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« Andy Xie: "If You Print A Trillion, I'll Print A Trillion" | Main | Desperate Barney Frank Turns To Bailed Out Banks »
Monday
Oct252010

William Black Calls On FDIC To Seize Bank Of America

Updated:  Scroll down for VIDEO - Bill Black with Max Keiser.

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This is a beauty.  Are you listening Sheila Bair.

Bill Black says that the FASB 157 Hour Of Power, and delusion, is over.  Banks are still insolvent.  The Fed is complicit.  Put the banks with the most fraud into government receivership, sack management teams, investigate, find the hidden balance sheet secrets, then prosecute. 

  • "Foreclosure fraud is the only thing standing between banks and Armageddon.  The financial media treats Bank of America as if it were a legitimate bank rather than a "vector" spreading the mortgage fraud epidemic throughout much of the Western world."

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By William K. Black

Foreclose on the Fraudsters, Part 1: Put Bank of America in Receivership

The lenders, officers, and professional that directed, participated in, and profited from the fraudulent loans and securities should be prevented from causing further damage to the victims of their frauds, through fraudulent foreclosures.

The banks that are foreclosing on fraudulently originated mortgages frequently cannot produce legitimate documents... Now, only fraud will let them take the homes. Many of the required documents do not exist, and those that do exist would provide proof of the fraud that was involved in loan origination, securitization, and marketing. This in turn would allow investors to force the banks to buy-back the fraudulent securities. In other words, to keep the investors at bay the foreclosing banks must manufacture fake documents.... Foreclosure fraud is the only thing standing between the banks and Armageddon.

  • The fraudulent CEOs looted with impunity, were left in power, and were granted their fondest wish when Congress, at the behest of the Chamber of Commerce, Chairman Bernanke, and the bankers' trade associations, successfully extorted the professional Financial Accounting Standards Board (FASB) to turn the accounting rules into a farce.
  • The FASB's new rules allowed the banks (and the Fed, which has taken over a trillion dollars in toxic mortgages as wholly inadequate collateral) to refuse to recognize hundreds of billions of dollars of losses. This accounting scam produces enormous fictional "income" and "capital" at the banks. The fictional income produces real bonuses to the CEOs that make them even wealthier. The fictional bank capital allows the regulators to evade their statutory duties under the Prompt Corrective Action (PCA) law to close the insolvent and failing banks.
  • The inflated asset values allow the Fed and the administration to ignore the Fed's massive loss exposure and allow Treasury to spread propaganda claiming that TARP resolved all the problems -- at virtually no cost. 

Donovan claims that we have held the elite frauds accountable -- but we have done the opposite. We have made the CEOs of the largest financial firms -- typically already among the 500 wealthiest Americans -- even wealthier. We have rewarded fraud, incompetence, and venality by our most powerful elites.

If the government does not hold the fraudulent CEOs responsible, who is supposed to stop the epidemic of elite financial fraud?  Obama's answer is the fraudulent CEOs themselves, at a time of their choosing. You can't make this stuff up.

Bank of America chose to purchase Countrywide at a point when it -- and its senior leaders -- were infamous. Bank of America made some of these Countrywide leaders its senior leaders. Yet, Bank of America is not treated as a criminal entity. President Obama, Attorney General Eric Holder, Donovan, and Barr cannot even bring themselves to use the "f" word -- fraud. They substitute euphemisms designed to trivialize elite criminality. The administration officials do not call for Bank of America to be the subject of a criminal investigation. They do not demand that Fannie, Freddie, Ambac, the FHFA, and Pimco file criminal referrals about Countrywide's frauds. They do not demand that Fannie, Freddie, and the Fed refuse to purchase or take as collateral any mortgage instrument from Bank of America. No one at the Harvard Club in New York moves to kick Bank of America's officers out of their club! The financial media treats Bank of America as if it were a legitimate bank rather than a "vector" spreading the mortgage fraud epidemic throughout much of the Western world.

