Wall Street Analysts Don’t Get It, February 5, 2014 by Neil Garfield

I am not in the habit of giving investment advice and I am not about to start. But it has come to my attention that there are numerous pundits who call themselves analysts that are pumping the stock of Bank of America. I know how this works, but besides the corruption their articles reflect a general consensus on Wall Street that is based on a false premise. In 2007 are predicted that the banks would show and announce losses and then show a steady stream of profits and potential profits. This was because they were essentially stealing money from the investors and committing other fraudulent acts against investors government-sponsored entities and virtually everyone else in the mortgage foreclosure business. In the context of an exploding or imploding “securitization” market where the trading in the bogus mortgage bonds was frozen, the banks would have drawn a lot of attention if they were all reporting the money they had taken as revenue or profit. I predicted that they would later bring that money back in on a steadily increasing basis laundering the stolen cash through the mortgage foreclosure process. One of the basic strategies they employed was the creation of the inclusion of proprietary trading profits that could not be easily audited or confirmed.

 During the period of the mortgage meltdown, the banks were reporting an increase in deposits and an increase in loans. The pundits who are writing articles at the behest of Bank of America and other institutions are looking at the surface of the reports instead of drilling down and doing the analysis that should be done before they open their mouths and say something about the value of the stock. 

They still don’t get that the increase in deposits and the increase in loans was completely fake. The “deposits” were really investments from pension funds and the like who thought they were buying mortgage bonds. Instead of brokering the transaction Bank of America took the money in as a deposit. Instead of sending the money to the REMIC trust that “issued” the “mortgage bonds” from the “trust” that didn’t have a cent of money or assets and no revenue stream to pay on the bonds, Bank of America skimmed up to 25% off the top and then created a fake underwriting portfolio where loans were originated or acquired to make it look like the securitization game was on.  That is what accounted for the increase in loans reported by the banks.

But to complete the fraud they issued the bonds in the name of the broker dealer (street name) and issued the promissory notes from borrowers to nominees, which was the equivalent of “street name.”  In most cases the delivery of the promissory note was never completed and certainly never given to the strawman that served as the originator of the loan and was named on the note and mortgage. The investors didn’t stand a chance. And the stockholders of BAC don’t stand a chance either because the cover-up is falling apart. Now the last ditch effort to pretend the loans were not securitized when they are in foreclosure litigation (reverting back to the original strategy in place 2001-2009) is also failing because lawyers are smelling blood in the water. When BAC comes down it will be faster and sooner than any of the pundits can imagine.

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