B of A Pays $425M to End Fed Guarantee
I was going to say that $425 million seemed like a lot of cash, but then I remembered the $30 billion they took in taxpayer monies.
“Bank of America Corp., the biggest U.S. bank, agreed to pay the government $425 million for an unused guarantee of Merrill Lynch & Co.’s assets as the bank tries to cut reliance on federal support after two bailouts.
The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. will get the money, according to a Bank of America statement today. Regulators were seeking $300 million to $500 million, according to a person familiar with the matter who spoke before the agreement was announced.
The payment would end a dispute over what the bank owes the U.S. for a promise to help absorb losses on $118 billion of holdings, mostly at Merrill Lynch. The federal guarantee helped seal the takeover of the New York-based brokerage after fourth- quarter losses spiraled past $15 billion. While the accord was announced in January, an agreement was never signed and the bank resisted paying.”
What an exquisite waste of taxpayer capital . . .
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Source:
Bank of America Agrees to Pay $425 Million for Merrill Backstop
Margaret Popper and David Mildenberg
Bloomberg, September 21 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5noRhggsFYI
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September 21st, 2009 at 8:48 pm
“What an exquisite waste of taxpayer capital . . .”
_________
BR:
It might be citizen capital, or Chinese/Japanese capital, but it’s not taxpayer capital, as the taxpayer hasn’t the wherewithal to cover our government’s largess. That the “money” has already been created or borrowed and spent, without a proportional and offsetting tax increase, would seem to indicate that the taxpayer was not involved. Will the political class ever force the taxpayer pay back the “money” the Fed/Treasury inbred has pulled out of thin air? Doubtful.
I hope these fuckers choke on the debt they have signed-off on.
September 21st, 2009 at 8:57 pm
How does that compare with the money paid out in bonuses? Damage control so they can do it again?
Oh, the paper tiger SEC is going to be propped up after this. Positive PR.
That judge has some nerve showing what a paper tiger they are.
September 21st, 2009 at 9:02 pm
This country is a joke.
September 21st, 2009 at 9:07 pm
Maybe I missed the Memo, but, w/this: “what the bank owes the U.S. for a promise to help absorb losses on $118 billion of holdings, mostly at Merrill Lynch..”
On which Market were those Trades executed, again?
~~
much to MA’s point, if ‘our’ Creditors are looking for, future, repayment on the ‘promises’ they acquired, they better look at who issued, and signed the Note..
as Tishman-Speyer is learning (thank you C. Whalen) diligence isn’t for the lazy.. and ineptness doesn’t pay.
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Tishman-Speyer+Peter+Cooper+Village
here’s a, starter, hint, for them( yon’ ‘Creditors’ )–the Federal Reserve System 20th Street and Constitution Avenue, NW Washington, DC 20551 (202) 452-3000
http://www.federalreserve.gov/fraddress.htm
as an aside, it looks like, just about, anyone can get away with using the .gov domain..
September 21st, 2009 at 9:09 pm
It’s Fed money, taxpayers get the debt.
September 21st, 2009 at 9:21 pm
MEH -
“just about, anyone can get away with using the .gov domain.. ”
understated elegance of expression, one of your finest
and, oh so true
September 21st, 2009 at 9:22 pm
WTF? Am I missing something here? Why in the world was Ken Lewis all in a tizzy 8 months ago about losses on Merrill and now everything’s just peachy — we don’t need no stinkin’ gair-awn-tee? One of two things seem apparent from this (correct me if I’m wrong) — either there weren’t no stinkin’ crisis of collossal proportions to begin with, OR Lewis, et al. are just lying about asset prices (maybe change to FAS 157 is a part of this).
So which is it, were they all lying back then, or are they all lying right now?
BTW, did “we” ever “absorb” any of those ML losses (I forget, it’s been a long, demoralizing year.)
September 21st, 2009 at 9:23 pm
And ditto on the MEH quip re .gov. Enjoyed that tremendously.
September 21st, 2009 at 9:27 pm
Oh right, it says “unused guarantee.” Of course, these days, especially when .gov is involved, a seemingly transparent term like “unused” can mean all kinds of things, sometimes simultaneously. Like the “profits” “we” are making on our TARP “investments.”
September 21st, 2009 at 9:30 pm
i agree w/ MA
a tax increase would crash the economy beyond where we are now- it’s all about the QE- and it will work as long as everyone plays along-
scam of scams
September 21st, 2009 at 9:46 pm
Government of the people by the people for the people?
One out of three doesn’t work.
September 21st, 2009 at 9:48 pm
Maybe Lewis figures this is a get out of jail payment.
September 21st, 2009 at 10:39 pm
>impermanence Says: September 21st, 2009 at 9:02 pm
This country is a joke.
**************
Yes for 98 or 99% of Americans it’s not a joke but rape and pillage by the elite who are LOL.
Last Feb Joseph Stiglitz said the Government should allow every distressed bank to go bankrupt and set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice.
The elite made sure that did not happen….
September 21st, 2009 at 10:47 pm
If you loan me $1000, that is my headache. If you loan me $1000000, that is your headache. Let us enjoy OPiuM (Other People’s Money) while we can! If the Japs come knocking on our door for their money, we will drop another set of twins.
September 21st, 2009 at 11:15 pm
Just when you think you’ve heard it all………..you realize you haven’t. Far from it. So let me get this straight: We the Sheeple “loaned” taxpayer funds to the banks so they can then loan it back to us? Someon please stop my head from spinning of its axis.
