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Donít Blink, or Youíll Miss Another Bailout
New York Times ^ | 16 February 2013 | Gretchen Morgenson

Posted on 02/17/2013 7:31:33 PM PST by Lorianne

MANY people became rightfully upset about bailouts given to big banks during the mortgage crisis. But it turns out that they are still going on, if more quietly, through the back door.

The existence of one such secret deal, struck in July between the Federal Reserve Bank of New York and Bank of America, came to light just last week in court filings.

That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.

Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.

Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Government; US: New York

1 posted on 02/17/2013 7:31:42 PM PST by Lorianne
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To: Lorianne

I remember Obama or someone wanting these bailouts to be automatic, or am I getting that wrong?

2 posted on 02/17/2013 7:33:37 PM PST by GeronL (
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To: Lorianne
This is unbelievable. Or maybe it isn't.

Didn't Warren Buffet invest a sizeable amount into BofA way back when? If memory serves, the stock was at $8.00, or thereabouts.

Grandpa Warren just happens to be a major player in the NWO/’gen21 takedown of the middle class of the U.S., along with other traitors such as Bill/Melinda Gates.

I think this is simply quid pro quo, or your garden variety crony capitalism.

I could well be wrong, Lorianne, but that's my initial impression here.

3 posted on 02/17/2013 7:53:41 PM PST by MichaelCorleone (A return to Jesus and prayer in the schools is the only way.)
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To: Lorianne
To anyone interested in holding banks accountable for mortgage improprieties, the Fed’s actions are bewildering

Why is it bewildering? The FED is the Daddy of the money-center banks and primary dealers. Its main responsibility is to them.

As a side note, conservatives will never make any progress in rolling back the Left as long as the Federal Reserve continues to operate as is. It is the main pillar of Progressive plans for Government.

4 posted on 02/17/2013 9:04:56 PM PST by PGR88
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To: PGR88

“As a side note conservatives will never make any progress in rolling back the Left as long as the Federal Reserve continues to operate as is.”

Ben Bernanke appointed by “compassionate conservative” George W. Bush. Bush jr. Also signed TARP into law. Also appointed Henry Paulson, Chairman of Goldman Sachs to be Secretary of the Treasury.

Alan Greenspan, architect of easy money, low interest rates and both the tech stock and housing bubbles was appointed Fed Chairman by conservative Ronald Reagan.

George H.W. Buah bailed out the S&L industry with taxpayer money. Republican and self professed conservative Senator John McCain (Republican candidate for President in 2008) was in bed with S&L head Charles Keating (remember the Keating 5?).

History suggests the supposedly conservative Republican Presidents have been fully complicit in the behavior of the Fed.

5 posted on 02/17/2013 9:58:42 PM PST by Soul of the South (Yesterday is gone. Today will be what we make of it.)
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To: Soul of the South


Mostly because most Republicans are stump-stupid on how the Fed operates. Most elected Republicans have no idea what the Fed is, how it operates or what it does to American currency or the American economy.

The Republicans continue to carry water for the big money-center banks, and stupidly so.

If the GOP had gotten their head out of their nether regions, they would have taken on the bankers starting in 2009 and they could have prevented several Democrats from winning senate seats, most notably Princess “High Cheekbones” Lieawatha from MA, who fashions herself as a champion of bank reform. Never mind her actual legal past... it’s all about perceptions, and the GOP has allowed itself to be portrayed as friends of the big banks and as justifying these bailouts.

7 posted on 02/18/2013 12:20:04 AM PST by NVDave
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To: Lorianne

Let me try and clarify. When BOA took over Countrywide Credit that institution was teetering on Bankruptcy. Days,maybe hours away. BOA could of waited and purchased that company afterwards,after negotiating with the creditors and paid much much less. Instead they assumed the liabilities and dutifully have paid off billions and billions in bonds that CC had issued. Had CC defaulted we get back to that old bogeyman credit default insurance. Whatever the $$ figure on CC’s debt outstanding,over 20 billion i’m pretty sure, there was a multiple of that outstanding in insurance on that debt.
So we have a major financial institution ready to fail which is going to cost the banks maybe 50 billion plus all of the chaos involving all of the mortgages placed by CC. Many were owned by Fannie and Freddie Mac.
Countrywide was in a sense the other piece of AIG Much of the garbage AIG insured came from CC.
So we get to the point of just why did BOA buy them? Nothing i’ve said wasn’t known by the time everything started unwinding in 2008. What wasn’t known was the ultimate cost of CC failing, of all the mortgages repackaged, sliced and diced up into their principal and interest components. Nobody knew just how tangled everything was and that was intolerable considering how things already were.
Now we get to the point. Nobody working on wall Street at the time believed that BOA decided that taking over a company with untold legal liability of which precious little would have been recovered, of a company with billions of doubtful loans on their books, made sense. The exposure wasn’t quantifiable. The Fed itself arranged that marriage. Nothing else makes sense. With that marriage came some assurances that CC wouldn’t be an endless albatross around the neck of BOA. Nothing and i mean nothing else makes any sense at all.

8 posted on 02/18/2013 2:29:18 AM PST by wiggen (The teacher card. When the racism card just won't work.)
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To: Lorianne

Bank of Amigo...didn’t they give mortgages to illegals?

9 posted on 02/18/2013 6:25:39 AM PST by FES0844
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