8-25-14 – Government Extortion

posted by Frank Mazur

I look forward to the Larry Kudlow podcast each Saturday.  He’s insightful, covers a wide range of subjects, is opinionated and has outstanding guests.  It’s almost a 2 hour podcast.  Though controversial and I find fault with some of his reasoning but he’s a free marketer and does make you think.

Yesterday he talked in depth about the Bank of America settlement reported in the paper this past week.  He called it an extortion and after listening to him I agree.  He also quoted extensively from the former Wells Fargo CEO on the matter.

Bank of America has paid $60B in penalties since the fiscal mortgage fiasco of a few years ago.  Pretty hefty sum for stockholders to bear.  However, when the defaults were occurring, the bank only had a default rate of 4% whereas others were dramatically higher.  The Feds insisted BoA purchase Merrill Lynch and Countrywide, both companies which were in financial trouble and on the verge of collapsing with default mortgages.  BofA resisted but were told if they didn’t somehow the CEO would be replaced so they reluctantly agreed to the acquisitions.  After the collapse the penalties were imposed on BofA.  Somehow this doesn’t sound right.

The $17B penalties announced this past week is equally astounding.  According to Kudlow and the Wells Fargo former CEO, the money is going to community organizers (Acorn) and to states where the Democrats need funding for political purposes.  That hasn’t been brought out in the press….but it is reported that it’s going for housing and other community services.  See the connection?

When he finished this radio segment, he indicated the feds are now insisting banks lend mortgage money to borrowers with no money down again….the very policies that created the fiscal fiasco a few years ago.

Something is not right with this scenario……and we only have ourselves the blame for allowing it to happen.

– Frank Mazur is a former EAI board member

 

 

{ 1 comment… read it below or add one }

Doug Richmond, Underhill August 29, 2014 at 7:33 pm

Government is bankrupt, fiscally and morally.
They demanded these foolish mortgages, watch the banks and lenders go near broke, demand they go farther in the hole as you pointed out………

Then being bankrupt, fiscally and morally they fine $67 BBBillion, to prop up their incumbents with their most powerful constituents.

Note: they are not using these $BBBillions to pay down our DEBT.

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