Assange Bank of America strike ‘imminent’ say sources.
Informed sources in New York last night were suggesting that the main ‘smoking gun’ in the stolen Bank of America files in Wikileaks’ possession is “the creation of fraudulent loans ready for repackaging on a massive scale”. During the US housing bubble, most top banking firms either repackaged or sold on sub-prime loans for slicing into deliberately indecipherable credit swaps. But very few have been fingered for knowingly doctoring loan forms – and to date nobody has been charged with falsification as a company policy…where the evidence consists of an electronic record.
Julian Assange is a control-freak and nascent megalomaniac, but he is also a very sharp cookie. Rumours are circulating around the edges of his Barmy Army that the self-styled Messiah has been biding his time, aiming to hit Bank of America with a cast-iron charge just when CEO Brian Moynihan least needs it.
If your sense of humour is as eccentric as mine, this whole episode was giggle-inducing from the off. For as BoA played the gliding swan – ‘categorically denying’ last November 10th that they were the firm in Wikileaks’ sights – we now know that the Bank’s internal security had been engaged in a mass headless-chicken search for the guilty for four days before that time.
BoA is already in a lot of trouble, and still has to clear away huge dollops of smelly stuff with or without a Wikileaks strike. The bank paid $2.8 billion last week to government-owned companies Fannie Mae and Freddie Mac to settle claims that the bank sold them defective mortgages. That’s a whole lot of guilt reparations to pay, but not enough according to California Democrat Representative Maxine Waters, who said yesterday, “This settlement may have been both premature and a giveaway”. The settlement was “clearly a gift” to Bank of America, added Chris Whalen, co-founder of Institutional Risk Analytics.
The total sum the F&Fs had to write off thanks to BoA’s challenged ethics amounted to just under £110 billion, or roughly the current UK NHS budget. So getting away with a 2% fine does seem to be something of a result for Bank of America.
But it’s the timing issue that’s key. After two States sued BoA for foreclosure fraud last year, another $ 4billion went out the door, and the share price slid downwards disturbingly….by 11%, the second worst performance in the sector.
Timing apart, Assange is also perhaps showing that, like all psycho hunters, he knows to pick off the weak herd member.
“Moynihan needs to win the confidence of the markets, which he obviously doesn’t have now,” said the wonderfully named Marty Mosby, master of understatmement, and the Tennessee-based analyst at Guggenheim Securities, “If he doesn’t do well in 2011, it will be hard to change that perception.”
Actually, power fantasist or not, Julian Assange could very easily sink Bank of America if tonight’s US rumours are true. We know that he has 5Gb of hard-drive data, we know it relates to deals done in 2008, and we know it’s from a senior player. In the light of this, top BoA staffer Bruce Thompson has been appointed chief risk officer, a job akin to being made chief iceberg-spotter just as the Titanic’s stern was lifting itself out of the Atlantic. (Bank insiders are admitting that the game is now damage limitation: allegedly, Moynihan already knows what the hard-drive contains.)
The BoA ‘defence’ strategy meanwhile continues its descent into farce. The company has bought up hundreds of abusive domain names that Wiki might use to launch the leaks – last month the company purchased a number of domains for CEO Brian Moynihan. These included BrianMoynihanBlows.com, BrianMoynihanSucks.com, BrianTMoynihanBlows.com, and BrianTMoynihanSucks.com. One’s left wondering if they also bought ohchristwe’ref**ked.com.
Assange clearly thinks he’s in the Big League now. For him, the adversary is the US Government and its corrupt economic system. The wet dream for the Wikileaks founder would be for BoA to collapse, and a frightened Washington to back off. All he needs now is the white cat and black patch, and he will be the compleat Bond villain.
The American public is inured to nefarious banking. Fraudulent home loans are old hat – and as with many Wikileaks to date, that BoA should’ve had a production line churning them out will not come as too much of a surprise.
The real danger for Moynihan and Washington is the class action writs from business partners that could so easily follow the confirmation of malicious malfeasance by the bank. These would immediately become liabilities, and BoA’s share price would plummet accordingly. Also, arrests don’t play well with the shareholders.
But would it collapse the banking system? No: it could be spun as a one-off. As the share price dives, someone – JPM? – would step in to pick over the carcass. And will Washington back off? Why should they now? I thought they were mad to try and prosecute Assange in the first place; but now they’re off down that road, I suspect it’s a case of in for a penny, in for a Pound