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Intro: "At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time."

Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)
Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)



Bank of America: Too Crooked to Fail

By Matt Taibbi, Rolling Stone

16 March 12

 

t least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes - some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence - a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn't ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America's bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank's bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it's also far too corrupt to survive.

All the government bailouts succeeded in doing was to make the bank even more prone to catastrophic failure - and now that catastrophe might finally be at hand. Bank of America's share price has plunged into the single digits, and the bank faces battles in courtrooms all over America to avoid paying back the hundreds of billions it stole from everyone in sight. Its credit rating, already downgraded to a few rungs above junk status, could plummet with the next bad analyst report, causing a frenzied rush to the exits by creditors, investors and stockholders - an institutional run on the bank.

They're in deep trouble, but they won't die, because our current president, like the last one, apparently believes it's better to project a false image of financial soundness than to allow one of our oligarchic banks to collapse under the weight of its own corruption. Last year, the Federal Reserve allowed Bank of America to move a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. Then, in February, the Justice Department's so-called foreclosure settlement, which will supposedly provide $26 billion in relief for ripped-off homeowners, actually rewarded the bank with a legal waiver that will allow it to escape untold billions in lawsuits. And this month the Fed will release the results of its annual stress test, in which the bank will once again be permitted to perpetuate its fiction of solvency by grossly overrating the mountains of toxic loans on its books. At this point, the rescue effort is so sweeping and elaborate that it goes far beyond simply gouging the tax dollars of millions of struggling families, many of whom have already been ripped off by the bank - it's making the government, and by extension all of us, full-blown accomplices to the fraud.

Anyone who wants to know what the Occupy Wall Street protests are all about need only look at the way Bank of America does business. It comes down to this: These guys are some of the very biggest assholes on Earth. They lie, cheat and steal as reflexively as addicts, they laugh at people who are suffering and don't have money, they pay themselves huge salaries with money stolen from old people and taxpayers - and on top of it all, they completely suck at banking. And yet the state won't let them go out of business, no matter how much they deserve it, and it won't slap them in jail, no matter what crimes they commit. That makes them not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty.

Self-appointed royalty, it's true - but just as dumb and inbred as the real thing, and every bit as expensive to support. Like all royals, they reached their position in society by being relentlessly dedicated to the cause of Bigness, Unaccountability and the Worthlessness of Others. And just like royals, they spend most of their lives getting deeper in debt, and laughing every year when our taxes go to covering their whist markers. Two and a half centuries after we kicked out the British, it's really come to this?

Bank of America started out in San Francisco in 1904 as an emblem of American capitalism. Founded by a first-generation Italian-American named Amadeo Giannini - it was even originally called the Bank of Italy - the bank set out to serve immigrants denied credit by other banks, and it was instrumental in helping to rebuild the city after the devastating earthquake of 1906.

But like many of the truly bad ideas in history, the present-day version of Bank of America was the product of a testosterone overdose. The concept of an overmassive, acquiring-everything-in-sight, bicoastal megabank was hatched in the terminal inferiority complex of a greed-sick asshole - actually two greed-sick assholes, both of them CEOs of Southern regional banks, who launched a cartoonish arms race of bank acquisitions that would ultimately turn the American business world upside down.

The antagonists were Hugh McColl Jr. and Ed Crutchfield, the respective leaders of North Carolina National Bank (which would take over Bank of America) and First Union (which turned into Wachovia), both based in Charlotte, North Carolina. Obsessed with each other, these two men transformed their personal competition into one of the most ridiculous and elaborate penis-measuring contests in the history of American business - even engaging in the garish Freudian spectacle of vying to see who would have the tallest skyscraper in Charlotte. First Union kicked things off in 1971 by erecting the 32-story Jefferson First Union Tower, then the biggest building in town - until McColl's bank built the 40-story NCNB Plaza in 1974. Then, in the late Eighties, Crutchfield topped McColl with the city's first post­modern high-rise, One First Union Center, at 42 stories. That held the prize until 1992, when McColl went haywire and put up the hideous 60-story Bank of America Corporate Center, a giant slab of gray metal affectionately known around Charlotte as the "Taj McColl." When asked by reporters if he was pleased that his 60-story monster overwhelmed his rival's 42-story weenie, McColl didn't hesitate. "Do I prefer having the tall one?" he said. "Yes."

For a time, this ridiculous rivalry between two strutting Southern peacocks was restrained by the law - specifically, the McFadden-Pepper Act of 1927 and the Douglas Amendment to the Bank Holding Company Act of 1956. These two federal statutes, which made it illegal for a bank holding company to own and operate banks in more than one state, were effectively designed to prevent exactly the Too Big to Fail problem we now find ourselves faced with. The goal, as Sen. Paul Douglas explained at the time, was "to prevent an undue concentration of banking and financial power, and instead keep the private control of credit diffused as much as possible."

But these laws didn't sit well with Hugh McColl. To him, size was everything. "We realized that if we didn't leave North Carolina," he explained later in his career, "we would never amount to anything - that we would not be important." Note that he didn't say the ban on expansion prevented him from turning a profit or earning good returns for his shareholders - only that it put a limit on his sense of self-importance. So McColl and his banking minions set out to break down the interstate banking laws. First, in 1981, they used a legal loophole in Florida law to buy a bank branch there - evading the federal ban on out-of-state owners. Then, following a Supreme Court decision in 1985 that allowed banks to cross state lines within a designated region, he and Crutchfield went on a conquering spree worthy of a Mongol horde, buying up a host of banks in other Southern states. McColl, a silver-haired ex-Marine who would eventually be celebrated for bringing a "military approach" to his business, went to ridiculous lengths to play up the manly conquest aspect of his bank's merger frenzy, rewarding key employees with crystal hand grenades. By 1995, McColl had acquired more than 200 banks and thrifts across the South, while Crutchfield had snapped up 50.

A few years later, after Congress repealed most of the barriers to interstate banking, McColl took over Bank of America, realizing his dream of creating what one trade publication called "the first ocean-to-ocean bank in the nation's history." Later, after McColl retired, his successors kept up his acquisitive legacy, buying notorious mortgage lender Countrywide Financial in 2008, and using some of the $25 billion in federal bailout funds they received to acquire dying investment bank Merrill Lynch. Both firms were infamous for their exotic gambles and their systematic cutting of regulatory corners - meaning that the shopping spree had burdened Bank of America with a huge portfolio of doomed trades and criminal conspiracies.

But to McColl, it was all worth it - because he would never have been important if he hadn't also been big. "I have no regrets about building it large," he said in 2010, when asked if he considered all the monster consolidations a mistake in light of the crash of 2008. "I may have some regrets about not building it larger."

This deeply American terror of not always having the absolutely hugest dick in the room is what put us in the inescapable box called Too Big to Fail. When the bailouts were dreamed up to save Bank of America, the government was essentially committing public resources to preserve this lunatic spending spree - which means two successive presidential administrations have now spent nearly half a decade and hundreds of billions of tax dollars defending the premise that Hugh McColl should always be allowed to have the "taller one."

