David Kirkpatrick

June 18, 2010

A fish story

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 6:52 pm

Very fishy behavior from that font of fail that is Bank of America

From the link:

Dr. Alan Schroit was shocked when he arrived at his Galveston, Texas, vacation house only to find a seizure notice from Bank of America plastered on his padlocked front door.And that wasn’t the only nasty surprise.

Schroit summoned the police to get into his own home. When he did, he was met with the “overpowering putrid smell” of 75 pounds of rotten fish, according to court documents.

He had recently gone fishing and was storing his copious catch for a family gathering. But the bank’s foreclosure agent had shut off the home’s power.

The kicker: Schroit doesn’t have a mortgage with Bank of America, or with any bank for that matter. He owns the house free and clear!

Bank of America has been accused of several wrongful lockouts in recent months, many of which have resulted in lawsuits against the company.

“We sincerely apologize to the homeowners affected for the confusion and stress these errors have caused,” said Bank of America spokeswoman Jumana Bauwens. “We are working aggressively to improve our process through formal training, enhanced checklists and improved communication.”

Schroit has since reached an undisclosed settlement with the bank according to his attorney. Court documents show that Schroit wanted compensation that would be “adequate to deter BOA’s arrogance.”

[picapp align=”none” wrap=”false” link=”term=bank+of+america&iid=8533012″ src=”http://view1.picapp.com/pictures.photo/image/8533012/customer-uses-bank-america/customer-uses-bank-america.jpg?size=500&imageId=8533012″ width=”500″ height=”289″ /]

Want to read more BoA fail from the same link? Here’s a bird tale to join the above fish story.

December 3, 2009

Another TARP bank pays the nation back

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 1:33 pm

This week it’s Bank of America. Good to see the money back in public coffers, but this move doesn’t exonerate the company for its malfeasance over the past year. At any rate it’s another $45 billion in bailout dollars the taxpayers get back, plus an extra $2.54 billion in Treasury payments.

Of course do you think BofA, or any other of the TARP banks for that matter, would be magnanimously paying the public back so quickly if the Feds hadn’t cracked down this year and seized control of executive pay and other business functions? I want the banking industry working outside of government influence, but I also want the banking industry working without using public money with no-strings-attached.

October 23, 2009

TARP recipients to get White House mandated pay cut

I’m no fan of the government telling a business how much it’s going to pay executives, but you have to say the major TARP recipients brought this on themselves. After the forced bailout (most of these players had no choice but to go along with the bailout) the situation became no longer business as usual. Somehow that point was lost on the C-level at Citigroup, BoA, GM, Chrysler, GMAC, Chrysler Financial, and especially AIG. The end result? The pay packages of 175 top executives are going to start seeing much lighter pay checks.

Cue an entire chorus of nanoscale violins.

From the link:

The Obama administration will soon order the nation’s biggest bailed-out companies to drastically cut the pay packages of 175 top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House’s pay czar in June, will demand that each of the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

And here’s the big number:

Under the plan, which is expected to be officially released by the Treasury Department next week, annual salaries for executives at those seven firms are expected to fall 90%, on average, the official said.

October 21, 2009

Treasury blasted on TARP transparency

And rightly so. When the government hands out $700 billion with essentially no debate as was the case a  little over a year ago, the public deserves to know where that money went and the government damn sure better be able to account for every cent. Or at least every $100,000.

From the link:

In a scathing report out Wednesday, a government watchdog blasts the Treasury Department for its handling of a $700 billion bailout program and for not adopting all of its earlier recommendations.

Special Inspector General Neil Barofsky, who is in charge of overseeing the Troubled Asset Relief Program (TARP), said Treasury’s failure to provide more details about the use of TARP funds has helped damage “the credibility of the program and of the government itself, and the anger, cynicism, and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”

Barofsky has made 41 recommendations to better implement the program, of which Treasury has executed 18 and partially adopted seven.

One proposal calls for Treasury to require all of the hundreds of TARP recipients to report how they use the funds, which the Treasury has applied to only three of the largest recipients —American International Group,Citigroup and Bank of America.

Barofsky also describes at least nine unimplemented proposals, saying their adoption “could help bring greater transparency to TARP and answer some of the criticisms of the program.”

October 2, 2009

Nice job BoA

Filed under: Business, et.al. — Tags: , , , , , — David Kirkpatrick @ 12:16 pm

You’ve received a massive amount of public money to stay in business. The general public isn’t too pleased with the entire process.

