BAC should receive a presidential medal of honor
Reader comment on: Limbaugh on Durbin, BAC
Submitted by Joe LaVigna (United States), Oct 5, 2011 19:01
President Obama should award the medal of honor for financial bravery and aid and assistance to the US Government to Bank of America and its current CEO, Brian Moynihan, and collectively to BAC's hapless stockholders for their willlingness to accept full financial responsibility for the errors of Countrywide Financial, acquired in January 2008.
One of the most egregrious lenders exercising sloppy standards for home loans during the several years leading up to the 2008 financial crisis was Countrywide's wholesale residential lending operation and its nationwide network of mortgage brokers. Egged on by a couple of Wall Street firms, most notably Bear Stearns, to keep generating loans for packaged sales to investors, Countrywide was, as we see now more clearly, a major contributor to the housing bubble creation and its bursting. If it were not acquired by Bank America, it would have been taken over by the FDiC, just as was IndyMac in July of 2008, a former operation of Countrywide spun off several years earlier. The FDIC would have necessarily assumed all of the subsequent costs of failed loans and the expenses to process them, in addition to the virtual shuttering of the windows of its operations and laying off of thousands of employees. As the FDIC is protected from suit for any assumption of liabilities, the financial victims of Countrywide's questionable activities would have no where to turn, except perhaps to the discharged executives who under the circumstances of an FDIC takeover would have had substantially less assets to lay claims upon.
Enter humongously stupid, white knight Ken Lewis, former CEO of BAC, who engineered perhaps the nation's worst financial transaction and left the mess to his successors to try to resolve. To the current CEO's "credit", for which, he will not be given any political or other "credits", Moynihan stated publicly that it was up to BAC to assume the full liabilities of its acquired subsidiary's stupidities and perhaps culpabilities. BAC did not and does not have to do that. It could have bankrupted the subsidiary and probably limited its liabilities to its $4Billion acquisition price. Today, however, its investment is worthless and it is assuming all of the legal liabilities and costs of closing down those operations and perhaps additional claims as well.
So, why do I ask you all should we be throwing mud at B of A? Why not honor them and their stockholders for relieving us taxpayers of the costs?
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