Image: Center for Media and Democracy

On Monday, Bank of America (BofA) stocks briefly traded for under $5. Yes, you could buy a share of BofA for less than the noxious debit card fee they tried to force down your throat.

BofA is massive, with assets equivalent to 15 percent of U.S. GDP. So why is it trading for the price of a latte?

Because Wall Street’s dirty little secret is that BofA is a zombie bank. Now the reek is getting too strong to ignore.

The Most Dangerous Bank In America?

In 2008-2009, BofA publicly took $45 billion in TARP bailout funds and secretly took another $91 billion in emergency Federal Reserve loans. According to Bloomberg News, it made $1.5 billion in profits off of those loans. Yet, several analysts predict that BofA is woefully short of capital reserves.

A recent study by NYU’s Stern School of Business ranks BofA as the most systemically risky firm in the United States. These analysts use public information and focus on the capital shortfall that would be experienced by the bank in the event of another crisis. BofA’s weak condition means it is in a position to “create or extend” such a crisis.

As if this were not enough, recent news reports indicate that BofA is trying to move $22 trillion in derivatives out of its Merrill Lynch subsidiary into its FDIC-insured bank. The Fed favors the move (naturally). The FDIC, which provides insurance to depositors if a bank fails, does not.

In this pile of derivatives could be all sorts of problems, including bad European debt, the same kind of debt that brought down Jon Corzine’s derivatives firm, MF Global. Taxpayers don’t backstop MF Global. We do backstop BofA through the FDIC and the Fed.

Obama Promised to End the Era of Big Bank Bailouts

While public rage focused on the $700 billion TARP bailout bill at the height of the crisis, we have learned that far more went out the door from the Fed to aid the big banks. The Center for Media and Democracy tallies the bailout at $4.7 trillion under 35 federal programs. Bloomberg News puts the number closer to $7.7 trillion in loans plus guarantees, which generated $13 billion in profits for the banks.

With European Union countries teetering on the verge of default and no resolution in sight, the U.S. government needs to take decisive action to prevent another bailout of a major American firm – a move sure to generate explosive controversy in an election year.

When President Obama signed the Dodd-Frank Wall Street reform bill in 2010, he promised:

“It will end taxpayer bailouts of Wall Street firms.”

Yet, the “resolution authority” included in the Dodd-Frank Wall Street reform bill requires a joint decision by a group of bank regulators to break up a systemically risky institution. Unfortunately, bank regulators like Tim Geithner and Ben Bernanke, strongly prefer zero accountability and unlimited bailouts.

Time for a Redo

While some on Wall Street frame the financial crisis as events of the distant past, the 99% understand that the crisis hasn’t ended for millions of Americans out of work. It hasn’t ended for small businesses who can’t get credit. It hasn’t ended for the millions of Americans facing foreclosure. And now we learn that a new bailout of BofA could be in the works.

We learned from Ron Suskind’s new book Confidence Men that President Obama ordered the breakup of Citibank at the height of the crisis, but was stonewalled by Tim Geithner. The President’s instincts were good. Now he has an opportunity for a redo.

Most American’s have had it with bailouts of the big banks on Wall Street when so little has been done for Main Street.? ?Banks that are “too big to fail” are too big to exist.

Tell President Obama it’s time to break up Bank of America before it breaks us

~~ Mary Bottari

Related: Move Your Money Roundup

Posted by Gypsy Chief

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From Suzie Madrack on Crooks and Liars

Is there anything quite as exhilarating as knowing that, despite their posturing to the contrary, Big Banks took a real hit, thanks to a broad-based populist movement? Maybe we can move onto the cable behemoths next: “A Month Without Cable,” where everyone cancels their cable for a month and uses Netflix instead — I can dream, can’t I?

During “Bank Transfer Day” earlier this month, 40,000 Americans moved their money from the nation’s biggest banks to credit unions, voicing their distaste with the action’s of America’s financial behemoths. About 650,000 Americans joined credit unions in October, which is more people than in all of 2010 combined. According to cg42, a consulting firm that does work for the biggest banks, “the nation’s 10 biggest banks could stand to lose as much as $185 billion in deposits in the next year due to customer defections.” Of the banks, “Bank of America is the most vulnerable and could lose up to 10% of its customers and $42 billion in consumer deposits in the next year.”

Plus, you know, a lot less money to buy politicians!

Do Not Celebrate Too Soon, Suzie

Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress – Bloomberg

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

No wonder the 99% Occupy Wall Street. The message should be clear – if you have not already said goodby to your TBTF bank you should act now.

Posted by Gypsy Chief

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ACLU Colorado

Prof. Courtenay Daum, CSU Political Science Department, spoke last night to a packed house … it was Bill of Rights Day … her subject “The Roberts Supreme Court Comes of Age: How Did We Get Here and Where Are We Going?” The roots of the Roberts Court may be traced back to the Ronald Reagan administration. At the time the federal judiciary was deemed to have a liberal bias. Reagan took it as a priority to nominate conservative judges. Roughly half of the federal bench was appointed during the Reagan administration. Republicans held a Senate majority for six of the eight years of the Reagan era. The professor traced the careers of the five most conservative sitting Supreme Court Justices. /

Breaking: Chief justice urges progress

More info is here

After her initial presentation the audience had many questions; they moved the session into dialogue mode. Citizens United v. Federal Election Commission 130 S. Ct. 876 got the most questions along with the proper role of corporations in society. The recent District court ruling that a portion of The Health Care and Education Reconciliation Act of 2010 is unconstitutional makes it more likely that the Supreme Court will accept a case challenging the new health care law. She discussed two Second Amendment cases: District of Columbia vs. Heller 554 U.S. 290 (2008) and McDonald v Chicago 561 U. S. ___. On separation of church and state, an ACLU perennial, Daum said that challenges to the State of Kentucky creationist theme park are likely to be handled at a lower court level. A school voucher case is a more likely vehicle for the Roberts Court. [Perhaps a case such as Arizona Christian School Tuition Organization v Kathleen M. Winn, et al 09-987 - Gypsy Chief's comment]

The meeting sponsored by ACLU of Colorado was held at the
Coloradoan Community Meeting Room. Gypsy Chief estimates that there were just over 100 in attendance. Our previous story about this can be found here.

Daum also discussed what might have happened if President Obama had nominated Cass Sunstein and he had been confirmed. Would such a shift have pushed Justice Kennedy into the more conservative camp? Gypsy Chief, just being snarky, wondered if the Supreme Court would entertain a case in which South Georgia pigs and chickens banded together to sue their owners. See Giraffe et al vs. Chambliss on this blog. One of the high points for me was a discussion of judicial activism. Activism, Daum said, is a philosophy, not a political posture. The Roberts Court, beginning in its second term, has shown a proclivity toward overturning precedent, even recent precedent. There was also a comment that Chief Justice Earl Warren was a liberal. Frankly, I think that is wrong. As I’ve said before Earl Warren was a conservative bent on gradual continuous constitutional reform. This has a tradition which dates back to Edmund Burke’s Reflections on the Revolution in France.

Posted by Gypsy Chief

SCO Corp Vampires Lose Cause of Action

Groklaw has the story. Stewart Rules: Novell Wins! CASE CLOSED. What follows is a complete wrapup of the long standing case of SCO vs. Novell regarding intellectual property rights to Linux code. SCO has been maintaining that Linux users owe them licensing fees. They say that Linux is based on UNIX code that they, SCO own. See the Groklaw story for complete details of the ruling.

Could SCO appeal? Not too likely since SCO is in bankruptcy and they would have to get permission of the bankruptcy judge to spend any more money on this case. So it seems that a stake has been driven through the heart of this particular vampire.

In reporting this story Yahoo! Finance headlined SCO to Sponsor Next Season of “The Biggest Loser”. Their story is by John Paczkowski The author says this case may finally be over See the Yahoo! Finance article for their details

A good overall view, though dated may be found Wikipedia article on SCO-Linux_controversies One of the strangest parts of this melodrama was when SCO announced that they would not be suing its own customers. Good to know, huh?

Photo Credit: Mitzi Watson Photography

Posted by The GNUinator

Santa loading toys produced by slave labor.

Senator Max Baucus [D-MT] has introduced a bill, S1631, which among other things would ban the import of goods produced by child labor, convict labor, or slave labor.

The bill is co-sponsored by Senator Charles Grassley [R-IA] the ranking member of the Senate Finance Committee.

Business groups and the Heritage Foundation are working to relax this ban. A story by David Sirota gives the details. Search the Library of Congress website for text of the bill and its status.

Thanks to Rachel Maddow TRMS for bringing this to our attention.

The American people are smart enough to know that the goods they buy come from the store. So how could they be produced in any of these bad ways?

If you have moral objections to goods produced with child, convict, or slave labor, you might want to support this bill. If you believe goods produced this way compete unfairly with American workers, you might want to support this bill.

Posted by Gypsy Chief

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Monarchs WNBA Champs 2005

OK, I admit it. My so-called guy friends give me tons of grief when I tell them that I like the Sacramento Monarchs and watch their games.

“You actually watch that?”, one friend asked.

“What’s wrong with the Monarchs?”

“Well, they are a bunch of lesbians”, was the best he could come up with.