And why? The rationale for allowing that merger spree in the first place was based on a phony assumption: that big banks would somehow be more efficient and more profitable than small ones. "The whole premise of a Citibank or a Chase or a Bank of America is wrongheaded," says Susan Webber, an analyst who writes one of the most popular and respected financial blogs under the pseudo­nym Yves Smith. "Studies consistently show that after a certain size threshold, bank efficiency taps out. In fact, it turns out that all those cost savings the banks were supposed to enjoy from being bigger were actually based on cutting corners and fraud."

And man, what a lot of fraud!

In the end, it all comes back to mortgages. Though Bank of America would ultimately be charged with committing a dizzyingly diverse variety of corporate misdeeds, the bulk of the trouble the bank is in today arises from the Great Mortgage Scam of the mid-2000s, which caused the biggest financial bubble in history.

The shorthand version of the scam is by now familiar: Banks and mortgage lenders conspired to create a gigantic volume of very risky home loans, delivering outsize mortgages to dubious borrowers like immigrants without identification, the unemployed and people with poor credit histories. Then the banks took those dicey home loans and sprinkled them with bogus math, using inscrutable financial gizmos like collateralized mortgage obligations to rechristen the risky home loans as high-grade, AAA-rated securities that could be sold off to unions, pensioners, foreign banks, retirement funds and any other suckers the banks could find. In essence, America's financial institutions grew vast fields of cheap oregano, and then went around the world marketing their product as high-grade weed.

The holy trinity of Bank of America, Countrywide and Merrill Lynch represented the worst conceivable team of financial powers to get hold of this scam. It was a little like the Wall Street version of Michael Bay's nonclassic Con Air, in which the world's creepiest serial killer, most demented terrorist and most depraved redneck are all thrown together on the same plane. In this case, it was the most careless mortgage lender (the spray-tanned huckster Angelo Mozilo from Countrywide, who was named the second-worst CEO of all time by Portfolio magazine), the most dangerous mortgage gambler (Merrill, whose CEO was the self-worshipping jerkwad John Thain, the ex-Goldman banker who bought himself an $87,000 area rug as his company was cratering in 2008) and the most relentless packager of mortgage pools (Bank of America), all put together under one roof and let loose on the world. These guys were so corrupt, they even shocked one another: According to a federal lawsuit, top executives at Countrywide complained privately that Bank of America's "appetite for risky products was greater than that of Countrywide."

The three lenders also pioneered ways to sell their toxic pools of mortgages to suckers. Bank of America's typical marketing pitch to a union or a state pension fund involved a double or even triple guarantee. First, it promised, in writing, that all its loans had passed due diligence tests and met its high internal standards. Next, it promised that if any of the loans in the mortgage pool turned out to be defective or in default, it would buy them back. And finally, it assured customers that if all else failed, the pools of mortgages were all insured, or "wrapped," by bond insurers like AMBAC and MBIA.

It sounded like a can't-lose deal. Not only did the bank offer a written guarantee of the high quality of the loans it was selling, it also promised to buy back any bad loans, which were often insured to boot. What could go wrong?

As it turned out, everything. From tits to toes, the mortgage pools created, packaged and sold by Countrywide, Merrill Lynch and Bank of America were a complete sham: worthless and often falling apart virtually from the day they were delivered.

First of all, despite the fact that the banks had promised that all the loans in their pools met their internal lending standards, that turned out to be completely untrue. An SEC­ investigation later found out, for instance, that Countrywide essentially had no standards for whom to lend to. As a federal judge put it, "Countrywide routinely ignored its official underwriting guidelines to such an extent that Countrywide would underwrite any loan it could sell." Translation: Countrywide gave home loans to anything with a pulse, provided they had a sucker lined up to buy the loan.

How did they make these loans in the first place? By committing every kind of lending fraud imaginable - particularly by entering fake data on home loan applications, magically turning minimum-wage janitors into creditworthy wage earners. In 2006, according to a report by Credit Suisse, a whopping 49 percent of the nation's subprime loans were "liar's loans," meaning that lenders could state the incomes of borrowers without requiring any proof of employment. And no one lied more than Countrywide and Bank of America. In an internal e-mail distributed in June 2006, Countrywide's executives worried that 40 percent of the firm's "reduced documentation loans" potentially had "income overstated by more than 10 percent... and a significant percent of those loans would have income overstated by 50 percent or more."

"What large numbers of Countrywide employees did every day was commit fraud by knowingly making and approving loans they knew borrowers couldn't repay," says William Black, a former federal banking regulator. "To do so, it was essential that the loans be made to appear to be relatively less risky. This required pervasive documentation fraud."

So what happened when institutional investors realized that the loans they had bought from Countrywide were nothing but shams? Instead of buying back the bad loans as promised, and as required by its own contracts, the bank simply refused to answer its phone. A typical transaction involved U.S. Bancorp, which in 2005 served as a trustee for a group of investors that bought 4,484 Countrywide mortgages for $1.75 billion - only to discover their shiny new investment vehicle started throwing rods before they could even drive it off the lot. "Soon after being sold to the Trust," U.S. Bancorp later observed in a lawsuit, "Countrywide's loans began to become delinquent and default at a startling rate." The trustees hired a consultant to examine 786 loans in the pool, and found that an astonishing two-thirds of them were defective in some way. Yet, confronted with the fraud, Countrywide failed to repurchase a single loan, offering "no basis for its refusal."

And what about that ostensible insurance that Bank of America sold with its bundles of mortgages? Well, those policies turned out not to be worth very much, since so many of the loans defaulted that they blew the insurers out of business. If you went bust buying bad mortgages from Bank of America, chances are, so did your insurer. At best, you two could now share a blanket in the poorhouse.

Many of the nation's largest insurers, in fact, are now suing the pants off Bank of America, claiming they were fraudulently induced to insure the bank's "high lending standards." AMBAC, the second-largest bond insurer in America, went bankrupt in 2010 after paying out some $466 million in claims over 35,000 Countrywide home loans. After analyzing a dozen of the mortgage pools, AMBAC found that a staggering 97 percent of the loans didn't meet the stated underwriting standards. That same year, the Association of Financial Guaranty Insurers, a trade group representing firms like AMBAC, told Bank of America that it should be repurchasing as much as $20 billion in defective mortgages.

Some of these institutional investors were at least partial accomplices to their own downfall. In the boom era of easy money, financial professionals everywhere were chasing the lusciously high yields offered by these bundles of subprime mortgages, and everyone knew the deals weren't exactly risk-free. But ultimately, Bank of America was knowingly selling a defective product - and down the road, that product was bound to blow up on somebody innocent. "A teacher or a fireman goes to work and saves money for their retirement via their pensions," says Manal Mehta, a partner at the hedge fund Branch Hill Capital who spent two years researching Bank of America. "That pension fund buys toxic securities put together by Wall Street that were designed to fail. So when that security blows up, wealth flows directly from that pension fund into the hands of a select few."

