I am no expert on Wall Street shenanigans or the economy more generally, but thanks to The Automatic Earth, it’s always possible to see what’s being reported in business news, with a bit of insight into the bigger picture. (I suppose I should also shout out Barry Ritholtz’s The Big Picture since that’s where they picked up on the story I’m sharing here… but I’d have to say that The Automatic Earth presents a much bigger picture).
While corporate media makes big noise about inaugural pageantry in Boston and in Washington DC, and even less meaningful distractions, some incredible Wall Street maneuvering is happening without much fanfare.
In what Ritholtz calls a “back door bailout of the banks”, Freddie Mac and Fannie Mae have been negotiating with Bank of America, JP Morgan and others who sold them no-verification “liars loans”, namely via “buy back demands.”
Bank of America just settled these demands with Freddie Mac and Fannie Mae for a total of $4.1 billion. But the Freddie deal is particularly insidious.