Team Obama suing #banksters on #CDO and #CDS - more on why this is likely 'show'

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."

Will shareholders turn on 'too big to fail' banks?

At least, will they turn on the ones that put salaries above profits?

Seriously, how can the stock price of a Citigroup or Morgan Stanley be above 10 cents a share right now?

Morgan Stanley, learning nothing, tries to sell sh*t as AAA again

And, if it gets away with this piece of crap, look for yet another financial bubble to start. It’s no wonder Morgan Stanley folks refused to comment to Bloomberg.

Fed — ‘eff you’ to more regulation in Immunity 2.0? Goldman, Morgan now ‘banks’

Goldman Sachs and Morgan Stanley will become full-blown bank holding companies. As the blog notes, this is the last nail in the coffin, the final end to the Glass-Steagall Act.

And, why is that important?

It likely lays the groundwork for additional deal making. Given the expected bank failures this year, it is possible Goldman and Morgan Stanley could seek to buy them cheaply in a “roll-up” strategy.

Prior to the move, federal regulations prohibited the two investment banks from pursuing such deals. Indeed, Morgan Stanley’s recent talks with Wachovia revolved around Wachovia buying Morgan Stanley.

So, in essence, rather than being open to the idea of more regulation as part of the Paulson-Bernanke bailout, the Fed side, at least, seems to be saying eff you to that idea.

True, the two new banks themselves will theoretically be open to more regulation, but it seems possibly this is a way to dodge scrutiny at the same time?

Also, before this move, Stanley tried to get Chinese sovereign wealth fund backing, but could not pull it off.

So, the Chinese say our economy sucks; do Chinese wealth funds, at the same time, have any U.S. holdings they want Crazy Uncle Henry Paulson to bail out?

The xenophobia vs Wall Street would be fun for schadenfreude values, if nothing else.