|It was only a matter of time. A few weeks after every money losing firm in the US and the kitchen sink disclosed it would sue Bank of America in an accelerating attempt to salvage something through litigation, the worst case scenario for Brian Moynhian just got real. As of minutes ago, Norway’s Government Pension Fund, which is another name for its Sovereign
Wealth Fund, has just announced it is suing Bank of America for mortgage fraud. Not only that but it is also going after Countrywide, obviously, but far more importantly, is also suing KPGM, the auditor on the Countrywide transaction, and, drumroll, ole’ Agent Orange himself. If US bank analysts were busy quantifying the damages from every bank in the US suing BofA, just wait until the calculation is expanded to included every firm that bought mortgages from Bank of America… ever…in the entire world.
And just like the US lawsuit spigot opened ever so slowly at first, it is now gushing, and is absolutely certain that every company (ahem insolvent German banks) that ever bought a mortgage from Countrywide, Merrill and Bank of America will serve the local branch of the bank with a summons over the next month.
All those wondering just what rainy day BofA and all other banks had been conserving their ever growing cash stash for, just got their answer.
And the funniest, or saddest depending on one’s perspective, thing is: insolvent European banks, as long as they bought any toxic bonds without doing much if any homework, are about to pad their empty coffers courtesy of America’s biggest bank… which in turn will lead to TARP 2, better known as the taxpayer funded bailout of European bank with a Bank of America conduit.