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AIG May (Rightly) Sue The Gov’t Over ‘Bailout’

From the New York Times:

Rescued by a Bailout, A.I.G. May Sue Its Savior

By BEN PROTESS and MICHAEL J. DE LA MERCED | January 7, 2013

Fresh from paying back a $182 billion bailout, the American International Group Inc. has been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

How ungrateful of them! Didn’t they learn from Obama’s ‘saving’ of GM that the idea is to punish the shareholders?

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

Maurice R. Greenberg, A.I.G.’s former chief executive, who remains a major investor in the company, filed the lawsuit in 2011 on behalf of fellow shareholders. He has since urged A.I.G. to join the case, a move that could nudge the government into settlement talks.

Sorry, but it seems to us like they may have a point. And, hopefully, if they proceed and win, GM and Chrysler bondholders and dealers will follower suit.

The choice is not a simple one for the insurer. Its board members, most of whom joined after the bailout, owe a duty to shareholders to consider the lawsuit…

What a bizarre concept.

Yet such a move would almost certainly be widely seen as an audacious display of ingratitude. The action would also threaten to inflame tensions in Washington, where the company has become a byword for excessive risk-taking on Wall Street…

AIG stepped in to insure the bad mortgages that were forced upon the banks by the federal government. They tried to spread around the risk that everyone knew was involved. They are not the bad guys here.

Meanwhile, here is the latest update on the endless shakedown of these evil mortgage lenders, from a joyous Associated Press:

US banks to pay $8.5B in mortgage settlement

By DANIEL WAGNER and CHRISTOPHER S. RUGABER | January 8, 2013

WASHINGTON (AP) — Hundreds of thousands of Americans stand to benefit from the latest mortgage-abuse settlement, but consumer advocates say U.S. banks may be getting the best of the deal.

Sure they are.

Banks have agreed to pay $8.5 billion to settle charges that they wrongfully foreclosed on millions of homeowners in the wake of the 2008 financial crisis. Abuses included "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents…

The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay about $3.3 billion to homeowners to end the review of foreclosures.

Of course, in reality this $3.3 billion dollars will be paid by the customers of JPMorgan Chase, Bank of America and Wells Fargo. (And, as we will soon see, the list doesn’t stop with them.)

The rest of the money – $5.2 billion – will be used to reduce mortgage bills and forgive outstanding principal on home sales that generated less than borrowers owed on their mortgages.

A total of 3.8 million people are eligible for payments under the deal announced by the Office of Comptroller of the Currency and the Federal Reserve. Those payments could range from a few hundred dollars to up to $125,000…

Obama’s constituents, ‘the takers,’ thank you.

The companies involved in the settlement announced Monday also include Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora. The 2011 action also included GMAC Mortgage, HSBC Finance Corp. and EMC Mortgage Corp.

So all of their customers will also get to contribute to this latest redistribution of wealth.

Regulators announced the deal on the same day that Bank of America agreed to pay $11.6 billion to government-backed mortgage financier Fannie Mae to settle claims related to mortgages that soured during the housing crash…

It never ends. By the way, when is Fannie Mae ever going to pay for all of its sins? (Just kidding.)

Monday’s foreclosure settlement doesn’t close the book on the housing crisis, which caused more than 4 million foreclosures. It covers only consumers who were in foreclosure in 2009 and 2010. Some banks didn’t agree to the settlement…

Of course not. The lawsuits will only end when the banks are bankrupt.

The settlement is separate from a $25 billion settlement among 49 state attorneys general, federal regulators and five banks: Ally, formerly known as GMAC; Bank of America; Citigroup; JPMorgan Chase and Wells Fargo.

How many billions will ever be enough for their crime of giving mortgages to people who couldn’t afford them? And never mind that they did so at the point of the government’s gun.

Meanwhile, we also have this shocking news from the New York Times:

In Deal, Bank of America Extends Retreat From Mortgages

By JESSICA SILVER-GREENBERG and PETER EAVIS | January 7, 2013

Bank of America is continuing a large-scale retreat from its costly expansion into the home mortgage market, a shift that concentrates more power in the hands of its biggest rivals and leaves fewer options for some home buyers…

Less competition in the mortgage market could hurt consumers, potentially raising the costs of borrowing.

Gee, why would they do such a thing? They must be very mean.

The problems at Bank of America have cut down its mortgage ambitions; it accounts for 4 percent of the nation’s mortgage market, a slide from just over 20 percent in 2009, ceding market dominance to Wells Fargo and JPMorgan Chase…

“Bank of America is sending a clear message that the bank only wants to be the mortgage lender to a select, small group of people,” said Glenn Schorr, an analyst with Nomura…

Just wait until the government hears about this. They will be sued by the Justice Department for sure.

This article was posted by Steve Gilbert on Tuesday, January 8th, 2013. Comments are currently closed.

One Response to “AIG May (Rightly) Sue The Gov’t Over ‘Bailout’”

  1. Helena

    Obama’s Kill America First committee has whipsawed these banks every which way they could, and with a rusty blade. This standing up and fighting back business is going to bring the wrath of King BHO Kong down on their heads, though. He does not like to be thwarted.




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