This is the crossroads where Bank of America now lives - trying to convince the government to allow it to remain in business, perhaps even asking for another bailout or two, while it avoids paying back untold billions to all of the institutional customers it screwed, the list of which has grown so long as to almost be comical. Last year, the bank settled with a group of pension and retirement funds, including public employees from Mississippi to Los Angeles, that charged Bank of America and Merrill with misrepresenting the value of more than $16 billion in mortgage-backed securities. In the end, the bank paid only $315 million.

In the first half of last year, Bank of America paid $12.7 billion to settle claims brought by defrauded customers. But countless other investors are still howling for Bank of America to take back its counterfeit product. Allstate, the maker of those reassuring Dennis Haysbert-narrated commercials, claims it got stuck with $700 million in defective mortgages from Countrywide. The states of Iowa, Oregon and Maine, as well as the United Methodist Church, are suing Bank of America over fraudulent deals, claiming hundreds of billions in collective losses. And there are similar lawsuits for nonmortgage-related securities, like a revolting sale of doomed municipal securities to the state of Hawaii and Maui County. In that case, Merrill Lynch brokers allegedly dumped $944 million in auction-rate securities on the Hawaiians, even though the brokers knew that the auction-rate market was already going bust. "Market is collapsing," a Merrill executive named John Price admitted in an internal e-mail, before joking about having to give up pricey dinners at a fancy Manhattan restaurant. "No more $2K dinners at CRU!!"

In the end, says Mehta, Bank of America's fraud resulted in "one of the biggest reverse transfers of wealth in history - from pensioners to financiers. What the 99 percent should understand is that Wall Street knowingly inflated the bubble by engaging in rampant mortgage fraud - and then profited from the collapse of their own exuberance by devising a way to shift the losses to countless pension funds, endowments and other innocent investors." The assembled worldwide collection of swindled pensioners and unions and investors is a little like the crowd that storms the basketball court in the Will Ferrell movie Semi-Pro when the home team's owner welshes on his promise to hand out free corn dogs if the score tops 125 points. Corn dogs, Bank of America! Where are the freaking corn dogs!

Incredible as it sounds, owing practically everyone in the world billions of dollars apiece is only half of Bank of America's problem. The bank didn't just flee the scene of its various securities rip-offs. It also made a habit out of breaking the law and engaging in ethical lapses on a grand scale, all over the globe. Once your money ends up in their pockets, they just slither off into the night, no matter their legal or professional obligations.

Case in point: With all those hundreds of thousands of mortgages the bank bought, it simply stopped filing basic paperwork - even the stuff required by law, like keeping chains of title. A blizzard of subsequent lawsuits from pissed-off localities reveals that the bank used this systematic scam to avoid paying local fees. Last year, a single county - Dallas County in Texas - sued Bank of America for ducking fees since 1997. "Our research shows it could be more than $100 million," Craig Watkins, the county's district attorney, told reporters. Think of that next time your county leaves a road unpaved, or is forced to raise property taxes to keep the schools open.

But the lack of paperwork also presented a problem for the bank: When it needed to foreclose on someone, it had no evidence to take to court. So Bank of America unleashed a practice called robo-signing, which essentially involved drawing up fake documents for court procedures. Two years ago, a Bank of America robo-signer named Renee Hertzler gave a deposition in which she admitted not only to creating as many as 8,000 legal affidavits a month, but also to signing documents with a fake title.

Yet here's how seriously fucked the financial markets are: Even the most vocal critics of Bank of America consider the mass, factory-style production of tens of thousands of fake legal documents per month not that big a deal. "Robo-signing is like focusing on Bernie Madoff's accountant," quips April Charney, a well-known foreclosure lawyer who has spent large chunks of the past two decades in battle with Bank of America.

Robo-signing is not the disease - it's a symptom of Bank of America's entire attitude toward the law. A bank that's willing to commit whole departments to inventing legal affidavits might also, for instance, intentionally ding depositors with bogus overdraft fees. (A class action suit accused Bank of America of heisting some $4.5 billion from its customers this way; the bank settled the suit for a mere 10 cents on the dollar.)

Or it might give up trying to win government contracts honestly and get involved with rigging municipal bids - a mobster's crime, for which the accused used to do serious time, back when the bids were for construction and garbage instead of municipal bonds, and the defendants were Eye-talians in gold chains instead of Ivy Leaguers in ties and Chanel glasses. We now know that Bank of America routinely conspired with other banks to make sure it paid low prices for the privilege of managing the moneys of various cities and towns. If the city of Baltimore or the University of Mississippi or the Guam Power Authority issued bonds to raise money, the bank would huddle up with the likes of Bear Stearns and Morgan Stanley and decide whose "turn" it was to win the bid. Bank of America paid a $137 million fine for its sabotage of the government-contracting process - and in an attempt to avoid prosecution, it applied to the Justice Department's corporate leniency program, essentially confessing its criminal status: As plaintiff attorneys noted, the application "means that Bank of America is an admitted felon." Think about that when you hear about all the bailouts the bank has gotten in the past four years. A street felon who gets out of jail can't even vote in some states - and yet Bank of America is allowed to receive billions in federal aid and dominate the electoral process with campaign contributions?

Some of the bank's other collusive schemes are even more ambitious. Last year, the bank was sued, alongside some of its competitors, for conspiring to rig the London Interbank Offered Rate. Many adjustable-rate financial products are based on LIBOR - so if the big banks could get together and artificially lower the rate, they would pay out less to customers who bought those products. "About $350 trillion worth of financial products globally reference LIBOR," says one antitrust lawyer familiar with the case. "Which means," she adds in a striking understatement, "that the scale of this conspiracy is extremely large."

What's most striking in all of these scams is the corporate culture of Bank of America: These guys are just dicks. Time and again, they go out of their way to fleece their own customers, without a trace of remorse. In classic con-artist behavior, Bank of America even tried to rip off homeowners a second time by gaming President Obama's HAMP program, which was designed to aid families who had already been victimized by the banks. In a lawsuit filed last year, homeowners claim they were asked to submit a mountain of paperwork before receiving a modified loan - only to have the bank misplace the documents when it was time to pay up. "The vast majority tell us the same thing," says Steve Berman, an attorney for the plaintiffs. "Bank of America claims to have lost their paperwork, failed to return phone calls, made false claims about the status of their loans and even took actions toward foreclosure without informing homeowners of their options." The scheme allowed the bank to bleed struggling homeowners for a few last desperate months by holding out the carrot of federal aid they would never receive.

Even when caught red-handed and nailed by courts for behavior like this, Bank of America has remained smugly unrepentant. As part of an $8.4 billion settlement it entered into with multiple states over predatory lending practices, the bank agreed to provide homeowners with modified loans and promised not to raise rates on borrowers. But no sooner was the deal signed than the bank "materially and almost immediately violated" the terms, according to Nevada Attorney General Catherine Cortez Masto. It not only jacked up rates on homeowners, it even instituted a policy punishing any bank employee who spent more than 10 minutes helping a victim get a loan modification.

