Well, this is just more of the same. Shareholders and customers pay the tab for greed and incompetence–and the Administration goes along. A new deal–but no one held responsible.
This just in:
Bank of America and the Justice Department have a reached a record $16.65 billion settlement, capping the most sweeping federal investigation into the sale of toxic mortgages by a Wall Street bank since the 2008 financial crisis.The landmark settlement, announced by Attorney General Eric H. Holder Jr. in Washington on Thursday morning, requires Bank of America to pay a $9.65 billion cash penalty and provide about $7 billion in relief to home owners and blighted neighborhoods.
“The size and scope of this multi-billion-dollar agreement go far beyond the ‘cost of doing business,’ ” Mr. Holder said in a prepared statement. “This outcome does not preclude any criminal charges against the bank of its employees. Nor was it inevitable over these last few weeks that this case would be resolved out of court.”
As part of the most recent settlement, the bank has agreed to write down the balances of mortgages of struggling home owners and also pay to demolish foreclosed properties contributing to blight in certain cities.“We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future,” Bank of America’s chief executive, Brian T. Moynihan, said in a statement.
While no bank executives will face charges as part of the civil settlement, federal prosecutors in Los Angeles are preparing a lawsuit against Angelo Mozilo, Countrywide’s co-founder, who had come to symbolize the risky mortgages that required homeowners to show little proof that they had the ability to pay the loans back.[emphasis added]
So, let’s look at these two parts above.What that quote really should say is, “heh, we socked this to the shareholders and customers. All that money is coming out of their pockets. Me? My guys? Not a penny. And nothing will change. We’ll still get huge pay packages and figure out how to fleece people down the road–while we raise customers’ fees to pay off this beaut of a deal. Thank you Eric Holder. You are a dream”.
This is just nonsense:
For the Justice Department, which has come under fire for an uneven response to the financial crisis, the case is intended as a signature moment and a warning shot to all of Wall Street.
What exactly is the message here to Wall Street?
You rob America. You fuck up the economy. You send millions of people to the unemployment lines. You get personally rich.
And the price to you is ZERO. Not personally financially, not out of your pocket. And, most important, you stay out of fail AND keep your job and huge pay.
The message is not a warning shot.
It’s a wet kiss.
It essentially opens the door to the next financial crisis or financial manipulation because the culture has not changed.
I, and many others, have argued for a very long time that these financial penalties are just bogus. Little fish get nabbed (as I wrote almost three years ago)–and mostly for insider trading, not for the more serious crimes that were committed that hurt millions of people.
It’s a sham.