The Bastards of banking trying to cover their own ass

http://www.zerohedge.com/article/blackrock-ceo-seeking-partner-buy-35-bofa-stake-charlie-gasparino

George Orwell once said:
In a universe designed by deceit
To tell the truth is an act of Revolution

Rock on with your bad self Tyler, because we're all listening and spreading the word!

A few days ago, we penned The BlackRock - Bank Of America Ownership Catch 22, in which we discussed the incestuous cross-onwership relationship between the two companies. Then we said:

"It is well known that Bank of America owns 34% of BlackRock via a legacy position inherited from Merrill Lynch, arguably the most valuable part of the business. As of today, the stake is worth around $11.5 billion. Yet what may be a little less known is that BlackRock has also returned the favor, and is now the largest holder of Bank of America, owning 5.35% of the outstanding BAC shares, for a total value of $6.6 billion. Does that mean that there is a wash in there somewhere? Who cares. But one thing that certainly is involved, is a massive conflict of interest, especially in the context of litigation. And a big question mark - to claim that BlackRock is willing to impair a nearly $7 billion investment is naive. Instead, due to the incestuous nature of Wall Street, and the cross pollination of MBS holders, is today's action merely a ploy to get some of the more "impacted" parties to promptly settle and eliminate any possible future litigation? PIMCO, for one, and the FRBNY fir another, have the most to lose if the MBS crisis escalates, and if all MBS are unwound. Which means that somehow this is simply another diversion, with the real action taking place somewhere."

The action is indeed "elsewhere" - Charlie Gasparino has just reported that Larry Fink is seeking a partner to buy 35% of Bank of America. What better way to sweep all the problems underneath the rug than to just buy them all up...

More from Fox Business:

Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs

http://www.bloomberg.com/apps/news?pid=20601087&sid=ax3yON_uNe7I


The banks should have to explain how they managed to buy protection from AIG primarily on securities that fell so sharply in value, says Daniel Calacci, a former swaps trader and marketer who’s now a structured-finance consultant in Warren, New Jersey. In some cases, banks also owned mortgage lenders, and they should be challenged to explain whether they gained any insider knowledge about the quality of the loans bundled into the CDOs, he says.

‘Too Uncanny’

“It’s almost too uncanny,” Calacci says. “If these banks had insight into the underlying loans because they had relationships with banks, originators or servicers, that’s at the least unethical.”

The identification of securities in the document, known as Schedule A, and data compiled by Bloomberg show that Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- more than any other investment bank. Merrill Lynch & Co., now part of Bank of America Corp., created $13.2 billion of the CDOs, and Deutsche Bank AG underwrote $9.5 billion.

These tallies suggest a possible reason why the New York Fed kept so much under wraps, Professor James Cox of Duke University School of Law says: “They may have been trying to shield Goldman -- for Goldman’s sake or out of macro concerns that another investment bank would be at risk.”

Poor Performers

Goldman Sachs spokesman Michael DuVally declined to comment.

SEC expands charges against BofA

http://finance.yahoo.com/news/SEC-expands-charges-against-apf-2636016521.html?x=0&sec=topStories&pos=main&asset=&ccode=

So why bother?


The Securities and Exchange Commission announced Monday it had asked a federal judge in Manhattan to allow it to file the new charges against the biggest U.S. bank. But the SEC also said it wouldn't charge any individual Bank of America officials, directors or attorneys because they are not alleged to have "deliberately concealed" information from the bank's outside attorneys or otherwise acted with intent to mislead.

No profits? Here's a fat bonus!

http://money.cnn.com/2009/07/30/news/companies/bonuses_tarp/index.htm

And where did they get the money from? You and your children's children my taxpaying friends.
You saved their lifestyle on the perils of your own.

Citi and Merrill Lynch paid big bonuses despite losing money last year while fellow TARP recipients Goldman and JPMorgan paid more than they earned.
NEW YORK (CNNMoney.com) -- Even as top banks delivered abysmal performances last year, they still managed to pay out billions of dollars in bonuses to employees, according to a study published Thursday by New York Attorney General Andrew Cuomo.

In an analysis of compensation practices of the original nine banks that received money under the Troubled Asset Relief Program, or TARP, most financial firms paid out compensation that was nowhere close to their overall yearly performance.

Citigroup (C, Fortune 500), for example, which suffered more than $27 billion worth of losses in 2008, paid an estimated $5.33 billion worth of bonuses last year, according to Cuomo's report. Citigroup has been one of the biggest recipients of government aid, taking in $45 billion in TARP funds. Taxpayers now own a third of the bank.

Several banks that were profitable last year paid out bonuses that were substantially higher than what they earned. Goldman Sachs (GS, Fortune 500), which has come under significant scrutiny recently over this year's bonus pool, paid out some $4.8 billion in bonuses despite earning just $2.3 billion. The company collected $10 billion under the TARP program but has since paid it back.

Fed Engaged In 'Cover Up' of BofA, Merrill Deal: Lawmaker

http://www.cnbc.com/id/31528412/

The Federal Reserve sought to hide its extensive involvement and concerns about Bank of America's [BAC 12.35 0.12 (+0.98%) ] acquisition of Merrill Lynch amid the latter's
Source: U.S. Congress
Rep. Darrell Issa
--------------------------------------------------------------------------------

worsening financial condition, a top Republican congressman said on Wednesday.

See the Memo for GOP Members
"The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the 'shotgun wedding' that was the Merrill Lynch acquisition," Rep. Darrell Issa of the House Oversight and Government Reform Committee said in a statement released to Reuters.

"The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," the statement said.



Bernanke said in a statement to Congress obtained by CNBC that the Fed acted with the "highest integrity" and denied exerting any undue pressure in the deal.

The committee has obtained a number of emails and documents from the U.S. central bank about its behind-the-scenes role in the merger, according to sources familiar with documents.

In an interview with CNBC, Issa said Congress will explore the allegations in further detail during upcoming hearings.

"We can't tolerate government officials using their power," he said. "We hope that we'll be vindicated all through the process as we ask our witnesses to answer some tough questions."

Bernanke is "going to have to answer for this role" in the deal, though Issa said the final package put together for the BofA-Merrill deal was not illegal.


"There's nothing wrong with the deal as it turns out, but there is something wrong with interfering with businesses taking normal due diligence and informing their stockholders," he said.

As Bernanke's appointment nears its expiration, the turmoil over the merger could play a factor in whether President Obama will grant the chairman another term.

"The fact is that Bernanke has to be held accountable for how handled this wreck both publicly and privately, and right now there is serious doubt about whether privately he in fact handled it correctly," Issa said.

Emails show Fed pressed BofA to do Merrill deal

http://finance.yahoo.com/news/Emails-show-Fed-pressed-BofA-rb-15500303.html?sec=topStories&pos=2&asset=&ccode=

The POWER of the FED and the abuse of that ISSUE

WASHINGTON (Reuters) - Emails from Federal Reserve officials appear to back assertions by Bank of America (BAC - News) Chief Executive Kenneth Lewis that he was under pressure, to the point of losing his job, to complete the purchase of Merrill Lynch, despite worries about its financial condition.

Republican lawmakers on Wednesday released excerpts of documents, including an email from Richmond Fed President Jeffrey Lacker that cites Fed Chairman Ben Bernanke on Lewis' intent to exercise a "material adverse change" (MAC) clause to exit the Merrill deal.

"Just had a long talk with Ben ... Says they think the MAC threat is irrelevant because it's not credible. Also intends to make it even more clear that if they play that card and they need assistance, management is gone."

A congressional hearing on Thursday will