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It looks a lot like the Fed is putting a big bank’s interests over those of taxpayers,...

It looks a lot like the Fed is putting a big bank’s interests over those of taxpayers, Jonathan Weil writes, as it supports Bank of America’s decision to shift derivatives into a subsidiary filled with federally insured deposits. Fed priorities seem to lie with protecting BAC from losses, even if it means greater risks for the FDIC’s insurance fund - and taxpayers deserve to know why.
Comments (19)
  • RJK1
    , contributor
    Comments (53) | Send Message
    Its hard to imagine how bad these banks books must be when they can't even doctor them up with fraudulent mark to fantasy assets.


    What's even more scary is that the US Govt endorses accounting standards that would make organized crime blush.


    This is a train wreck folks and you better be thinking about how you need to protect yourselves on many levels.
    20 Oct 2011, 05:58 PM Reply Like
  • phxcrane
    , contributor
    Comments (415) | Send Message
    The accounting of the federal government would make organized crime blush !!
    20 Oct 2011, 06:01 PM Reply Like
  • wolverine27
    , contributor
    Comments (412) | Send Message
    the more things stay the same ...
    20 Oct 2011, 06:27 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
    Let the Shell Games begin!
    20 Oct 2011, 06:27 PM Reply Like
  • hermanbrut
    , contributor
    Comments (253) | Send Message
    B of A is a corporation, and Repubicans say "corporations are people." So why doesn't the government foreclose on B of A and put them in jail for swindling America. Can't do it?
    Guess that proves that corporations aren't really people after all.
    Wake up Republicans! Start thinking for yourself!
    20 Oct 2011, 06:41 PM Reply Like
  • davidbdc
    , contributor
    Comments (3141) | Send Message
    we already know why!!!!


    The triumvirate of the politicians, public unions, and financial elite run this country for their benefit and to the detriment of the rest of the country.


    These banks should be broken up - Glass-Steagall returned. Done. Not very difficult.
    20 Oct 2011, 07:18 PM Reply Like
  • Chris Kent
    , contributor
    Comments (276) | Send Message
    I'm a little surprised the author of this post is calling out the Fed this way. After all, what would you expect of the same organization that bailed out BAC once, and then essentially provided 0% venture capital financing (compliments of the taxpayer) a second time over so they could swallow the residue of Countrywide and Merrill Lynch, both purchased at above market prices at the time, by a brainless Ken Lewis?


    A third bailout would be atrocious, so we'll just find other ways around "throwing money at it" in the form of "letting BAC break the rules" for a while, in the hopes that the FDIC won't have to pick up the pieces.
    20 Oct 2011, 07:24 PM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (193) | Send Message
    ML bought at above market prices (3 times book) totally agree but CFC too? Really. Please elaborate. CFC was bought at 30% of book and while it can certainly be argued with the benefit of later events(hindsight is always 20-20 ain't it) that even that price was too high CFC being bought at above market was by no means crystal at the time. Also what 0% VC financing are you talking about? Best I know is that a total of 45B in bailout money was provided to BAC(which has been repaid back with interest- nothing 0% about this) and then separate from that, other arrangements were made with BAC(and with other bankks too, if I recall correctly both JPM and C got significantly more sweetheart deals than BAC did) to protect them from severe losses. Far as I know, as of today the Fed or the Treasury is not out of pocket ANYTHING regards BAC. That is way more than can be said about other firms that are still wards of Uncle Sam - AIG, Freddie, Fannie, GM, etc.
    21 Oct 2011, 02:52 AM Reply Like
  • orangutan
    , contributor
    Comments (215) | Send Message
    "and taxpayers deserve to know why"




    Is there anyone left in America that doesn't know why?
    20 Oct 2011, 07:45 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
    "and taxpayers deserve to know why."


    To protect Uncle Warren's investment.
    20 Oct 2011, 08:04 PM Reply Like
  • joemarolla23
    , contributor
    Comments (48) | Send Message
    21 Oct 2011, 12:38 AM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (193) | Send Message
    I'm surprised here that a Bloomberg columnist is conveniently using only the part of the narrative of another Bloomberg story that "fits" the story this "article" is trying to portray while conveniently ignoring other points which the original Bloomberg article made and which do not fit the narrative here. Guess you can have awards and what not but if you have an axe to grind well ... you're going to grind it!
    21 Oct 2011, 02:42 AM Reply Like
  • bbro
    , contributor
    Comments (9322) | Send Message
    J Weil is an attorney who worked for a short seller who is trying
    recaptire his glory days from his Enron reporting....
    21 Oct 2011, 03:59 AM Reply Like
  • Econ 101
    , contributor
    Comments (317) | Send Message
    Warren Buffet knows that BoA can get away with privatizing profits and socializing the losses. That is why he will make money with BoA and the rest of us (thru the FDIC) will eat it in the shorts. This shift is legalized theft plain and simple and it will happen.
    22 Oct 2011, 02:45 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message




    That's why he does not buy common shares on the open market either.


    Not many of us likely to even have access to what he bought.
    Meanwhile the Sheeple thing Buffet's deal is an endorsement to go out and buy BAC shares.


    I would say just the opposite may be true.
    22 Oct 2011, 09:25 AM Reply Like
  • RJK1
    , contributor
    Comments (53) | Send Message


    Spot on. Warren Buffet trys to wrap himself in a blanket of social justice by voicing his outrage at his low effective tax rate due to capital gains. Meanwhile, he positions himself to suck the US Taxpayers out of billions of (likely pre-promised) subsidizations from the Government in BoA.


    He will then trumpet his righteousness in "Investing in America" , screw our kids futures by taking Billions from Uncle Sam and thus adding to their debt and position himself as the hero to all.


    He's just another corrupt insider with no personal morals as to the ethics of "how" the money is made. His track record is littered with past episodes of his insider corruption. Look into how the government let him off the hook for his illegal SIlver "play" years ago. We nail Martha Stewart to the Wall for $20K but hail saint Warren for his billions of fraudulent actions. I guess Martha needs to start spreading more money around like Warren
    22 Oct 2011, 11:23 AM Reply Like
  • Econ 101
    , contributor
    Comments (317) | Send Message
    1980XLS & RJK1




    Suggested reading "Republic. Lost", by Lawrence Lessig who explains the way congress is corrupted and why the system must be reformeded
    23 Oct 2011, 04:11 PM Reply Like
  • LarryKear
    , contributor
    Comments (5) | Send Message
    I am tired of all this BAC bashing. Get over it BAC bought Merril. It is finished, true Country-wide was not a good investment, but Ken just wanted to help his friends in the White House out. All the banks went down that sliperry slope. Why should BAC be the one bank to catch all the hea and price tag for a government inspired failed policy. Enough already.
    24 Oct 2011, 06:25 AM Reply Like
  • Econ 101
    , contributor
    Comments (317) | Send Message
    Agreed! Not just BAC, lets throw all the guilty banksters in jail! Along with the congressmen who took gifts (i.e., Legal campaign contributions) that favored the rich and not the people that elected them. And the "K" street enablers who were the middle men for the graft (legal graft) that had Glass Stegal repealed and destroyed a regulatory environment that worked for 40 years, had the Community Redevelopment Act passed so as to make loans to people who had no means to repay and stood by when derivatives made from those "lyier" loans were deemed not to be regulated.
    25 Oct 2011, 02:39 AM Reply Like
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