Geithner Lets Bank of America Off The Hook For 1 Cent On The Dollar

The potential liability of $127 billion in mortgages sold by Countrywide, which collapsed and then was bailed out by BAC in a smokey back room deal which involved the U.S. Treasury, was just settled in BAC's favor for 1 cent per dollar of potential Taxpayer liablity.  These were loans which were flipped into Fannie Mae, which is now owned by the Treasury/Taxpayer.  Here's the link:  LINK Mr. Ritholtz makes an interesting quote:  "My biggest complaint about the GSEs post government takeover is that they have been used as a back door bailout of the banks. This latest deal reconfirms that view."

Interestingly, this was a prediction I made back in 2002:  The Government would eventually take over FNM/FRE and use them monetize the mortgage/housing collapse.  We are there.  Make no mistake, there will be QE3, 4, 5 and the precious metals will eventually hit pricing levels, in U.S. dollars, which will shock people.

Please note for the record:  the media/blogosphere keeps referring to this deal as being between Bank of America and Fannie Mae.  Unequivocally, this deal is 100% between Tim Geithner as agent for the U.S. taxpayer and Bank of America.  Period.  This is because the Govt/Taxpayer owns FNM.

The more I ponder this deal, the more I believe there is a great case for fraudulent conveyance:  from BAC to the Govt AND from the Govt/Tim Geithner to the Taxpayer.  I hope someone pursues this.