PIMCO, Black Rock and the New York Federal Reserve are suing Bank of America to repurchase approximately 47 billion of soured mortgage backed securities issued through Countrywide Financial.
Two quick observation are striking regarding the lawsuit:
1. Institutions (and not just foreclosed homeowners) are going after each other through the REMIC, CDO, A-Z tranche, stated-income, foreclosure, MBS nightmare. One would think that the large investment banks
would stick together in the face of a double dip real estate crisis that could further stall the sub 2.0% GDP 'economic recovery.'
2. Jamie Dimon (CEO of JP Morgan Chase) is a board of director on the New York
Federal Reserve. How ironic that Dimon may have gone after a rival bank
(albeit insolvent) by using his non-partisan stature with the New York Fed! Equally remarkable lies in the fact that the Federal Reserve would allow anyone from the financial sector (especially a CEO) with a seat on the board.
Pay close attention to this story as it contains some hidden soap opera
drama fizzling subsurface.
Disclosure: No positions