And then one of your branches goes out and does this:

A bank in Florida refused to cash a check for an armless man because he could not provide a thumbprint.

“They looked at my prosthetic hands and the teller said, ‘Well, obviously you can’t give us a thumbprint’,” Steve Valdez told CNN on Wednesday.

But he said the Bank of America Corp branch in downtown Tampa, Florida, still insisted on a thumbprint identification for him to cash a check drawn on his wife’s account at the bank, even though he showed them two photo IDs.

In the incident last week, a bank supervisor told Valdez he could only cash the check without a thumbprint if he brought his wife in with him or he opened an account with them.

Of course, since that branch didn’t have anyone with a brain in a position to override the policy, the bank might be in a bit of hot water:

Valdez said his treatment by the bank violated the U.S. Americans with Disability Act requiring institutions to provide reasonable accommodation to disabled persons.

March 30, 2009

BofA in on Ponzi action

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 2:22 pm

Not sure if this is opportunism or something serious. Seems the New York legal system really has is out for Wall Street and the financial sector right now.

From the link:

Bank of America effectively set up a branch in a Long Island office that helped Nicholas Cosmo carry out a $380 million Ponzi scheme, according to a class-action lawsuit filed in federal court.

The lawsuit, filed in Federal District Court in Brooklyn late Thursday, contends that Bank of America ”established, equipped and staffed” a branch office in the headquarters of Mr. Cosmo’s firm, Agape Merchant Advance. As a result, the lawsuit contends that the bank knowingly ”assisted, facilitated and furthered” Mr. Cosmo’s fraudulent scheme.

 

”Bank of America was at the epicenter of this scheme,” said the lawsuit, which seeks $400 million in damages from the bank and other defendants. ”Without Bank of America’s participation, the scheme would not have succeeded and grown to such an enormous size.”

February 11, 2009

A brilliant bank bailout plan …

Filed under: Business, Politics — Tags: , , , , , , , — David Kirkpatrick @ 4:47 pm

… from Andy Kessler. Andrew Sullivan called this idea “wacky,” but I like it. Certainly not all that wacky — just a way outside the box.

From the link:

Now with TARP 2.0, renamed a friendly Financial Stability Plan, the idea is to entice private capital to buy these bad loans and derivatives in an effort to set the “market price.” But Mr. Geithner hasn’t solved the dilemma of banks not wanting to sell and become insolvent. Moreover, no one is going to buy these securities ahead of Mr. Geithner’s action with the “full resources of the government” to bring down mortgage payments and reduce mortgage interest rates. Lower mortgage payments means mortgage-backed securities would be worth even less. Six months to a year from now, big banks may still be weak and the ugly “n” word of nationalization will be back.

Mr. Geithner should instead use his “stress test” and nationalize the dead banks via the FDIC — but only for a day or so.

First, strip out all the toxic assets and put them into a holding tank inside the Treasury. Then inject $300 billion in fresh equity for both Citi and Bank of America. Create 10 billion new shares of each of the companies to replace the old ones. The book value of each share could be $30. Very quickly, a new board of directors should be created and a new management team hired. Here’s the tricky part: Who owns the shares? Politics will kill a nationalized bank. So spin them out immediately.

Some $6 trillion in income taxes were paid by individuals in 2006, 2007 and 2008. On a pro-forma basis, send out those 10 billion shares of each bank to taxpayers. They paid for the recapitalization.

Each taxpayer would get about $100 worth of stock for each $1,000 of taxes paid. Of course, each taxpayer has the ability to sell these shares on the open market, maybe at $40, maybe $20, maybe $80. It depends on management, their vision, how much additional capital they are willing to raise, the dividend they declare, etc. Meanwhile, the toxic assets sitting inside the Treasury will have residual value and the proceeds from their eventual sale, I believe, will more than offset the capital injected. That would benefit all citizens, not the managements and shareholders who blew up the banking system in the first place.

January 27, 2009

Thain digs grave a little bit more deep

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 2:58 pm

One, why is he talking to anyone in the press? He has nothing to gain and is now a great case study in bad public relations.

Two, I will never understand why C-level incompetence is almost always rewarded. This ass clown will get another job , probably soon, with the keys to the bus, a foot on the pedal and a big cliff looming after his first twist of the steering wheel.