Appointing a receiver for an SDI will be a major undertaking for the FDIC, but it is also well within its capabilities. Contrary to the scare mongering about "nationalizing" banks, receivers are used to returning failed banks to private ownership. Receiverships are managed by experienced bankers with records of competence and integrity rather than the dread "bureaucrats." We appointed roughly a thousand receivers during the S&L and banking crises of the 1980s and early 1990s under Presidents Reagan and Bush.

Here is how it works. A receiver is appointed on Friday. The bank opens for business as normal (from the bank's customers' perspective) on Monday. The checks clear, the ATMs work, and the branches all open. The receiver's managers direct the business operations, find the true facts about the bank's operations, senior managers, and financial condition, recognize the real losses, and make the appropriate referrals to the FBI and the SEC so that the frauds can be investigated and prosecuted.

The receiver is also a well-proven device for splitting up banks that are too large and incoherent by selling units of the business to different bidders who most value the operations.

 

Earlier today:

#

Video:  William K. Black with Max Keiser -- Aired Sep. 12, 2010

Excellent interview.

Bill Black helped send more than 1,000 criminal bankers to jail in the 80's for their part in the $150 billion S&L crisis.  This time around, exactly ZERO fraudsters have been sent to the hooskow in a $6 trillion intergalactic banking blowout. 

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Reader Comments (15)

Oct 24, 2010 at 8:55 PM | Registered CommenterDailyBail
FDIC Called On To Put Bank Of America Into Receivership

http://www.huffingtonpost.com/2010/10/22/fdic-called-on-to-put-ban_n_772535.html
Oct 24, 2010 at 9:01 PM | Registered CommenterDailyBail
http://www.huffingtonpost.com/2010/10/23/fixed-income-credit-card-_n_772922.html

Fixed Income & Credit Card Debt: Why Retirees Are Declaring Bankruptcy
Oct 24, 2010 at 9:02 PM | Registered CommenterDailyBail
Jim Rogers on Thursday called most of the largest U.S. banks “totally bankrupt,” and said government efforts to fix the sector are wrongheaded:

“What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent,” he said. “What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics…

Governments are making mistakes. They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony…. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened.”

http://www.ritholtz.com/blog/2008/12/jim-rogers-banks-bankrupt/
Oct 24, 2010 at 9:46 PM | Unregistered CommenterZ
W.B. ... "If the government does not hold the fraudulent CEOs responsible, who is supposed to stop the epidemic of elite financial fraud? Obama's answer is the fraudulent CEOs themselves, at a time of their choosing. You can't make this stuff up."

Very true. But Obama will not act. Just imagine if someone with deep pockets and connections uncovers evidence concerning Obama. Maybe Bilderberg has it in the vault just in case. They could make him dance to their tune, no problema.
Oct 24, 2010 at 10:01 PM | Unregistered CommenterZ
Huffpo breaking ground on Obama fraud..

http://www.huffingtonpost.com/2010/10/24/snl-harry-reid-birther_n_772982.html

Reid is going down, hope hope. Start the investigations...
Oct 24, 2010 at 10:39 PM | Unregistered CommenterZ
Sounds Like a Great Banking Caption...We could build the Economic Collapse Amputated Hand Museum...

Thief hand cut off 'before inmates' or even better, World Banking System Adopts Sharia Law...

Authorities in Iran have amputated the hand of a convicted thief in front of other prisoners, state radio is reporting.
The report did not identify the 32-year-old convict, whose hand was reportedly cut off in the central city of Yazad, or provide details of his crime.

http://www.belfasttelegraph.co.uk/news/world-news/thief-hand-cut-off-before-inmates-14985646.html
Oct 24, 2010 at 10:49 PM | Unregistered CommenterZ
Since these banks were magically turned into "bank holding companies" overnight by Bernanke and his band of crooks, they are subject to FDIC rules, and absolutely should be declared insolvent and seized.

And all of these banks buying up other financial companies with toxic assets? Why would they do that?

I'll tell you why. Because if they were allowed to go into bankruptcy, the lid would have come off, and the banks like B of A would be next.

But now, there aren't enough fingers to plug the dam. If Osama Blackbush tries to retroactively OK this, there will quite possibly be blood in the streets. He might try to suppress these slimy criminals' actions until after the elections, but even if he can, by early next year this is going to blow sky-high -- GLOBALLY.
Oct 25, 2010 at 4:45 PM | Unregistered CommenterBig M
All banks are frauds. The money itself is fraudulent and the government is complicit in genocide.

