Saturday, May 12, 2012

Right-Wing Pols In A Nutshell: Loathing Mitt and His Brethren, Crying Jamie Di(a)mon(d), Wachovia-Lehman Bros. Trysts & Viewing Quick Departure of Would-Be Quislings from Fannie, Freddie, BoA, Chase, Wells, Citi?



It all comes out in the wash.

So they say.

We'll know pretty soon now anyway (if we're paying attention). And the bad news is also breaking about the Wachovia-Lehman machinations.

From our man on the street, Neil Garfield at Living Lies:

Executive Departures at Fannie, Freddie and Investment Banks


The Wall Street Journal and the New York Times are all buzzing about the departures and layoffs of high placed investment bankers at Fannie and Freddie and the huge layoffs at BOA, Citi, Chase, and Wells of formerly high-priced (stupidly high salaries and bonuses) of major players in their investment banking divisions. These people have intimate knowledge of the actual flow of money, securities and the alleged  securitization of millions of loans.

If you are looking for fact and expert witnesses, this group of people contains at least a few hundred whistle blowers despite contracts they signed for their benefits package on leaving the GSEs and the Banks. Many of them are waiting to be contacted and believe they can make far more money busting the banks or agencies that hired them than the bloated severance package they received.

If you ask the right questions and follow up with them, you will learn that from the very start the documents used at closing with borrowers were even more misleading than the documents used at closing with the lender investors. They will also tell you names of investors and investor "pools" and the fund manager of each. And of course they will tell you that the pools are either empty, non-existent or hydrogenated so that their existence and contents are a complete mystery even to those who sold repackaged mini bonds or mortgage bonds using the dissolution of the old "trust" that purportedly claimed ownership over the entire loan.

Most important is that these people can tell you why "bankruptcy remote" thinly capitalised entities were used to originate the loans rather than the lending pools. And they can tell you where to find the money that was received, but not allocated to reduce the loan balances or the balances due on the mortgage bonds.
_ _ _ _ _ _ _

City of St. Petersburg wins $10.4 million verdict against big bank – Tampa Bay Times
on 03 May 2012.

TAMPA — In a major victory for St. Petersburg that further feeds into a backlash against Wall Street, a federal jury ruled Tuesday that Wachovia Global Securities breached its contract and owes the city $10.4 million for not notifying it sooner about a failing investment.

Seven jurors spent more than four hours deliberating in a case that pitted city officials against financial giant Wells Fargo, which bought Wachovia in 2009. After six days of testimony, jurors sided with city officials who blamed Wachovia for losses they incurred when Lehman Brothers went bankrupt.

“The bank was the professional,” said juror Michael Gross, 62, of Pinellas Park. “The city might have been negligent, but the city hired the bank to manage those investments. That’s what they were paid to do.”
v
Two jurors interviewed by the Tampa Bay Times said both legal teams presented strong arguments in a case that is bound to have ramifications nationwide. About a dozen lawsuits are set for trial in which large investors, including Sarasota County, are seeking to recover losses in Lehman Brothers bonds from the financial adviser who managed the portfolios — Wachovia Global Securities.

While the jurors agreed with Wells Fargo attorneys that the city should have done a better job overseeing an investment portfolio of more than $400 million, they sided with city attorneys in concluding that such negligence was moot because the investments ultimately were Wachovia’s responsibility.

“We weren’t happy with how the city managed its portfolio,” said jury foreman Bill Jotham, 61, of Sarasota. “But the evidence showed that Wachovia didn’t do its fiduciary duty.”

City officials expect motions related to the trial to be filed in the coming days, and offered few words for comment.

“We’re pleased with the verdict, the verdict speaks for itself,” said City Attorney John Wolfe.

The verdict was undeniably good news for a city that had spent $1.2 million to fight a case that was far from a sure bet.


“Nothing is ever certain in litigation, but we were always confident in our legal team,” Mayor Bill Foster said. Handling much of the litigation for the city were Rob Marcus and C. Bailey King from the Charlotte, N.C., law firm Smith Moore Leatherwood. Helping them throughout was assistant city attorney Jacqueline Kovilaritch.

If the city recoups its money from Wells Fargo, Foster said it will be put back into the city’s investment portfolio.

Can Knowing More About Mitty and Friends Increase Your Loathing? Oh yes.