Frederick Douglass

"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them..." Frederick Douglass

Friday, July 15, 2011

Plutocracy Alert: BofA Settles With Rich Bondholders Update, 15 July

In an earlier post, I criticized this settlement on the grounds that it favored the superrich.[1] It was even worse than I thought. Here's Yves Smith's take:

We criticized the deal as being bad for homeowners (as in likely to accelerate foreclosures, rather than alleviate them, as claimed), bad for investors (due to the amount being too low for putbacks and an outrageous sellout based on the waiver for chain of title problems) and rife with conflicts of interest. Indeed, almost immediately after the settlement was announced, a group of investors who had been pursuing their own claims on three of the trusts in the settlement filed a petition as a means of objecting to the deal and its failure to provide a means for investors like them to opt out.
Two public officials, Eric Schneiderman, the New York attorney general, and Representative Brad MIller, who is a member of the House Financial Services Committee, apparently also suspect the pact does not pass the smell test and are asking some tough questions.

As described by both Bloomberg and Gretchen Morgenson of the New York Times, Schneiderman sent a letter to Bank of America and the 22 investors that suggested that he may oppose the deal. The bone of contention is that the parties that put this deal together failed to include or even consult all the investors

It's time to resurrect George again: