Lionized? You're Kidding, Right?

Look at how Bloomberg is treating BAC's resignation:

Oct. 1 (Bloomberg) -- Kenneth D. Lewis bet Bank of America Corp.’s future on America at a time when America went bust.

Lewis, 62, said yesterday he will resign as chief executive officer at the end of the year, leaving his successor to capitalize on, or salvage, the acquisitions that led to his downfall. The bank didn’t name a replacement.

Yeah, such a bet.  "We'll play 'give me bailout or the puppy dies!'" games along with Bernanke, raiding not one but two companies (don't forget Countrywide!), was a huge part of people getting tossed out of their homes on their ear, was a major funding and "partner" with ACORN (just-recently "suspended") and more.

Bank of America is one of the "bad guys" in transaction re-ordering too:

A few weeks ago, Bank of America hit the Chicago marketing man with a $35 overdraft fee when he had more than $130 in his account. The bank was apparently “holding” his money for charges that hadn’t cleared — only they appear to have been holding three times more than he actually spent. Then, if that wasn’t enough, they “reordered” his subsequent purchases in a way that tripled his overdraft charges. Within a couple days, he had racked up $140 in fees.

Let's not even talk about "authorization holds" - that's yet another sneaky trick (this is where a gas station will place a hold for $50 on your account when you swipe your card; if you buy $20 in gas, the other $30 can remain "held" for as much as five days!)  Or shall we talk about ATMs and online balance systems showing uncleared funds as part of your "balance", thereby encouraging you to overdraw your account - and allowing it at an ATM without a warning that it will incur an overdraft fee too!

Now to be fair Bank of America says they're changing some of these policies with implementation dates out into the middle of next year. 

But to also be fair I must point out that until there was a threat of legislation banks refused to stop this blatant robbery - tactics that hit consumers at the lowest end of the economic strata the hardest.

Was Ken Lewis forced out?  Nobody's admitting it if so, which brings up another question - why not?

The better question from my perspective is why any of us in America tolerate this garbage.  There are alternatives, and when it comes to blatantly unfair practices boycotts, moving business to credit unions and bringing pressure on your state attorneys general to file criminal complaints and suits for blatantly unfair practices are three of those alternatives that in my opinion every American should be considering.

Finally, as I have written about dozens of times, we are starting to see more notice in the mainstream press on the hiding of losses on bank balance sheets:

Georgian’s clean-up will be unusually costly. The book value of Georgian’s assets was $2 billion as of July 24, about the same as the bank’s deposit liabilities, according to a Federal Deposit Insurance Corp. press release. The FDIC estimates the collapse will cost its insurance fund $892 million, or 45 percent of the bank’s assets. That percentage was almost double the average for this year’s 95 U.S. bank failures, and it was the highest among the 10 largest ones.

Right.  Colonial anyone?  But look at what Jonathan says:

The cost of Georgian’s failure confirms that the bank’s asset values were too optimistic.

OPTIMISTIC?

"Estimating" the value of a bucket of "assets" at nearly double what their realistic market value happens to be is "optimistic"?  I can see being off by 5% or maybe 10% as "optimistic", but nearly half is a matter of "optimism"?

I can think of a handful of other adjectives that better describe this situation, which we have seen repeated over and over during this fiasco.  How about "Scam"?  "Ripoff"?  "Charade"?  "Myth"?

Or perhaps we should use the word that would be used were I try to pull something like this in essentially any other line of work (and which, by the way, was used repeatedly when this sort of "optimistic" valuations were exposed after the .COM blowup):

FELONY

That's right folks.

One can argue that people are being "optimistic" in a vacuum with single instances, but when you keep seeing bank failure after bank failure - nearly 100 of them now - where balance sheets are universally overvaluing claimed "assets" .vs. their disposition value at some point you have to call this what it is: a pattern of intentional conduct designed to deceive regulators and the public as to the condition of these institutions.

And that folks, is not a mistake.

It is, in my opinion, a criminal offense, and one that every member of the board of these banks, along with their auditors, should be answering for.

We are far beyond where we should have been demanding full forensic audits of every bank in the nation to determine the extent to which "loss hiding" through "optimistic" valuations have infested those institutions we call "too big to fail", along with the community and mid-sized banks.

Why? 

Because it is a criminal offense to intentionally overstate asset valuations in a publicly-traded company, and especially post-SARBOX, doing so is a not just a civil matter of screwing shareholders for which one can be sued, it is a crime (18 USC Sec 1519, up to 20 years in prison.) 

While not all of these firms have been public companies, a good number of them were and are.

How blatant and outrageous does the "optimism" need to be before criminal indictments are handed up in these cases?

We can pass all the laws we want but if they remain unenforced then their value in protecting the public and deterring the blatant looting that has gone on over the last decade is in fact zero.

STOP THE LOOTING AND START PROSECUTING