what comment the Obama Administration SEC, or Department of Justice, has tomorrow.
March 10, 2009
Read BofA CEO Ken Lewis’ lips not his bank wallet
The Bank of America CEO, in denying there’s a bunch of bad banks in a bylined WSJ column, would prefer you do NOT read an actual news story about the financial status of his bank.
McClatchy reports that B of A, along with Citibank, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase, has a current potential loss exposure to derivatives of nearly $600 billion.
Now, that’s potential, not actual.
But that figure jumped nearly 50 percent in 90 days.
AND, worse yet for Mr. Lewis, it DOESN’T include the corpse-like Merrill Lynch “assets” that B of A bought.
Do read that an actual news story, though. It’s an eye-opener.
McClatchy reports that B of A, along with Citibank, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase, has a current potential loss exposure to derivatives of nearly $600 billion.
Now, that’s potential, not actual.
But that figure jumped nearly 50 percent in 90 days.
AND, worse yet for Mr. Lewis, it DOESN’T include the corpse-like Merrill Lynch “assets” that B of A bought.
Do read that an actual news story, though. It’s an eye-opener.
November 08, 2008
What’s in Wells Fargo’s wallet?
More than 10 percent of U.S. banking assets, violating Federal regulations. You know BushCo will do nothing about WF, JPMorgan Chase and Bank of America.
Joe Stiglitz (and, why isn’t he getting mentions for Treasury, OMB or CEA?) says banking consolidation is “a very serious problem.”
But, what about an Obama Administration? Will it do more than Bush?
And, will it address other concerns raised in the story about the dysfunctionality level of much modern American banking?
Given that Obama’s top choices for Treasury are anti-regulatory neolibs, likely answer is nothing.
Joe Stiglitz (and, why isn’t he getting mentions for Treasury, OMB or CEA?) says banking consolidation is “a very serious problem.”
But, what about an Obama Administration? Will it do more than Bush?
And, will it address other concerns raised in the story about the dysfunctionality level of much modern American banking?
Given that Obama’s top choices for Treasury are anti-regulatory neolibs, likely answer is nothing.
October 07, 2008
Bank of America — glass half full or half empty?
Half full — it’s launched an innovative new program to help homeowners with iffy loans.
Half empty — it has to slash its dividend and sell stock to raise cash.
As for PR, I would say half empty. The program will put but a small dent in the mountain of badly-written loans gone bad.
Half empty — it has to slash its dividend and sell stock to raise cash.
As for PR, I would say half empty. The program will put but a small dent in the mountain of badly-written loans gone bad.
September 15, 2008
BofA rebuffed Lehman — for Merrill Lynch
After dropping out of the race to buy Lehman Brothers Sunday afternoon, Bank of America switched to Merrill Lynch , acquiring the financial giant to the tune of $44 billion, or $29 a share.
The price is well above where Merrill was trading recently.
Merrill is a winner, or Merrill shareholders are.
In the long term, BofA shareholders may be, but, with the amount of debt and purchases the company has made recently, I don’t know about the short term.
The takeover comes on the heels of buying Countrywide earlier this year.
And, it’s not the first time BofA has acted swiftly. As the story notes, it bought MBNA (the card company, not the senator and Veep candidate) in 2005 on a week’s notice.
Finally, is it good for the consumer? Or the country as a whole?
Well, BofA is going to give you a vomitorium Yes answer to that, touting mortgages, investment banking, commercial banking and more all under one roof.
I’m not so sure about agglomeration of this size. What if some CEO of the future, in some future subprime mortgage-type bubble, overextended an institution of this size?
The price is well above where Merrill was trading recently.
Merrill is a winner, or Merrill shareholders are.
In the long term, BofA shareholders may be, but, with the amount of debt and purchases the company has made recently, I don’t know about the short term.
The takeover comes on the heels of buying Countrywide earlier this year.
And, it’s not the first time BofA has acted swiftly. As the story notes, it bought MBNA (the card company, not the senator and Veep candidate) in 2005 on a week’s notice.
Finally, is it good for the consumer? Or the country as a whole?
Well, BofA is going to give you a vomitorium Yes answer to that, touting mortgages, investment banking, commercial banking and more all under one roof.
I’m not so sure about agglomeration of this size. What if some CEO of the future, in some future subprime mortgage-type bubble, overextended an institution of this size?
May 08, 2008
Countrywide sinking into sunset crapper as housing woes continue
A day after its second-quarter bad news came out, D.R. Horton couldn’t escape the Street, off 6.6 percent. Pulte was off nearly 6 percent.
But here’s the biggie: Countrywide Financial shares were down 7.5 percent to $4.94 today as speculation grew that its merger with Bank of America will crash or be renegotiated. Here’s why:
I think S&P, the second-biggest financial rating company after Moody’s and itself responsible for some of this crap, is being too optimistic. And I’m not alone:
But here’s the biggie: Countrywide Financial shares were down 7.5 percent to $4.94 today as speculation grew that its merger with Bank of America will crash or be renegotiated. Here’s why:
Standard & Poor's equity analysts wrote today that they believe Bank of America “will renegotiate a lower price due to large losses in CFC’s loan portfolio.” They value the shares at $6, on the expectations that the deal will be reworked.
Bank of America’s recent regulatory filing intimating that the company may not guarantee Countrywide’s debt has also increased the cost of default insurance.
I think S&P, the second-biggest financial rating company after Moody’s and itself responsible for some of this crap, is being too optimistic. And I’m not alone:
Earlier this week, Paul Miller, an analyst at FBR Capital Markets, wrote that Bank of America could slash its offer from roughly $7.25 a share to $2 or less.
Countrywide’s $95 billion loan portfolio has “deteriorated so rapidly” this year, Miller said, that buying the company could dent Bank of America's earnings or force the banking giant to raise additional capital.
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