My Yahoo! home page lets me know whenever there is a Kings game or a Monarchs game. They don’t always get it right. Sometimes, very infrequently, Yahoo! will make a mistake regarding a Kings game. Wrong starting time, wrong score, whatever.

The Yahoo! track record for the Monarchs is much worse. Again and again Yahoo! reports the score as 0-0 after the game has been played. Or they will report no game when there is a game.

This has happened so often it cannot be a coincidence. The message Yahoo! conveys is that women’s sports is not as important as men’s sports. The WNBA is not as important as the NBA. Is that fair? Certainly the audience for women’s sports is smaller, but that is a different question. And I’d be the first to admit that the WNBA game is different than the NBA game. Still, those ‘lezzies’? are as competitive and as tough as the guys. I love a down-to-the-wire close game with plenty of lead changes. And that’s what I get from the Monarchs. Given the fact that the Monarchs won a WNBA championship (2005) and the Kings didn’t even make the playoffs this year I say go Monarchs. I’ll be watching provided Yahoo! remembers to let me know.

Yahoo! failure to assign resources plays right into the hands of misogynistic men who diss woman’s sports as an acceptable? way to be passive-aggressive. They can’t express disrespect to their wives, girlfriends, sisters or moms without being in trouble. So they diss woman’s sports instead. This makes them feel better. If Yahoo! fails to assign adequate resources to update their web content it must mean that the WNBA is inferior and not worth wasting time on. Heck, nobody’s watching anyway.

The remedy, I think, is for men who don’t hate women to squawk about this.

Complaints from women could be dismissed since they might be coming from [gasp] lesbians.

Yahoo! failure is a failure in sports scores reporting just as serious as it would be for them to consistently get it wrong regarding Kings scores and schedules. And men should speak up.

Posted by Gypsy Chief and Veronica

The End of Days

Tim LaHaye, co-author of the popular Left Behind series of novels appeared on Friday, Febuary 27, 2009 on the Rachel Maddow Show. Tim and Rachel discussed our new president Barack Obama and the assertion that he is moving the U. S. toward socialism. Mr. LaHaye said the Obama is definitely not the Anti-Christ because he is not popular enough.

By this measure, certainly Microsoft Corporation must be the Anti-Christ as many in the open source software movement suspected all along.

Posted by Gypsy Chief

NYSE: MCD 3 Month Chart

There is an Internet spoof going on. Do not fall for it. You get an email promising to add $200 to your account for filling out an eight question survey. As with email like this I turned on full message headers and forwarded it to spoof@mcdonalds.com. Two days later I got an unknown user message from the MAILER DAEMON. There is no email user at mcdonalds dot com known as spoof. Thinking this strange I logged on to McDonaldsto take a look. Buried deep within the site is a notice that McDonald’s is aware of this Internet spoof and is ‘investigating’ . This tells me that McDonald’s does not seek the public’s help in tracking down these criminals.

What Corporate Social Responsibility?

McDonald’s has zero corporate social responsibility for the spoof. This does not mean that they do not have a problem. By not enlisting the public’s help it seems to me that McDonald’s management exhibits a tone deafness to the real world we live in. It sure would not take much action for them to create an email user known as spoof to provide a place for the public to forward spoof emails.

Tracking Down Criminals

Win $200 With McDonald’s
Monday, February 9, 2009 6:31 AM
From McDonald`s Mon Feb 9 14:31:38 2009
Return-Path:
Authentication-Results: mta191.mail.mud.yahoo.com from=McDonalds.com; domainkeys=neutral (no sig); from=McDonalds.com; dkim=neutral (no sig)
Received: from 222.227.72.67 (EHLO ns.sjc-sendai.co.jp) (222.227.72.67) by mta191.mail.mud.yahoo.com with SMTP; Mon, 09 Feb 2009 06:43:25 -0800
Received: from User (static-70-100-8-246.br1.blu.wv.frontiernet.net [70.100.8.246]) (authenticated) by ns.sjc-sendai.co.jp (8.11.6p2/8.11.6) with ESMTP id n19EfLa15109; Mon, 9 Feb 2009 23:41:21 +0900
Message-Id: <200902091441.n19EfLa15109@ns.sjc-sendai.co.jp>
From:
“McDonald`s”

This is a portion of the full message headers I got.
Here is the actual link. Note that it does not point to McDonalds.
To access the form please click the link below :
“nofollow” href=”http://paupas.com/McDonalds/index.htm” target=”_blank”>http://www.McDonalds.com/online.survey/index.html
Who are they? In any event, I hope someone shuts them down. Sorry to see that McDonalds does not seek our help.

AARP Weighs In
Here is a good story from AARP with some details of this and other scams.
AARP Scam Alert
There are several good links as well.
Posted by The GNUinator