Bank of America’s Latest Insanity 1


BofA sells mortgages to Fannie MaeBank of America has just sold 400,000 lousy loans to none other than our old pal Fannie Mae. They decided recently that they were tired of having to tread water to deal with these loans and threw them to someone with deeper pockets.

Of course, they didn’t say it in quite those words. No, they used fancy expressions like “Our … transfer strategies directly support company goals … to divest certain non-strategic assets, and to continue to improve the company‚Äôs capital position by reducing holdings of capital-intensive assets.”

Wow, that’s a mouthful of hot air. What they mean is they’re losing money badly and finally got smart. What happens when a bank loses cash? They look bad and weak. So toss all the bad mortgages on Fannie Mae. What happens when Fannie loses cash? The Treasury dives in and throws more of our money at them. It’s win-win-lose (BofA-Fannie-Us).

Exciting times, aren’t they? Well, not to worry, guess how much confidence Fannie has that you and I have made a good investment in these loans. Not much, I’m afraid. Loans worth $73 billion were sold in one bundle for the grand sum of $500 million.

I’m heading for the hills. Anyone joining me? Would you take a gamble with taxpayer money on a nut-job adventure like this? I can’t believe what our government’s trying to pull on us, but each day is just one insanity bigger than the next.


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One thought on “Bank of America’s Latest Insanity

  • Jim Eisberg

    Follow Fareed Zakaria & Rana Faroohar in Time Magazine. Time has finally discovered that it’s the maldistribution of wealth (taking payroll taxes only off the bottom ensures that all wealth flows toward the top–the trickle up practice) that is causing our jobless recovery. We need a confiscatory estate tax (life is a game, money is how we keep score, and when the game is over, the money goes back to the government, who printed it so that you could gather it, and NOT to your offspring, who are ungrateful, unworthy or both, and if you don’t think so, you need to get an unbiased appraisal, as you would with any other investment). We need to encourage redistribution by restricting all government contracts to companies whos officers make no more than 20 times the salary of the least paid workers with the same seniority, and by breaking up any company that’s too big to fail, and by disallowing mergers such as those that have created Verizon and the Murdoch news empire. This is not class warfare–it’s warfare against establishment of an American class system. It’s bad enough that you can get your kids and grandkids into Harvard by endowing a chair or constructing a building–when you die, your great-grandkids should have to get in on their own merit and their own money.

    Meanwhile, don’t head for the hills–we have met the enemy and it is us. About 75% of us (see John Sununu’s article in the August 8 Time) are getting benefits from Uncle Sam, whether it’s food stamps that don’t help us eat better, to mortgage deductions that help us buy big homes in the suburbs that make “urban planning” an oxymoron, to tax breaks that make General Electric get money back from taxes they didn’t pay.

    Credit unions are a great response to B of A,, but there are more problems. Do you send your printer back to Hewlett Packard when you find out that your convenient customer service rep is in Pakistan? Do you throw away anything not made in America? Do you write your Congressmen every time you find out that a law is not working (e.g., all software patents)? If you love your country, you shouldn’t hate your government if you haven’t tried to get it to represent you. For instance, the Tea Party “landslide” was elected by about 16% of all citizens elegible to vote, and that number doesn’t include anyone who’s lost his right to vote by committing a felony, or immigrants who have to abide by legislation without representation. So get out on the hustings or kwitcherbitchin.