The bank's list of victims goes on and on. The disabled? Just a few weeks ago, the government charged Bank of America with violating the Fair Housing Act by illegally requiring proof of disability from people who rely on disability income to make their mortgage payments. Minorities? Last December, the bank settled with the Justice Department for $335 million over Countrywide's practice of dumping risky subprime loans on qualified black and Hispanic borrowers. The poor? In South Carolina, Bank of America won a contract to distribute unemployment benefits through prepaid debit cards - and then charged multiple fees to jobless folk who had the gall to withdraw their money from anywhere other than a Bank of America ATM. Seriously, who hasn't this bank conspired to defraud? Puppies? One-eyed Sri Lankans?

Bank of America likes to boast that it has changed its ways, replacing many of the top executives who helped create the mortgage bubble. But the man promoted from within to lead the new team, CEO Brian Moynihan, is just as loathsome and tone-deaf as his previous bosses. As befits a new royal, Moynihan defended a plan to gouge all debit-card users with $5 fees by citing his divine privilege: "We have a right to make a profit." And despite the bank's litany of crimes, Moynihan seems to think we're just overreacting. After all, he gives to charities! "I get a little incensed when you think about how much good all of you do, whether it's volunteer hours, charitable giving we do, serving clients and customers well," he told employees last October. Then, addressing would-be protesters: "You ought to think a little about that before you start yelling at us."

In sum, Bank of America torched dozens of institutional investors with billions in worthless loans, repeatedly refused to abide by contractual obligations to buy them back, evaded hundreds of millions in local fees and taxes, pushed tens of thousands of people into foreclosure using phony documents, ignored multiple court orders to stop its illegal robo-signing, and exploited President Obama's signature mortgage-relief program. The bank fixed the bids on bonds for schools and cities and utilities all over America, and even conspired to try to game the game itself - by fixing global interest rates!

So what does the government do about a rogue firm like this, one that inflates market-wrecking bubbles, commits mass fraud and generally treats the law like its own personal urinal cake? Well, it goes without saying that you rescue that "admitted felon" at all costs - even if you have to spend billions in taxpayer money to do it.

Bank of America should have gone out of business back in 2008. Just as the mortgage market was crashing, it made an inconceivably stupid investment in subprime mortgages, acquiring Countrywide and the billions in potential lawsuits that came with it. "They tried to catch a falling knife and lost their hand and foot in the process," says Joshua Rosner, a noted financial analyst. It then spent $50 billion buying a firm, Merrill Lynch, that was rife with billions in debts. With those two anchors on its balance sheet, Hugh McColl's bicoastal dream bank should have gone the way of the dinosaur.

But it didn't. Instead, in the midst of the crash, the government forked over $45 billion in aid to Bank of America - $20 billion as an incentive to bring its cross-eyed bride Merrill Lynch to the altar, and another $25 billion as part of the overall TARP bailout. In addition, the government agreed to guarantee $118 billion in Bank of America debt.

So what did the bank do with that money? First, it sat by while lame-duck executives at Merrill paid themselves $3.6 billion in bonuses - even though Merrill lost more than $27 billion that year. In all, 696 executives received more than $1 million each for helping to crash the storied firm. (The bank wound up hit with a $150 million fine for its failure to inform shareholders about the Merrill losses and bonuses.) Bank of America, meanwhile, paid out more than $3.3 billion in bonuses to itself, including more than $1 million each to 172 executives.

In fact, the real bailouts of Bank of America didn't even begin until well after TARP. In the years since the crash, the bank has issued more than $44 billion in FDIC-insured debt through a little-known Federal Reserve plan called the Temporary Liquidity Guarantee Program. The plan essentially allows companies whose credit ratings are fucked to borrow against the government's good name - and if the loans aren't paid back, the government is on the hook for all of it. Bank of America has also stayed afloat by constantly borrowing billions in low-­interest emergency loans from the Fed - part of $7.7 trillion in "secret" loans that were not disclosed by the central bank until last year. When the data was finally released, we found out that, on just one day in 2008, Bank of America owed the Fed a staggering $86 billion.

That means that when you take out a credit card or a mortgage or a refinancing from Bank of America, you're essentially borrowing from the state; the "private" bank is simply taking a cut as a middleman. "For banks, the cost of capital is the key to success," says former New York governor Eliot Spitzer. "So by lowering their cost of capital to almost zero, the Fed has almost guaranteed that the banks will make big profits."

Another public lifeline is Fannie Mae and Freddie Mac, the giant, nationalized mortgage lenders. Need to make some cash? Toss a bunch of home loan applications onto a city street, then sell the resulting mortgages to Fannie and Freddie, which are basically a gigantic pile of public money guarded by second-rate managers. Just like the state pensions in Iowa and Maine and Missis­sippi, Fannie and Freddie were targeted for sales of toxic mortgages, and just like those entities, they have sued Bank of America, claiming they were suckered into buying more than $30 billion in shitty securities. But unlike those other suckers, Fannie and Freddie continued to buy crap loans from Bank of America even after it was clear they'd been hoodwinked. Last year, the bank created more than $156 billion in mortgages - nearly $38 billion of which were bought by Fannie. Having the government as an ever-ready customer, standing by to buy mortgages at full retail prices, has always been an ongoing hidden bailout to the banks.

But even the government has its limits. In February, Fannie announced it would no longer keep blindly buying mortgages from Bank of America. Why? Because the bank, already slow to buy back its defective mortgages, had gotten even slower. By the end of last year, the government reported, more than half of all the crappy loans that Fannie wanted to return came from a single bad bank - Bank of America.

But if you think that Fannie cutting off the bank is good news, think again. If it can't get the money it's owed from Bank of America, it'll just go begging to the Treasury. Fannie has already asked for $4.5 billion to cover losses this year - and if Bank of America doesn't pony up, it'll have to reach even deeper into our pockets, making for yet another shadow bailout to the firm.

It gets worse. Last fall, some of the bank's biggest creditors and counterparties started to get nervous about the mountain of toxic bets still sitting on Merrill Lynch's books - a generation of ill-considered, complex, exotic derivative trades, bets on bets on bets on shaky subprime mortgages, sitting there on the company balance sheet, waiting to explode. Nobody felt good lending Bank of America money with that dangerous shitpile lying there. So they asked the bank to move a chunk of that mess from Merrill Lynch onto Bank of America's own balance sheet. Why? Because Bank of America is a federally insured depository institution. Which means that the FDIC, and by extension you and me, is now on the hook for as much as $55 trillion in potential losses. Black, the former regulator, calls the transfer an "obscenity. As a regulator, I would have never allowed it. Transferring risk to the insured institution crosses the reddest of red lines."

But by far the biggest bailout to Bank of America has come via the sweetheart deals it cut to settle the massive lawsuits filed against it. Some of the deals, which were brokered by the Justice Department and state attorneys general, allowed the bank to get away with paying pennies on the dollar on its mountains of debt. Worst of all was the recent $26 billion foreclosure settlement involving Bank of America and four other major firms. The deal, in which the banks agreed to pay cash to screwed-over homeowners in exchange for immunity from federal prosecution on robo-signing issues, was hailed as a big multibillion-dollar bite out of the banks. President Obama was all but strutting over his beatdown of Wall Street. "We are Americans, and we look out for one another; we get each other's backs," he declared. "We're going to make sure that banks live up to their end of the bargain."

