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I hope that the world's governments will get together and put together some kind of legislation that will prevent the banks from getting Too Big To Fail. This has happened twice now in a very short period of time...make no mistake about it, there are banks elsewhere in the world that have done the same thing and their governments have had to bail them out, too. I am not advocating any particular political party nor any special kind of politics; just let's be logical. If this keeps happening, there is a problem and to stop it from happening, you have to eliminate the problem.
Then what kind of government are you "not advocating" in this "one world legislation"? Let's see....hmmm...that type of goverment is called??????
"One World"?
Then what kind of government are you "not advocating" in this "one world legislation"? Let's see....hmmm...that type of goverment is called??????
"One World"?
This is the main issue... everyone knows it's not working or broken - some even go that extra mile and call it insane, crazy, and/or past the point of no return.
In the end it's all rhetoric - nobody knows how to "fix it".
The funny thing is that everyone thinks that boa is the bad guy. They failed. That's BS! They bought defunct countrywide and acquired all those home loans and the people who just walked away from their mortgage. If they did not buy that albatross which they even acknowledge was a huge mistake the company's stock would be over $50/share. Then they acquired Merrill who made horrible decisions and became way over leveraged. They would have ended up like Lehman if it weren't for boa. Boa does get a very bad rap and lots of it has to do with the companies they acquired rather than the business model which made the bank very profitable.
The funny thing is that everyone thinks that boa is the bad guy. They failed. That's BS! They bought defunct countrywide and acquired all those home loans and the people who just walked away from their mortgage. If they did not buy that albatross which they even acknowledge was a huge mistake the company's stock would be over $50/share. Then they acquired Merrill who made horrible decisions and became way over leveraged. They would have ended up like Lehman if it weren't for boa. Boa does get a very bad rap and lots of it has to do with the companies they acquired rather than the business model which made the bank very profitable.
I would agree here. Countrywide IS the problem. Couldn't BofA divest its Countrywide portion of the business?
.. Countrywide IS the problem. Couldn't BofA divest its Countrywide portion of the business?
No. Because BofA sold securities to investors where these loans were used as collateral. Those investors would consider it a default and close down the bank. The bank either has to foreclose on those homes then resell them them to pay back the investors, or get the Federal Reserve to buy the loans by printing more money, or push off the mess onto the taxpayers who will pay back the investors.
No. Because BofA sold securities to investors where these loans were used as collateral. Those investors would consider it a default and close down the bank. The bank either has to foreclose on those homes then resell them them to pay back the investors, or get the Federal Reserve to buy the loans by printing more money, or push off the mess onto the taxpayers who will pay back the investors.
This is the wonder of banking deregulation.
Correction, Countrywide had already securitized the loans before BoA took them over... In some cases they were selling the loans they hadn't even written yet. They transferred them illegally via MERS (what a joke that company is) so the note technically is useless and then robosigned papers to try and mass foreclose until the scandal broke. Now they're desperately trying to cover with CDS, but the swing is too wide.
There is one other option... the investors can take a haircut because the risk was mislabeled on the MBS. They didn't buy AAA paper because Countrywide flat out lied. Fraud. That's the liability that BoA took over and in general why they're getting sued by the insurer.
Correction, Countrywide had already securitized the loans before BoA took them over... In some cases they were selling the loans they hadn't even written yet. They transferred them illegally via MERS (what a joke that company is) so the note technically is useless and then robosigned papers to try and mass foreclose until the scandal broke. Now they're desperately trying to cover with CDS, but the swing is too wide.
There is one other option... the investors can take a haircut because the risk was mislabeled on the MBS. They didn't buy AAA paper because Countrywide flat out lied. Fraud. That's the liability that BoA took over and in general why they're getting sued by the insurer.
Exactly. It was countrywide that was the problem and Ken Lewis Obsession with buying it. No one wants to see who the real problem was here. It was NOT boa it was countrywide.
No. Because BofA sold securities to investors where these loans were used as collateral. Those investors would consider it a default and close down the bank. The bank either has to foreclose on those homes then resell them them to pay back the investors, or get the Federal Reserve to buy the loans by printing more money, or push off the mess onto the taxpayers who will pay back the investors.
This is the wonder of banking deregulation.
Sorry but your wrong on this point. Countrywide did the securitization before being acquired by boa. Blame the banks all you want, but it was Investment banking like, Lehman, bear sterns, Goldman, Merrill that were the problem. Not wells Fargo, boa, pnc. They were true banking institutions deposits and commercial banking. Not investment banking which is much riskier.
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