Reuters is reporting that Bank of America met this week with Treasury Secretary Tim Geithner as well as Federal Reserve governor Daniel Tarullo apparently to discuss the housing market, the economy and consumer spending. Does anyone really believe that’s what they were talking about? Bank of America was crushed this past week in the stock market route and there have been concerns that they will need to raise capital shortly to stay afloat.
Bank of America continues to carry the burden of the Countrywide Mortgage purchase from a few years ago. All of those bad mortgages have not been completely recognized on their books and it continues to drag down the bank.
The Reuters article also mentioned that Brian Moynihan, Bank of America CEO, also stressed that Secretary Geithner needs to push for an agreement amongst the 50 States Attorneys General to come up with a settlement with the big banks for the mortgage fraud that has gone on. Right now they are trying to agree on a $20-$25 billion payoff to the States Attorneys General in return give immunity to the banks. Millions of homeowners will likely lose their legal rights to pursue the banks in court.
Attorneys Generals are supposed to be the top law enforcement official in the states and are supposed to defend the law – except when it comes to collecting billions of dollars that will help fund their departments and help them get re-elected.
Bank of America is trying to sell half of its stake in a large Chinese bank in order to raise cash.
- Goldman Sachs Downgrades Bank Of America, Cites Market Rumors As The Reason (BAC, GS) (businessinsider.com)
- US Default Scare Leads To Biggest Weekly Surge In Non-Seasonally Adjusted M2 In History (zerohedge.com)
- Bank of America CEO faces investors (seattletimes.nwsource.com)
- BofA Chief Sees Top U.S. Officials (online.wsj.com)