Thought I'd share this story on BofA's continuing woes.
Bank of America bailout speculation intensifies
...the bank could negotiate with the federal government a loss-sharing agreement or balance-sheet restructuring, according to a report in today’s Charlotte Business Journal.
...the bank said mortgage repurchase liabilities may rise from government-controlled Fannie Mae and Freddie Mac
Christopher Whalen, managing director of Institutional Risk Analytics , said in an op-ed piece published by Reuters this week that the government should take control of BofA, settle claims with the backing of the FDIC and eventually return a healthier BofA to the private sector.
Some see a federal bailout occurring in conjunction with foreclosure relief for troubled borrowers, making a rescue more politically palatable heading into next year's presidential election.
“As unpalatable as another bailout would be, we’ve got to do something,” Tony Plath, a finance professor at the University of North Carolina-Charlotte, told the Charlotte Business Journal. “We can’t have a $2 trillion bank twisting in the wind.”
I have a couple of questions:
1. Why do the tax payers continue to fork over money to BofA? Your average Joe/Jane has no idea this is still happening and would be furious to find out about the details of the ongoing saga.
2. Where is Dodd-Frank in all of this? The authors, along with Tim Geithner told us that troubled banks were supposed to be wound down without risk to the taxpayer.
We continue to pay for corporate welfare while banks are flush with money, interest rates are historically low, no one is loaning to small businesses and CEO compensation is up 1000%.
With the initial acceptance that the US should play a major roll in proping up failing banks, it seems to be a regular, ongoing practice now, continuing without an endgame, that is getting little attention...for obvious reasons.