Yo Ho Ho And A Bottle Of Your Finest.

Wow. Can you believe this? Uncle Sam, in the form of FHFA (it's all about oversight of Fannie Mae and Freddie Mac), is bringing suit against the largest banks in the country and international ones too, over the packaged mortgage securities they put together and sold to Fannie and Freddie. We're talking about banks like Bank of America and J.P. Morgan to name just two. And we're talking about multi tens of billion of dollars each. So now we're hearing this could cause these banks to do less lending. Less Lending? Isn't that what's causing the Recession to be so slow to recover? Aren't banks being too slow to part with the buck now? So what's the downside to these suits? And why now? Turns out the statute of limitations runs out in a week or so if they don't file a suit. Another thing is they've been negotiating with the banks to settle out of court. But if the statute runs out, without a suit in place, the banks are free. Of course the banks wouldn't have noticed that little thing, and I'm surprised the government did. I don't think the government really wants to go to trials, and now maybe they won't have to. But given my druthers, I'd druther they did take the banks to court. It would be the first real spanking the banks got for all the trouble they caused over these toxic assets they sold. Too bad nobody has gone to jail  either. In fact that's the real shame of this whole thing. Ya know, if there's no punishment for wrongdoing, don't you think future bank execs and securities bundlers will just do it all over again? I mean, they made multi-millions each for putting these toxic assets together and selling them as AAA deals. With not even a slap on the wrist. Don't you suppose that's a lesson they won't forget? The worst thing about it is that we had to pay for it all. Yep. When it came time to pay the tab, the only ones still sitting at the table were the taxpayers. The bankers and bundlers were all gone. Presumably gone for a cruise on their yachts. I wonder if they all had the same destinations in mind? Someplace with lots of pidgeons I'll wager.