When will we learn the truth?
Oct 25, 2010 at 5:11 PM | Unregistered Commenterusurykills
These were my fav lines from the Black op-ed...

* The fraudulent CEOs looted with impunity, were left in power, and were granted their fondest wish when Congress, at the behest of the Chamber of Commerce, Chairman Bernanke, and the bankers' trade associations, successfully extorted the professional Financial Accounting Standards Board (FASB) to turn the accounting rules into a farce.

* The FASB's new rules allowed the banks (and the Fed, which has taken over a trillion dollars in toxic mortgages as wholly inadequate collateral) to refuse to recognize hundreds of billions of dollars of losses. This accounting scam produces enormous fictional "income" and "capital" at the banks. The fictional income produces real bonuses to the CEOs that make them even wealthier. The fictional bank capital allows the regulators to evade their statutory duties under the Prompt Corrective Action (PCA) law to close the insolvent and failing banks.

* The inflated asset values allow the Fed and the administration to ignore the Fed's massive loss exposure and allow Treasury to spread propaganda claiming that TARP resolved all the problems -- at virtually no cost.
Oct 25, 2010 at 7:59 PM | Registered CommenterDailyBail
Its very unfortunate that Keiser's broadcast style is that of a stupid, overbearing buffoon. (What is it with these Alex Jones/Cramer types?) It discredits him badly. These are serious issues, people are really suffering and his actual material and content is good. Too bad his presentation gets in the way.
Oct 26, 2010 at 3:45 AM | Unregistered CommenterA899
you said:
"All banks are frauds. The money itself is fraudulent and the government is complicit in genocide.

When will we learn the truth? "

We know the truth and have for a long, long time. The issue is: WHEN WILL WE DO SOMETHING ABOUT IT?
Oct 26, 2010 at 3:47 AM | Unregistered CommenterAnnonymous
These excerpts are taken from an October 22, 2010 article that appeared in The Huffington Post: http://www.huffingtonpost.com/william-k-black/foreclose-on-the-foreclos_b_772434.html?page=2

I’ve tried to post there the comment below, under my own name and title (I am a university professor), and—unsurprisingly—the comment was rejected. I was greeted instead with: “Sorry, but you have been banned from commenting.” Here is the rejected comment:

For the past few months I've been studying the PATTERN of political assassinations in the USA and have been able to predict one murder, just before it took place. This pattern works like this: If you cross a certain line, your very existence becomes intolerable to the Central Bankers. They first try intimidation, if they can. Failing intimidation, the bankers and their allies see to it that genuine democrats like Black and Wray “commit” suicide, fall off a bridge, get caught in a sex scandal, “abuse” their spouses, lose their job, or die in a car, boat, or airplane accident.

In my view, with this courageous, incisive article, both writers (but especially Prof. Black) crossed the Central Bankers’ line. There isn't much Black and Wray can do to protect themselves, short of going into hiding. At the very least, they should be careful and never, ever, be alone. They shouldn’t fly, shouldn’t go out at night, should always be alert. In popular thrillers, the Bill Blacks of the world win. In the real world, they rarely do—they just lose their jobs, reputations, or lives.

I know this sounds crazy. It would have sounded crazy to my former self of 20 years ago. But that is how the Central Bankers remain in charge: when all else fails, they murder anyone who poses a threat to their rule.
Oct 26, 2010 at 12:49 PM | Unregistered CommenterProfessor
Professor...Black has been saying htese things publicly for 24 months...screaming from the rooftops...and they haven't gotten him yet...
Oct 27, 2010 at 2:15 PM | Registered CommenterDailyBail
The history of the CARNAGE and the WRECKAGE of Banksters Preying on societies around the World is EXTENSIVE. The current DEBACLE is merely The Continuing Twisted Saga ... of the Looting of America (the Planet)

The Samp Fox
Judson Witham
https://sites.google.com/site/thegreattexasbankjob/
Oct 28, 2010 at 11:10 AM | Unregistered CommenterJudson Witham

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