Astroturf works in the service of Wall Street [View all]

[Octafish]

Last edited Sat Jan 28, 2012, 07:41 PM - Edit history (2)

This post is to call out your DU attention to the Center for Responsible Lending.



The organization came out in favor of the Administration settling the Robo-Signing scandal with the Big Banks.

Consumer group tentatively supports $25-billion mortgage deal

AG Settlement: Not Perfect, but Significant Reform of Mortgage Servicing

The news was posted on DU.

In researching the "not-for-profit organization," I discovered the founders and principle funders of the Center for Responsible Lending, Herb and Marion Sandler, made great profits -- legally -- through the Savings & Loan and banking industries. They both are old-fashioned, Liberal Democrats from the Democratic Wing of the Democratic Party -- the kind I identify with. That said, it's important to know they got out of the home mortgage game at just the right moment:

Wachovia’s Golden West Deal Turns to Bronze

WSJ Blog Deals
January 22, 2008, 1:50 PM
By Dana Cimilluca

Depending on how you look at it, it was either one of the best- or the worst-timed M&A deals of all time.

We are talking about Wachovia’s $24 billion acquisition of California mortgage lender Golden West Financial. The deal was announced in early May 2006. Its close, five months later, coincided almost perfectly with the peak in the U.S. home-lending market, a fact made all-to-clear by Wachovia’s 98% fourth-quarter earnings decline, announced today.

The woes that have halved the share price of its larger rival, Citigroup, have diverted attention away from the dismal performance of Wachovia’s stock. But of the four largest U.S. banks — Citi, J.P. Morgan Chase, BofA and Wachovia — only Citigroup’s stock has performed worse than has Wachovia’s since the Golden West deal closed. The 44% decline in Wachovia’s stock since then has knocked nearly $50 billion off its market cap.

SNIP...

But on Wall Street, of course, someone’s loss is always another’s gain. In this case, Herbert and Marion Sandler must be congratulated not only for building Golden West into a financial colossus, but for their impeccable timing in selling it. The deal valued the husband-and-wife team’s stakes at $2.4 billion. But alas, they remain big Wachovia shareholders.

CONTINUED...

The people who can afford to play this Corporate McPravda Astroturf game are of the same class who get paid by the system.

Bottom Line: Do not support this quick settlement, as it's nothing more than welfare for Wall Street.