In fact, the government has a lousy track record when it comes to enforcing settlements. The foreclosure deal arrives on the heels of an $8.4 billion investor settlement, whose provisions Bank of America had already been accused of violating, raising rates and abusing homeowners as soon as the deal was struck. The bank also violated a previous settlement with the Federal Trade Commission, illegally slapping $36 million in fees on struggling homeowners after specifically agreeing not to do so. So Bank of America's reward for blowing off its previous settlements for mistreating homeowners was to get another soft-touch deal from the government, which they will presumably be just as free to ignore. Why? Because while state officials have ultimate enforcement authority over the foreclosure settlement, the early enforcement reviews will be handled by "internal quality control groups." In other words, Bank of America itself will be grading its own compliance!

Even if Bank of America coughs up its share of the $26 billion settlement, the deal is woefully inadequate to address the wider fraud that went on in creating and pooling mortgages. "It's like handing a box of tissues to someone whose immune system has been destroyed by AIDS," says Rosner. "It doesn't come close to addressing the scale of the problem." Many Wall Street observers think that without the waiver from federal prosecution provided by the settlement, Bank of America would have faced billions in lawsuits for robo-signing offenses alone.

Oh, and one more thing, since we're talking about avoiding bills: Bank of America didn't pay a dime in federal taxes last year. Or the year before. In fact, they got a $1 billion refund last year. They claimed it was because they had pretax losses of $5.4 billion in 2010. They paid out $35 billion in bonuses and compensation that year. You do the math.

And here's the biggest scam of all: After all that help - all the billions in bailouts, the tens of billions in Fed loans, the hundreds of billions in legal damages made to disappear, the untold billions more of unpaid bills and buybacks - Bank of America is still failing. In December, the bank's share price dipped below $5, and after being cut off by Fannie in February, the bank announced a truly shameless plan to jack up fees for depositors by as much as $25 a month - what one market analyst called a "measure of last resort."

The company reported positive earnings last year, with net income of $84 million, but analysts aren't convinced. David Trainer, a MarketWatch commentator, switched his rating of Bank of America to "very dangerous" in part because its accounting is wildly optimistic. Among other things, the bank's projections assume a growth rate of 20 percent every year for the next 18 years. What's more, the bank has set aside only $8.5 billion for buybacks of those crap corn-dog loans from enraged customers - even though some analysts think the number should be much higher, perhaps as high as $27 billion. Because more lawsuits are so likely, says Mehta, it's "virtually impossible to decipher if Bank of America requires more equity, or even another tax­payer bailout."

But the only number that really matters is this one: $37 billion. That's the total bonus and compensation pool this broke-ass, state-dependent, owing-everybody-in-sight bank paid out to its employees last year. This, in essence, is the business model underlying Too Big to Fail: massive growth based on huge volumes of high-risk loans, coupled with lots of fraud and cutting corners, followed by huge payouts to executives. Then, with the company on the verge of collapse, the inevitable state rescue. In this whole picture, the only money that's ever "real" is the fat bonuses the executives cash out of the bank at the end of each year. "Fraud is a sure thing," says Black. "The firm fails, unless it is bailed out, but the controlling officers walk away wealthy."

The Dodd-Frank financial reform approved by Congress last year was supposed to fix the problem of Too Big to Fail, giving the government the power to take over and disband troubled megafirms instead of bailing them out. "The way to cut our Gordian financial knot is simple," MIT economist Simon Johnson wrote in The New York Times. "Force the big banks to become smaller." But few in the financial community believe that will ever happen. "If Bank of America crashes, the first thing that would happen is Dodd-Frank would be revealed as a fraud," says Rosner. "The Fed and the Treasury would ask Congress for a bailout to 'save the economy.' It's the worst-kept secret on Wall Street."

In a pure capitalist system, an institution as moronic and corrupt as Bank of America would be swiftly punished by the market - the executives would get to loot their own firms once, then they'd be looking for jobs again. But with the limitless government support of Too Big to Fail, these failing financial giants get to stay undead forever, continually looting the taxpayer, their depositors, their shareholders and anyone else they can get their hands on. The threat posed by Bank of America isn't just financial - it's a full-blown assault on the American dream. Where's the incentive to play fair and do well, when what we see rewarded at the highest levels of society is failure, stupidity, incompetence and meanness? If this is what winning in our system looks like, who doesn't want to be a loser? Throughout history, it's precisely this kind of corrupt perversion that has given birth to countercultural revolutions. If failure can't fail, the rest of us can never succeed.

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+123 # treadlightly 2012-03-16 13:37
I simply could not finish the article. My mind can not compute an answer as to why this abomination is being allowed to continue. The level of damage caused by this criminal conspiracy calls for more that just jail time and fines. They have knocked the foundation out from under the country. Sick homeland security on their asses. That will give them something better to do than harassing the very people whose lives have been turned upside down by these elitist parasites. Excuse me I really need to go puke now.
 
 
+38 # John Locke 2012-03-16 17:34
You should read it all, it makes one consider a real tax revolt. We know the government will keep bailing out these crooks and let US pay for their crimes. The only way to stop this is a tax revolt, just stop paying Income taxes...
 
 
+12 # treadlightly 2012-03-17 07:41
I did finally finish it (John). It's just a little too much poop to eat in one sitting. I have considered your tax revolt suggestion. Just yesterday I visited the IRS website after doing a search for (Tax Evasion) and read the long list of people prosecuted for their failure to pay.
 
 
+8 # Stephanie Remington 2012-03-17 17:30
What's even more outrageous is the somewhat shorter list of corporations who DON'T get prosecuted for their failure to pay.

The consequences of a tax revolt are major for those who don't pay, but it's gotten to the point that we are, essentially, being held up at gunpoint by our government -- bankster bailouts, illegal wars and occupations, corporate tax refunds...

I'd like to see what happens with Cindy Sheehan's refusal to pay. She's got a hearing coming up soon.
 
 
+10 # 666 2012-03-17 18:07
Tread: Even as a hardcore cynic & pessimist, I had the same reaction. I took a break halfway through to avoid vomiting. After I finished reading, I took another break for the same reason. This is only 1 bank! This is just the surface.

The moral of this tale: no matter how bad you think it could be, it's actually far, far worse -- and it will, logically, only get far, far worse.

Now to garner up some negative votes (pollice verso!): If you all want to empower more of this corrupt capitalism, keep voting for the two-party system! Democrat, republican, it won't matter to these folks. Obama wont fix anything, nor will the gops. we all know what the solution is, but we're just going to have to wait for the cosmic toilet bowl to finish flushing.
 
 
-2 # treadlightly 2012-03-19 19:46
Furthermore, the reason this is such an affront to anyone with a conscience is that they do this knowing what the results are going to be. Greed literally kills. People commit suicide and children suffer and on and on. So I went to wikipedia for a definition I was not sure of, here it is. Premeditated murder is usually defined as one of the most serious forms of homicide, and is punished more severely than manslaughter or other types of murder - often with the death penalty or a life sentence without the possibility of parole.
 
 
+3 # RLF 2012-03-18 06:55
Problem is that most people are wage slaves and this tool has been taken out of their hands. They receive a check with the taxes already gone...clever those guys protecting the status quo, eh?
 
 
0 # dkonstruction 2012-03-22 11:00
unfortunately for most of us "wage slaves" this is not an option as our taxes are automatically deducted from our paychecks before we ever get a penny (which the repubs then dishonestly use to say that most of us don't pay "income" taxes because they don't consider "payroll" taxes as "income" taxes...i agree with the sentiment though
 
 
+83 # Barbara K 2012-03-16 14:15
Too big to fail? They should be too big to STAND!!! They need to be brought down and now. Why isn't it being done?
 
 
+22 # Stephanie Remington 2012-03-16 18:57
Because Obama has tremendous pressure on him from the banks to do as they please and he knows he has a large group of people who will support him no matter what he does. All the pressure that could be placed on him to go after these banks is instead focused on silencing those of us with legitimate criticisms of his policy choices.

He has no incentive to do anything differently.
 
 
+10 # Observer 47 2012-03-16 21:11
Exactly so, Stephanie. As long as the banksters are filling the coffers of his SuperPAC, Obama will continue to let them call the tune.
 
 
+105 # MEBrowning 2012-03-16 14:23
Ron Paul and other libertarians would have you believe that corporate giants such as BofA can regulate themselves. If this isn't the quintessential example of the naïveté of such thinking, I don't know what is.
 
 
+16 # Martintfre 2012-03-16 16:50
Quoting MEBrowning:
Ron Paul and other libertarians would have you believe that corporate giants such as BofA can regulate themselves. If this isn't the quintessential example of the naïveté of such thinking, I don't know what is.



actually Ron Paul said let them die - he also said many years before they crashed that our government policies of promising to bail them out created a moral hazard where they don't have to be responsible cause the government would (and did) bail em out.
 
 
+3 # tonenotvolume 2012-03-17 01:44
Please provide evidence.
 
 
+4 # Martintfre 2012-03-17 07:39
Ron Predict housing bubble to fall.
http://www.youtube.com/watch?v=mnuoHx9BINc

2002 house floor - we rebuild Palistin - Afghanistan, war in the middle east, we will attack Iraq ... erosion of civil liberties, war rhetoric used to justify bigger government, we citizens will be worse off, lobbiest will thrive.

http://www.youtube.com/watch?v=ifJG_oFFDK0
 
 
+3 # Martintfre 2012-03-17 08:36
Ron ON the Banking scandals - the politician/corp orate cooperation to screw the little guy
http://www.youtube.com/watch?v=36UGFOeJVww
 
 
+6 # John Locke 2012-03-16 17:36
To be in control of a bank is like having a license to steal, they know the government will never take them to task...Obama forced the state attorneys general to settle with the banks, he twisted their arms... Why? Money!
 
 
+10 # Nominae 2012-03-16 22:51
Quoting MEBrowning:
Ron Paul and other libertarians would have you believe that corporate giants such as BofA can regulate themselves. If this isn't the quintessential example of the naïveté of such thinking, I don't know what is.


@ MEBrowning

Then, obviously, "Ron Paul and other libertarians" need to be introduced to the concept of examining the relative "wisdom" of literally hiring the fox to guard the hen house .....

Trying to rationalize this, or the actions of other massive corporations simply requires the dissemination of relentlessly aggressive ignorance at it's most pernicious.

"Defense" arguments on behalf of banks and Mega-corporatio ns only sound lazy, ignorant and empty. Behind these inane and transparent "justifications " i.e, "Two big to fail" lurk perpetrators who know EXACTLY what they are doing.

Not only are they not at all "stupid", they are getting away with the greatest Treasury-draini ng scam in World History. When it's over, they can successfully argue that "government" doesn't work .......

Give credit where credit is due ... this coup has been patiently and relentlessly carried out over at least the past three decades.

So far the only "opposition" the perpetrators have incurred is the cursing, castigation, and name calling from the left. Pretty easy "penalty" to pay for the size of the looted booty !
 
 
+1 # Martintfre 2012-03-17 10:44
//Then, obviously, "Ron Paul and other libertarians" need to be introduced to the concept of examining the relative "wisdom" of literally hiring the fox to guard the hen house ..... //

As PJ ORoark observed - when CONgress controls buying and selling the first thing to be bought and sold IS CONgress.


When you use government to 'regulate' industries inevitability they get in bed and mutually assist each other at the expense of every one else (see Bushes or Obama's closes 'friends' both in contributions and positions granted in power).

The banking failure was a predictibal failure becasue government created a moral hazard with the promised to bail out bankers if they did certain things - the bankers did and so did the politicians used our money and our debt to bail them out when they inevitability failed.

This is what Paul and Libertarians such as my self rail against. It is NOT capitalism that tells banks what to and what no to do then bails them out -- that is Fascism.
 
 
+1 # CTPatriot 2012-03-22 09:36
So you're solution is no regulation? First of all, O'Rourke's quote is just that. A quote. It's not, however, based in fact. Because thanks to government regulation of industry, we have safe and clean drinking water and a relatively safe food supply just to name a couple of things.

The society that you and other idealist libertarians is unworkable in the real world. It relies on corporations, which exist solely to make a profit, to always do the right thing for fear of being punished by consumers if they do the wrong thing. Only that punishment may not happen until decades after the fact with who knows how many injuries and deaths occurring as a result of the corporate malfeasance in the meantime.

Government regulations are we the people's way of trying our best to prevent harm before it happens. Yes, it's a fact that corporations will then try and control the government regulators so that they can avoid oversight. The solution is not to end government or regulation. It's to end corruption.

But, really, it's not so much about regulation with libertarians as it is about selfishness and personal greed. None of you like the idea of paying taxes and therefore hope to create some utopian society where people somehow can do whatever the hell they want and not worry about the impact their actions have on others, at least not until they've killed a million or two.
 
 
-1 # dkonstruction 2012-03-22 11:18
Martintfre, if the government created moral hazard argument is true, then what was the moral hazard in 1929? And was not the current moral hazard created by deregulation (i.e., doing away with glass-steagall) ? And, while capitalism may not "tell" the banks what and what not to do financial crises/collapse is endemic to how the system functions and has done so for at least 500 years as Giovanni Arrighi shows in his important work "The Long Twentieth Century." And, as Michael Perelman documents in his books "The Invention of Capitalism" and "Railroading Economics" the capitalist "free market" is a complete myth and has never existed and so American economic libertarianism is a mythic ideology that winds up supporting the worst aspects and abuses of corporate capitalism.
 
 
+52 # Patriot 2012-03-16 15:07
Hope you, dear readers, are no longer giving your money to Bank of America to hold or invest, or using one of their credit cards.

