Why is the State AG Bank settlement a sham? Let Matt Tiabbi lay it out for you.

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Warning: I'm certain, like clockwork, there will be a post from a resident Wall Street Toe licker, blasting Tiabbi for this piece. Keep your eyes out.

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Let’s take a look at each of those three categories.

As far as private investors go, we’ve already had one lawsuit directed at Bank of America, over losses linked to purchases of bad MBS (mostly from Countrywide mortgages), which resulted in an $8.5 billion settlement.

That one settlement, covering 22 mostly private plaintiffs, cost one bank, Bank of America, nearly half the size of the entire proposed AG settlement. This is from the Times story about that deal, in June:

In a research note, Paul Miller of FBR Capital Markets projected that Bank of America could face a total of $25 billion of losses from the soured mortgages, the most of any of the major banks.

So a private analyst this summer was estimating that just one bank, Bank of America, could face more in damages than the Obama administration and the AGs are now trying to “wrest” from all the major banks, combined, for all their liabilities.

Just a few days ago, news of more such suits came in. An Irish company called Sealink Funding is suing Chase and Bank of America, seeking $4.5 billion combined in connection to losses in mortgage-backed securities sold to them by those banks. Meanwhile, a German bank, Landesbank Baden-Wurttemberg, is suing Chase for an additional $500 million in losses.

These huge amounts – a few billion here, a half a billion there – are coming from single companies, directed at single banks. And think about the Bank of America settlement for $8.5 billion: what’s the usual payoff in a lawsuit settlement? Ten cents on the dollar? Five?

In fact, the settlement amount in that case was just 2% of the face value of the loans when they were securitized ($424 billion), and represented just 4% of the principal still outstanding ($221 billion).
http://www.rollingstone.com/politics/blogs/taibblog/attorneys-general-settlement-the-next-big-bank-bailout-20111005

[IDemo]

1. That's Taibbi

And you're right, someone here called him a "yellow journalist" a few days ago. Probably applauded the bad guys in "Inside Job" as well.

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2. Kick it for a bit.

[ArcticFox]

3. Regulatory capture meet prosecutorial capture

First their regulators allow them to commit the crimes.

Now their official prosecutors want to immunize them from liability to their victims.

This has been going on for years and years. The mafia never had it so good.

I just wish Obama were with us and not a stooge for the Powerful.

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4. yep