Banks to Make Loans to FDIC?
http://www.nytimes.com/2009/09/22/business/22bailout.html
http://www.calculatedriskblog.com/2009/09/banks-to-make-loans-to-fdic.html
September 21st, 2009 at 11:20 pm
This mother of Ponzi schemes would have been moot if Joseph Stiglitz suggestion last Feb that the Government should allow every distressed bank to go bankrupt. Then set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice.
However the elites won again including corrupt Congress where avg net worth of Senator is about $12M and Congressiter $5M.
However most Americans ( not the smart folks here ) don’t quite understand the sordid implications…
September 21st, 2009 at 11:27 pm
Thanks Mannwich, I haven’t had such a good giggle for a while.
And according to my entourage, I’m the crazy one…lol.
September 22nd, 2009 at 12:36 am
Is this money going to end up in a account in the Cayman Islands for judges?
btw Barry your site still downloads a file when I click to reload a page, view comments, etc. I do not like unintended downloads. Please have your programmers look into this.
September 22nd, 2009 at 12:41 am
n/m Just found out it’s a Safari issue with the new release.
September 22nd, 2009 at 2:43 am
The chinese are slipping to a deficit. That is unheard off and yet this was well expected by the economist. We are on the final leg of the dealth of the dollar.
read it here
Fresbee
September 22nd, 2009 at 5:14 am
This whole thing is taking on the appearance of true bizzarro land. It is getting to the point no one is even sure what is being talked about anymore. Strange after all that has occurred in the last year with TMBTOC (Too-many-Banks-To-Count).
I think it all revolves around the fact that the Wall Street banksters located in NY want their person in and Ken Lewis in Charlotte out. Let’s not make this so complicated. It’s really quite clear if you blow away the daily smoke-screen.
BOA is the largest bank in the US and the NY syndicate wants it period.
September 22nd, 2009 at 7:05 am
Marcus,
I see the point. But, what about the effect these bailouts have on the value of my dollar? It’s an inflation tax, over and over.
September 22nd, 2009 at 7:18 am
Folks,
These bailouts are highly oligopolistic. Since the top 1% own 50% of all assets, reflating every dollar of assets puts 50 cents back into the pockets of the top 1%. The government has maintained the wealth disparity.
If none of the banks were bailed out and if the FDIC bailed out people just up to the $250k, the gap between rich and poor would’ve decreased significantly.
I haven’t heard anyone talk about this aspect of the bailouts. Has everyone thought of this and concluded “who cares?” Or has this gone completely unnoticed?
September 22nd, 2009 at 7:18 am
So the gov’t made a guarantee (insurance) on certain debt which it never had to pay on it, the gov’t received a fee like an insurance company would, the fee wasn’t negotiated at the time, now it was been, and it has been canceled.
So the gov’t didn’t spend anything on this, the bank had a backstop, it is all over and the tax payer makes half a billion.
Seems like a good deal to me.
September 22nd, 2009 at 7:22 am
http://www.marketwatch.com/story/china-set-to-move-from-trade-surplus-to-deficit-2009-09-22
China set to swing from trade surplus to trade deficit
Economist says Chinese current-account deficit will send Treasury yields higher
….gotta run, but interesting thinking…I would call this time compression…to think of China in 2006, as it was, and to think of China in 2012, as it may be…simply removes a couple hundred years if we were living in an earlier time….
September 22nd, 2009 at 7:58 am
From August.
Via: Telegraph:
Almost a year since the collapse of the Icelandic banks, the rotten nature of these financial corpses is slowly beginning to emerge.
For months rumours of share-ramping, market manipulation, excessive loans to their owners and unusual transfers off-shore have been circling Kaupthing, Glitnir and Landsbanki, whose failure last October left 300,000 British customers unable to access their money.
It has now become clear that this was no ordinary crash. Iceland’s special investigation into “suspicions of criminal activity” at the three banks is likely to stretch from Reykjavik to London, Luxembourg and the British Virgin Islands.
Eva Joly, the French-Norwegian MEP and fraud expert hired by Iceland and now working with the Serious Fraud Office, now believes it will be “the largest investigation in history of an economic and banking bank collapse”.
Many of the banks’ secrets are likely to be inextricably bound up with corporate Britain and the success of these investigations in tracing and recovering assets is likely to affect every UK household.
Local authorities lost £1bn – or 5pc of all the money from council tax – in the over-leveraged institutions, leaving many facing the prospect of drastic cuts in services or steep hikes next year as they wait for the proceeds of the banks’ administration to dribble through…
http://cryptogon.com/?p=11153
Economy Ramp n’ Crash is a great game, if you are aware it is being played..
for newer players, once you see ‘Central Bank’ erect itself on the, former, ‘Free Parking’-square, you know it’s on.
~~
Wes, clawback ~
September 22nd, 2009 at 8:07 am
wunsa,
good point, one of the reasons that the ‘Cained Peep were exposed to the “if we Don’t Bail ‘them’ Out, you’re 401(k) will vanish..” line of agitprop..
http://www.thefreedictionary.com
http://www.thefreedictionary.com/agitprop
September 22nd, 2009 at 9:46 am
[...] are so flush, they have been repaying TARP funds, buying out toxic debt guarantees, and repurchasing preferred shares and [...]