Join a Credit Union. Credit Union members also are Credit Union owners, which means that you will nt see in their annual reprts milltion-dollar bonuses to anyone, just dividends and interest paid to member-owner-shareholders.

If you can do so, join Navy Federal, the biggest, one of the oldest, and always the best.

(a thirty-year credit union member)

"Fool me once: Shame on you. Fool me twice: Shame on ME!"
 
 
+27 # DLT888 2012-03-16 15:07
EVIL, that's what it is. PURE EVIL.
 
 
+53 # paulrevere 2012-03-16 15:08
Matt, you are a hero of mine...your humor, your decisive research and your abilities to tie it all into a coherant presentation deserve no less than the highest accolades of your profession!!
 
 
+20 # Muffy787 2012-03-16 21:15
Matt is the best, he delves into these
"stories" like nobody else. I never miss his articles, keep up the good work, wish we had more like you!!!
 
 
+47 # tomhanigan@gmail.com 2012-03-16 15:10
Matt Taibbi just knocked a line-drive home run out of the park! I'm meeting him at home plate to lift him on my shoulders.
 
 
+37 # Doctoretty 2012-03-16 15:15
President Obama; If I vote for you again, will you please can Geithner and Summers and get some people who will not look the other way at these terrible crimes against us???
 
 
+10 # dick 2012-03-16 15:36
Here's the perfect opportunity for Obama to use his sought after Stalinist detention powers, on economic terrorists. No wonder Dems want us focused on T-Party. Their bankster buddies are looting EVERYTHING. Obama is letting them push us toward the brink, again.
Seriously, how can Obama supporters defend, or even swallow, his protection of the most destructive domestic enemy in a hundred years? It's almost impossible that McCain could have done worse. What's less than zero? LET Dems KNOW you're mad as hell & not going to take being taken for granted anymore. We're enabling Obama-AIG-BofA- GSachs.
 
 
+38 # erogers 2012-03-16 15:49
This country started down the road to hell when banks were allowed to become so large, allowed to cross over state lines and deregulated with the laws put in place after the Great Depression removed. This is the result; the criminal enterprises of B of A and others. Also, a piece of history. It was B of A which in the 1950s brought Americans that notorious revolving line of credit called Visa. Time to break up the major banks, get back to the basics of banking and away from these casinos.
 
 
+17 # Martintfre 2012-03-16 15:53
First If you really care about getting the guilty party - you have to go after the fascist politicians who promised to bail them out when they failed and indeed did bail them out when they failed.
 
 
+36 # anntares 2012-03-16 15:57
In "Wealth & Democracy", Kevin Phillips shows the pattern of three past empires that collapsed when the elites became so greedy and self-protective that they grabbed too large a share of resources, infuriating their own people to the point of rebellion, and launched unnecessary wars for more resources that drained off their wealth and shifted power to the next empire.
 
 
+3 # treadlightly 2012-03-17 07:21
Exactly right..History IS repeating itself here. We are following exactly the course of the mighty Roman Empire.
 
 
+27 # moby doug 2012-03-16 16:03
At the very least the government should have installed interim, gov't appointed, CEO's of all the banks it propped up with taxpayer trillions after the bust of Fall 08. But because the banks control the federal gov't, I guess the gov't appointed CEO's would ALSO have been corrupt. You know, like Sec. of Treasury Henry Paulson, ex-CEO of Golden Sacks, who engineered the no-strings bailout in the first place. Remarkably, Taibbi does not mention ex-Chairman & CEO Ted Lewis of B of A, who was instrumental in disastrous acquisitions like Merrill Lynch AND in fostering BofA's predatory culture. He was forced out, though he took $300 million in loot with him, in 2009.
 
 
+23 # Hey There 2012-03-16 16:15
All that research. Thanks for posting.
It.s galling to know how much money was given to bail out the banks and Wall Street and realize that some Congressmen such as Issa,Collins, Lieberman have sponsored bills to gut Postal Unions by establishing 2 administrations able to override the union contracts.
There's more to this but the video I posted on youtube hits the key points.

http://www.youtube.com/watch?v=09ybkkiH2Ho&list=HL1331936024&feature=mh_lolz
 
 
+24 # jwb110 2012-03-16 17:19
The great unsaid thing is that even those of us who qualified for mortgages, I did and put a required 30%, have suffered as much as the people dealing directly with B of A. The housing market crashed and with it 1/3 of my investment and potentially more. Jobs dried up and it all became more of a hardship.
The whole damned country should be angry with B of A whether they used that bank or not.
 
 
+11 # Connie 2012-03-16 17:38
Thanks for another great article Matt. I like racking up AK Airlines miles, but sure would like to see Alaska Airlines do the right thing and drop the B of A VISA card recommendation for mileage plan members. It might not hurt B of A at all, but it could be quite a statement.
 
 
+15 # elmont 2012-03-16 17:48
Once again, Matt shows his stuff. My absolute favorite journalist.
 
 
+12 # Dave_s Not Here 2012-03-16 18:07
Matt, you are the MAN!
 
 
+8 # Billsy 2012-03-16 18:22
Particularly galling is the way shareholders like myself get left holding the bag for this corrupt lying corp. while the lame executives creating their amoral, destructive policies walk away with millions in compensation. Shoring up financial institutions would be one thing were our govt. also to sieze control of the corp. in turn, fire its incompetent management with zero severance and resell it at profit once in repair. But our govt. is itself so corrupt and out of touch with reality, it only serves the wealthy and powerful at the expense of taxpayers. This coming election is a joke. I'm supporting only trustworthy independent candidates.
 
 
+17 # Grinder Monkey 2012-03-16 18:43
At long last a succinct and dreadfully clear explanation of America's banking crisis. The "cross-eyed bride" is the epic prose Taibi uses to marry this giant zombie whose wedding we will continue to follow until the inevitable divorce.
 
 
+8 # Nominae 2012-03-16 23:04
Quoting Grinder Monkey:
At long last a succinct and dreadfully clear explanation of America's banking crisis. The "cross-eyed bride" is the epic prose Taibi uses to marry this giant zombie whose wedding we will continue to follow until the inevitable divorce.


@ Grinder Monkey

Great post. Taibbi has an unerring instinct for being able to cut through the B.S. and honing in directly on the true heart of a matter that can otherwise be presented as a very complicated subject.

It is to the advantage of the criminals to keep this subject as foggy and difficult to follow as possible. Matt's ability to rob the robbers of that "cover" is what makes Taibbi so much more valuable even than other authors who do not have such a trenchant and incisive gift !

Thank you, Matt, for your contribution to the "good fight".
 
 
+11 # Scott479 2012-03-16 19:33
Banksters credo: "More Than Enough's a Good Place to Start"
 
 
+19 # bostechie 2012-03-16 19:44
Thanks Matt for infuriating me with this great piece of journalism.

Their crimes are revolting beyond the pale of the lowest low life. We'll never know how many victims there are. This is also a form of Amercan Exceptionalism - any other country would have people rioting in the streets - we just sit there take it again and again.
I know sheeple who will not close their account with these scumbags because "they're convenient with all their branches and ATMs".

