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  • Bank Of America: With $17 Billion At Risk, Is Brian Moynihan Going To Make It Or Blow It?  [View article]
    I think the BAC has never fully integrated Countrywide into its organizational structure and has the ability to place it into a separate bankruptcy if the government is too unreasonable in its demands. Does anyone know the real situation here? Is a separate bankruptcy for the Countrywide division still possible? I would love to read the correspondence between the government and BAC during the Countrywide acquisition. Unlike your comment above, I have always believed that there was some government pressure on BAC to do the deal. Is it possible to find out from somewhere if that is or is not true?
    Jun 15, 2014. 03:20 AM | 2 Likes Like |Link to Comment
  • Bank Of America: With $17 Billion At Risk, Is Brian Moynihan Going To Make It Or Blow It?  [View article]
    I hope Mr. Moynahan considers time as a part of the negotiations. The higher the amount the longer the time to pay it. That would delay some stock price increase, but it would allow the use of profits to preserve the capital structure as the payments are made, providing the increased amount also includes an exemption from interest charges. For example, he could agree to go to 18B paid, 6 this year and 3 per year for the next 4 years. I think the government is more interested in bragging rights over the total amount than net present value at some interest rate.
    Jun 14, 2014. 02:01 AM | Likes Like |Link to Comment
  • Day 2 of Bank of America's (BAC) Article 77 hearing led off with a new revelation: Chief Risk Officer Terry Laughlin in Nov. 2011 told the 22 institutional investors in favor of the settlement the bank had been given permission to put Countrywide into bankruptcy if the mortgage lender's liabilities threatened the BofA's viability - the message clearly being the $8.5B settlement was a pretty good outcome for those suffering losses. Naturally, the "objectors" say there were other options rather than signing off on a "sweetheart deal."  [View news story]
    Who, and with what power and/or authority granted the permission for BofA to put CW into bankruptcy. I think it had to be our "government (who in the government would be nice to know)" and it had to be to keep CW from going bankrupt before the merger, so Fanny and Freddie and others would not go under. I think BofA was tasked to rescue CW, and would sure love to know the terms of the deal. Maybe if BofA puts their CW subsidiary into bankruptcy, all that will come out in court as BofA proves their right to file a separate bankruptcy for CW.
    Jun 5, 2013. 08:31 PM | Likes Like |Link to Comment
  • Day 2 of Bank of America's (BAC) Article 77 hearing finds an AIG lawyer arguing those who approved the $8.5B settlement - including BlackRock (BLK) and MetLife (MET) were conflicted and never investigated how much money investors actually lost on the MBS originally valued at $105B. A lawyer for BlackRock says it and other firms agreed to the settlement rather than risk BofA putting Countrywide into bankruptcy. Observing the proceeding, Mike Mayo says there's "significant legal tail risk" for BofA.  [View news story]
    I think that it would be interesting for BofA to put CW into bankruptcy and maybe some of the communications between the Fed & Treasury and BofA at the time of the CW take over would come out. I think BofA was given promises or arm twisted to keep the CW takeover going. It would be really interesting to see some of the communications between the government and BofA at that time. Some of that material would probably have to be exposed by BofA to convince a court that it should have the right to put the present CW division into a separate bankruptcy.
    Jun 5, 2013. 03:06 AM | 2 Likes Like |Link to Comment
  • Not So Fast With The Countrywide Settlement  [View article]
    I read somewhere that BA has kept the Countrywide division as a separate operating organization that BA could put in bankruptcy separate from the BA parent. Does anyone know the truth of that situation? What would be the effect of that action if it is possible?
    Apr 22, 2013. 07:53 PM | Likes Like |Link to Comment
  • Did Bank Of America Just Effectively Limit Its Countrywide Liabilities?  [View article]
    Question: Did BAC keep Countrywide as a separate corporate organization the could be placed in bankruptcy separate from BAC itself?
    Apr 20, 2013. 03:30 AM | 2 Likes Like |Link to Comment
  • Ford (F) plans to build its new Transit Connect Wagon in Spain due to a lack of manufacturing capacity in North America. The decision appears to be based on simple math. According to Ford VP Jim Tetreault, the automaker is already operating at 114% in North America.  [View news story]
    Ford just closed two plants in Europe. Labor costs! Ford is going to build vehicles in Spain and possibly Turkey. Lower Labor costs. Ford is doing a good job of transferring production to lower cost locations. When the next slow down in sales comes, guess which plants will show up on the close lists.
    Nov 15, 2012. 02:44 AM | Likes Like |Link to Comment
  • Getting The Questions Right  [View article]
    The CPI puts all of us in the same box that does not exist as a reality for any of us. The majority of purchases are daily living items at grocery stores, toy stores, gas stations, clothing stores and other like locations. The homemaker the buys cleaning supplies at the dollar store, because she cannot afford the brand name products at the grocery store sees that as inflation, but the CPI sees lower costs. Anyone who buys branded products and fresh foods knows the costs are going up, along with utility costs, taxes, cars and toilet paper. How will the CPI reflect the 2% tax increase that all employees will experience when the reduction in Social Security withholding is eliminated?
    Nov 11, 2012. 02:31 AM | 2 Likes Like |Link to Comment
  • Jumping The Gun On Bank Of America  [View article]
    Thanks for the referenced article. Makes me wonder if the execs at BAC are working to avoid a portfolio of low interest mortgages? Or, maybe they just have more than enough to deal with the Countrywide hangover.
    Feb 4, 2012. 03:33 AM | Likes Like |Link to Comment
  • Jumping The Gun On Bank Of America  [View article]
    No comment - just a question. Are the banks accumulating a lot of low interest mortgages that could lead to a repeat of the Savings and Loan crisis of the eighties? Or, are the low interest mortgages being converted to investor owned or government owned paper? At the current mortgage interest rates, I cannot see why any bank would want to hold any mortgages as investment paper, even though the lower house prices and interest rates should make the new and refinanced mortgages relatively safe. Would appreciate some articles about banks and mortgage portfolios. Thanks - Sandy
    Feb 1, 2012. 11:17 PM | Likes Like |Link to Comment
  • A third factory rejects Ford's (F) tentative agreement with the United Auto Workers union. Local 892, which represents workers at an interior-parts plant in Saline, Mich., votes no after two local unions shot down the contract earlier this week. Opponents say the contract lacks a real wage increase to fight inflation and allows Ford to continue its liberal use of contract workers.   [View news story]
    Since GM and Chrysler went bankrupt their Unions were "stuck" with large blocks of company stock. Why would a union strike a company it owns. Also, under the settlement agreements, the unions cannot strike at GM or Chrysler during this round of contracts. Ford is going to be the union target this time and into the future, unless the unions are forced to divest themselves of their stock holdings in the companies with whom they negotiate. Long term, Ford could be forced into more foreign production, even now they are offering a better contract than GM or Chrysler.
    Oct 16, 2011. 04:17 AM | Likes Like |Link to Comment
  • U.S. Treasuries Holders: China Is #2  [View article]
    Dear Mr. Brouwer:
    Are there any conditions where the Fed in holding all these Treasuries could create large unexpected assessments on the member banks? I am wondering about the consequences to the banking industry of events such as interest rate increasing, lack of buyers for future issues of Treasuries and I do not know what else could happen.
    Nov 28, 2010. 07:57 PM | 3 Likes Like |Link to Comment