Pillaging the American Tax Payer – how it’s done.

Two headlines which when put together tell the story that the financial press has not seen fit to point out.

Headline one from The Wall Street Journal –  BofA Sells Part of Mortgage Portfolio to Fannie Mae

will deliver the rights to process and collect payments on a pool of 400,000 loans with an unpaid principal balance of $73 billion, people familiar with the deal said. The purchase price is more than $500 million….

What is not clear to me is if the bank is still liable for defaults on the principle or if Fannie Mae has taken that as well as just the business of managing the collections.  But even if it is just the latter the public purse has just paid BoA half a billion. If Fannie has taken on the liability for defaults on the principle then the bill will go a lot higher. This group of mortgages already has a 13% delinquency rate and are in default hot spots.

The second article tells how Fannie Mae revealed just a week ago that it would itself need another $5.1 billion in Tax payers bail out money to stay solvent for a while longer.

Now when I put the two together and what I see is BoA being granted another bail out from the tax payer but having it disguised by laundering it through a ‘deal’ with Fannie Mae. But that is obviously not what the Financial Class want anyone to understand. So The Washington Post article makes sure that the reader is carefully guided to the ‘right’ view.  Mr James Gattuso of the arch neo-con think thank, The Heritage Foundation, is brought in to guide the readers thinking in the desired direction.

“No one should be surprised by the request for more funding,” said Heritage Foundation’s James Gattuso.

“It’s a reminder that while the other bailouts that began in 2008 have been or are being resolved, the taxpayer bailout of Fannie and Freddie are continuing,” said Gattuso.

Breathtaking is it not! Gattuso crams more lies and distortion in to one sentence than I imagined possible.   Mr Gattuso turns the truth inside out to claim that while ‘other bail outs’ by which he intends you to understand, those given to help the private banks, are all now ‘resolved’, the dreadful public entities, which The Heritage Foundation hate so much, they are still being bailed out.  No mention of the fact that  Banks like BoA blatantly lied to Fannie and Freddie about the real value of the mortgages they unloaded on to them.

BoA blatantly lied about mortgages it unloaded on to Fannie Mae. and which Fannie is now trying to force back on to BoA. This story was also in the headlines only a few days ago. Here is Bloomberg’s report. That Bank of America’s lies were systemic and intentional is supported by the fact that AIG is now also suing BoA for lying.

I don’t know what I find more amazing – Mr Gattuso’s fantastic ideological determination to claim that ‘other bail outs have been resolved’ or the willingness of Fannie Mae to still bail out the charlatans of Charlotte (BoA headquarters) yet again.

All that is clear is the way the banks, the government bureaucrats, the free market/neo con think tanks and the financial press collude to lie an loot the public at every turn.