Tags: Angelo Mozilo, Bank of America, Bank of America Merrill Lynch, Countrywide, George is gettin' upset!, people who love America, throwbacks to a century ago
In June 2008, at the last Countrywide shareholder meeting after the company had been bought by Bank of America, founder Angelo Mozilo made a bold statement, telling those assembled, “[Bank of America] will reap the benefits of what we have sowed.” While one might quibble over the definition of the word “benefit,” the bank was unquestionably on the reaping end of what Mozilo and Co had sowed, namely a lot of predatory lending and mortgage messiness that ultimately grew and blossomed into approximately $71 billion worth of fines and BofA CEO Brian Moynihan’s near-nervous breakdown. Though mum when Bank of America was writing checks to resolve issues it inherited from CFC, Mozilo did deign to pick up the phone and chat with Bloomberg last week, following the news that the U.S. Attorney’s Office in Los Angeles intends to sue him over the not-so-great job he did. And thank god he did, because there is a lot we needed to be filled in on re: what Ang has been doing/thinking/feeling these last 6 years.
- Like, his plans to build an old-timey Western town: “…a project in Templeton, a small Southern California town where he’s requested permits to build a two-story retail and office building on a vacant lot. Architectural sketches show a style suited for a quaint Western main street. ‘It’s a throwback to a century ago,’ Mozilo said. ‘I love America. I love everything about America.’”
- His belief in, if not consumption of, Taco Bell: “One investment is a stake in a building that houses a Taco Bell outside Phoenix. Mozilo said he hasn’t eaten there because he stays away from chicken and beef.“
- His work giving the next generation a crash course in Finance 101: Mozilo Style: “Mozilo decided to teach undergraduates what he knows about finance last year. The former trustee of Gonzaga University in Spokane, Washington, said he spent about two weeks in Italy at Gonzaga-in-Florence, housed in the Mozilo Center overlooking a 16th-century Medici garden. ‘I taught them the basics of finance based on my own experiences,’ he said. ‘I really enjoyed being among them. It was very refreshing for me.’”
The most interesting development, however, is probably his newfound penchant for speaking in the third person when denying any and all blame re: what went down at Countrywide. In short, Mozilo thinks those pointing fingers should go home and take a good look in the mirror. Read more »
Tags: albatross!, Countrywide, the dance defense
Painting a mental portrait of 200 Countrywide employees doing the Hustle did nothing to convince jurors that the eponymous mortgage program was not just a big plot to rip Fannie Mae and Freddie Mac off. Read more »
Tags: Angelo Mozilo, Bank of America, Countrywide, legal fees, settlements, so much reaping
June 29, 2009: Countrywide Chairman and CEO Angelo Mozilo utters greatest veiled threat ever when he tells CFC shareholders at their final meeting that Bank of America “will reap the benefits of what we have sowed.”
October 25, 2012: Analysts estimate the benefits of acquiring Countrywide have so far cost Bank of America $40+ billion in “write-downs, legal expenses, and settlements.”
October 8, 2013: Still reaping: Read more »
Tags: AIG, Bank of America, Bear Stearns, Countrywide, Dexia, Jed Rakoff, JPMorgan, Maiden Lane
A while back Bear Stearns sold some mortgage-backed securities to a thing called FSAM, which was basically a subsidiary of Franco-Belgian monstrosité Dexia, and FSAM sold the RMBS on to Dexia, and the mortgages were all terrible, and their value dropped, and Dexia sued JPMorgan, currently the proud owner of Bear Stearns, and today JPMorgan won:
JPMorgan Chase & Co has won the dismissal of the vast majority of a lawsuit accusing it of misleading the Belgian-French bank Dexia SA into buying more than $1.6 billion of troubled mortgage debt.
The decision, made public Wednesday by U.S. District Judge Jed Rakoff in Manhattan, is a victory for the largest U.S. bank, in a case that gained notoriety after emails and other materials were disclosed that suggested the bank and its affiliates knew the debt was toxic, but sold it anyway.
Despite the notoriety this is kind of a boring case: it’s a garden-variety RMBS fraud case; Bear said various things in the offering documents that maybe weren’t so true, and the market crashed and the investors lost a lot of money, and now they’re mad. There’s like a zillion of those cases; actually there’s like a zillion of those cases just against Bear Stearns (here are two).
But the fact that the bank won is pretty interesting? Like, if JPMorgan can win a garden-variety RMBS case then so can anyone? I guess? So I suppose it’s worth spending a minute figuring out what this means for other banks.
We run into immediate problems because it’s hard to know exactly why JPMorgan won; the judge’s order is two pages of “opinion to follow.” But reading JPMorgan’s submissions you can get behind CNBC’s interpretation: Read more »
Tags: AIG, Bank of America, Countrywide, Fed, Hank Greenberg, Lawsuits, Maiden Lane, Maurice Greenberg
AIG is in the news today for two very small numbers in connection with much larger numbers. First: AIG is no longer bailed out! I know, you thought that happened like six months ago, and then again three months ago, but today AIG got rid of the last little bits of government ownership, really this time:
American International Group, Inc. (NYSE: AIG) announced today that it completed the repurchase of warrants issued to the United States Department of the Treasury (U.S. Treasury) in 2008 and 2009. … AIG and the U.S. Treasury agreed upon a repurchase price of approximately $25 million for the warrants. The U.S. Treasury does not have any residual interest in AIG after AIG’s repurchase of these warrants.
“With AIG repurchasing all outstanding warrants issued to the U.S. Treasury, we are turning the final page on America’s assistance to AIG,” said Robert H. Benmosche, AIG President and Chief Executive Officer. “We appreciate the opportunities this support allowed and are proud to have returned to America every cent plus a profit of $22.7 billion.”
Back in December, I speculated baselessly about why AIG didn’t just buy back these warrants in connection with Treasury’s final sale of stock back in December, since they were just rounding error on the $7.6bn offering. I figured waiting would let the government get a better deal, and it seems to have: I ballparked a value of $18,000,000.393 for those warrants in December, so Treasury made an extra $7mm by waiting three months.1 One possible explanation is that AIG and Treasury enjoyed the dynamic of announcing “AIG HAS PAID OFF ITS BAILOUT” every three months, so they milked it for all it was worth. I’m sure someone from Treasury left a pen or something at AIG’s offices, and its return will be announced with great fanfare in a few months.
But this is a distraction from more amazing, less pleasant AIG news: Read more »