And our tax dollars will be there to bail him out again.

From the link:

Former Merrill Lynch & Co. Chief Executive John Thain defended the acquisition of the brokerage by Bank of America Corp., saying the bank knew of the company’s losses and bonuses before the purchase closed.

Thain also said he plans to reimburse Bank of America for a $1.2 million renovation of his office a year ago, saying in an interview with CNBC Monday that “it is clear to me in today’s world that it was a mistake.”

“I apologize for spending that money … on those things,” Thain said in the interview.

He made similar comments in a memo to employees released Monday by media outlets.

When asked why he made the renovations in the first place, Thain said during the CNBC interview that former Merrill Lynch CEO Stan O’Neal’s office “was very different than the general decor of Merrill’s offices. It really would have been very difficult for me to use it in the form that it was in … It needed to be renovated no matter what.”

“I should have simply paid for it myself,” Thain added.

Spokespeople at Bank of America and Merrill Lynch declined to comment on the office renovation reimbursement.

January 8, 2009

Banks still aren’t lending

Remember that big ‘ole bailout of the financial sector, that little exercise in corporate socialism, that was supposed to thaw the credit freeze and get money flowing freely once again? Like pretty much every move taken by an inept Fed, our tax dollars are sitting in the coffers of banks and not flowing anywhere.

We may be in uncharted waters economically, but the bailout ought to be a public outrage. Our money, really our future, was taken from us forcefully by an incompetent government agency and handed to banks which are now doing nothing more than hoarding the dollars.

Nice.

From the link:

Despite all the government’s best efforts in recent months, big banks still aren’t lending money freely. One sign of the crunch: New loans to large companies slumped 37% in the three months ending Nov. 30 from the preceding three months. “Banks are being extremely cautious,” says Edward Wedbush, chairman of the Los Angeles brokerage Wedbush Morgan Securities.

The industry is getting flak for hunkering down. After all, the Treasury has injected $187.5 billion into the nation’s largest banks, including Citigroup (C), Bank of America (BAC), and JPMorgan Chase (JPM). The recipients of taxpayer money, say critics, should be required to open up their coffers. “The bad news [is] Treasury has no way to measure whether taxpayer funds are being used to increase lending,” Representative Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said in December. “The much worse news [is that Treasury] does not even have the intention of doing so.”

Banking chiefs defend their position. They argue that the government funds are designed to shore up capital and support lending, but that they have no obligation to make new loans. “It’s not a one-to-one relationship,” says BofA CEO Kenneth D. Lewis. “We don’t write $15 billion in loans because we got $15 billion from the government.”

Right now there’s little financial incentive to make fresh loans. In the current unease, new corporate loans are immediately marked down to between 60¢ and 80¢ on the dollar, forcing banks to take a hit on the debt. It’s more lucrative, then, for them to buy old loans that are discounted already.

December 10, 2008

Bailout already panned by oversight board

Who could have seen this coming? A crazy, somewhat ad hoc tossing of money toward Wall Street, and looks like the Rust Belt very soon.

Then you have the spectacle of Merrill Lynch CEO John Thain asking for (and quickly backtracking on) a $10 million bonus in a year that saw his company get bought out after recieving $10 billion in government money in October. Talk about out of touch, and exactly why this bailout is ridiculous. Wall Street is still playing by different rules.

I’m no fan of oversight and regulation, but the rules change when government money is involved. Business is one thing, but once you go on the dole the rules change and any business ought to expect and accept a high level of oversight, and maybe even a higher level of regulation (wait, while I take a deep breath after typing that), until that business can repay the government and go back to market on its own two feet, so to speak. 

From the first link:

The report said that Treasury must establish clear measures to gauge the $700 billion Troubled Asset Relief Program. The special panel, which was set up by Congress to oversee the bailout, also said it is “essential” that the Treasury ensure taxpayer funds are being used for their intended purpose.

“American taxpayers need to know that their money is having a tangible effect on improving financial stability, credit availability, and the economy as a whole,” the draft report said. “As a first step, Treasury needs to provide a detailed assessment of whether the funds it has spent so far have had any effect – for better or worse – in these areas.”

September 15, 2008

Big bank bust up

Wow. Merrill Lynch agrees to be sold to Bank of America and Lehman Brothers files for bankruptcy. The piper is being paid in spades.

From the link:

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.