At the end of March I wrote about how greed and deregulation created "Ponzi-like" market conditions that made Countrywide a success, a failure, and then (ultimately) an attractive investment opportunity for Bank of America. Homeowners were worse off but things couldn't be better for the executives and the "vulture" investors because of the subsidies.
A week later I then explained how the primary culprits behind Countrywide's problems were walking away rich. In the post I highlighted how former Countrywide president Sanford Kurland had secured a new job where his knowledge of "where Countrywide's financial toxic waste is buried" would make him even more money.
One week later I outlined how the federal government was ultimately going to bailout the entire banking industry by taking on the high risk loans of the housing industry.
Today, I present to you The Mother of All Financial Stupidity (at least for the moment) ... It appears that the American taxpayer is now going to fund the Bank of America takeover of Countrywide.
And just how are we going to do this, you ask? Simple. By allowing Bank of America to write-off the losses of newly purchased (but still floundering) Countrywide. It's kind of complicated, but you can read all about it here at Bloomberg.com.
So, this is what we got.
After weathering Countrywide's greed-laced, and government driven, boom & bust cycle ... after being slapped in the face as those responsible for Countrywide's mess walked away rich and into new jobs ... after virtually guaranteeing that the housing and financial industry's troubled loans would be subsidized by the American taxpayer ... it now looks like the American taxpayer is also going to foot the bill for Bank of America's takeover of Countrywide too (which, by the way, gives them a technically illegal 10.9% of industry market share).
Perhaps I'm wrong, but didn't we fight a Cold War to discredit and overthrow market socialism?
- Mark
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