The next sound you hear is me shaking my head in disgust.
 
 
+18 # reiverpacific 2012-03-16 19:57
Gadzooks, this article is givin' me brain-damage in it's depth -which as a financial twit, I can JUST comprehend; but I appreciate the research and truth-seeking that went into it.
What appalls me is why, in the US at least, we have to rely on a writer for Rolling Stone, a magazine dedicated to the survival of Rock 'n Roll (and a good one too, along with the likes of Playboy and even Vanity Faire which have quite a bit of comprehensive left-oriented, reports as adjuncts to their main themes) for in-depth news.
Is this being screamed out on the owner-media? PBS (especially "Marketplace")? ------Neh!
Interesting how B. of A. and others are now almost exclusively peopled at the branch level by women. Wonder how much they are being paid as opposed to the hidden senior male factor?
I have a good friend who quit another big bank as branch manager because of the demeaning marketing tasks she was required to undertake to earn monthly "points" for her service-worthin ess, as did one of her tellers.
How do you oversee such chicanery and cynicism? Shut the bastards down and take as long as needed to weed the culprits out and prosecute them to the fullest extent of the law.
I mean "big brother" has no problem ganging it's heavy cache of lawyers up on people like Cindy Sheehan, Leonard Peltier, Abu Mumiya Jamal and so many others isolated and victimized by the Federal prosecution machinery.
Are the "too big to be prosecuted" and jailed?
 
 
+4 # KittatinyHawk 2012-03-16 20:25
It should have said part two since it is a second write up on same Bank.

Credit Union were what we all discussed over 6 mths ago and I wonder how many did what they said or use excuses not to have done so.
I was also wondering how many have stayed with Citi, BOA etc and Merrill because again excuses.

The one ones with all the Mortgage Fraud, Foreclosures that still are ignored who made bundles on people who are now homeless, in debt are Realtors.
They deal with, get kick backs from Banks, Mortgage Companies. They should hang just as high. They would and are still doing their sales, promising a better tomorrow.

Sorry but if we are going to bring those to Justice it must be all of those who helped put America in the hole. I am no letting off the Yuppies who had to have it all, ignoring rumours, ignoring facts.
They too would do it all again to keep up with the Bush's, Romneys.

After a while you get to know the phonies, those who actually care enough to do something even if it is a phone call. Vt got people together and now told Dept of Ag in their State...We have the Right to Know what is in Our Food. The push is not over. Amazing what good People can do to make a Change.

Rebuild America Start at home
 
 
+21 # Peace Anonymous 2012-03-16 20:35
How can Obama move when the banking industry is funding half the Democrats. And if Obama lifts the wrong finger he is assaulted in the corporate, mainstream media. The only way he will be ever able to do the right thing with any policy is when he knows, beyond all doubt, that the people of America are standing with him. That means you have to stop watching American Idol and get involved. Sorry. If you want a democracy you have to do your part - get involved or lose it.
 
 
+6 # Willman 2012-03-16 20:45
Willie Sutton was in the wrong business.
 
 
+3 # speedboy 2012-03-17 04:56
The graft and corruption by our Uber-banks and corporate giants is so massive and pervasive that our moromic society has now accepted this as part of the American Dream. When blatan wrongdoing is uncovered, we sternly take the rascals to task by making them promise not to do it again.
 
 
+3 # Activista 2012-03-17 10:02
The bank profit is shifting to Insurance Companies. If I add "NEW" required insurance (4x from 6 years ago) on top of my monthly mortgage it raises my payment by 40%.
Banks shifted the values of falling properties to insurance to protect their "investment". This should be added to mortgage rates and we would be in double digits.
 
 
+3 # Peach14 2012-03-17 20:36
Thank you again, Matt, for an excellent piece of journalism! I truly appreciate your indepth reporting that I can understand. I too have been a victim of the B of A. We have been trying to get the B of A to modify our loan for almost 3 years! We have now hired a lawyer to help us get some answers, but I don't hold out much hope! ANYWAY---
I know Obama is "between a rock and a hard place" AND he OWES the financial sector big-time. I just wish he were the president I thought I voted for.
Couldn't Obama , with his executive powers get someone like Elliot Ness who is a TRULY honest person, give that person the REAL POWER to get these guys? That person would ONLY have to use the laws that are already on the books to take these guys out! NO POLITICS INVOLVED; NO ONE IN THE NEW "UNTOUCHABLES" COULD HAVE ANY CONNECTION TO ANYONE OR ENTITY IN THE POLITICAL OR FINANCIAL SECTOR.
You don't have to say it, I know that is a VERY NAIVE idea. It really is too bad that we as Americans have let this whole thing go so far! When the 99% of us actually decide to DO SOMETHING it would be awesome!
 
 
+4 # Windy126 2012-03-18 10:27
I will vote for Obama on the very outside chance given it will be his last election he will do an about face and start prosecuting these thieves. My only other hope is that I will die before I lose my entire life to someone else's greed.
 
 
+1 # TwainGauge 2012-03-18 12:19
Thank you, thank you, thank you, Matt!
If this doesn't get American's attention, then it is our own fault for not reading it through. My tactic, as a heavy reader of portfolios, "Red Herrings" and public offerings is to download or copy and paste the entire article into a word processor. Then read it thoroughly; at least go to the end and read the summaries.
Look to history; the world including the free world and the UN believed that the USSR was too big to fail. The first institutions to go in their October Revolution in early 20th Century were the banks, insurance companies and land brokers. I do not advocate the overthrow of the government, yet fascist look-alike financial corporations were supposed to have gone out with Mussolini's Italy. RG
 
 
+3 # Tiger Claws 2012-03-19 10:49
Matt Taibbi hit another home run out of the park with the blasphemous Bank of UnAmerica.

There should be 1) a national boycott against this bank 2) customers should pull all their retail accounts 3) a continuation and constant drumbeat of hard hitting articles like Matt's and other journalists to keep the spotlight on these banks 4) keep the heat on all of them . Name names of people in the banks.5) re-elect Obama as the only hope in a second term because all - yes ALL - the Republicans would let the banks continue their plunder.

Lanny Breuer, head of the Criminal Division of Eric Holder's Justice Dept says he is looking deep and wide to find " materiality" to establish proof "beyond" a reasonable doubt that banksters either "knew" or "should have" known they had the "intent" to commit fraud to make a criminal case against bank executives.

Eliot Spitzer would bring cases now if he were still Attorney General of New York.

Contact the Justice Department with your demands for indictments. And keep it up.

Taibbi has been a great resource and help to paint the banks as the criminals they are. And he understands the ins and outs of complicated finance.
 
 
-1 # fredboy 2012-03-21 10:36
The whole banking process seems lame after the Fed dropped and has kept the prime to one percent or less--it's free money! So any band of goofballs can form a bank, get free money from the Fed, and never, ever be prosecuted for anything they do. They more likely will be rewarded.
 

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