Turn On The Lights, Watch The Roaches Scatter, Part 29

Bloomberg's Jon Weil thinks the banks just don't understand how much trouble they are in as part of Foreclosuregate.  Weil couldn't be more incorrect, but we'll get to that in a moment.  First, his take concludes with this:

Bank of America, for instance, this week said it would re- open about 102,000 foreclosure actions in 23 states, after concluding that “the basis for our foreclosure decisions is accurate.” The bank released that statement 10 days after it said it would halt foreclosure sales nationwide, pending a review of its procedures. It’s hard to believe a review completed so quickly could have been very thorough.

The banks have only themselves to blame for the fix they’re in. Three years ago, as the subprime mortgage crisis began to spiral, one of the lessons the public should have learned is that the leaders of these companies often have no idea what’s going on inside them. We may be witnessing the same phenomenon again. There’s no excuse this time for anyone to be surprised.


Let me explain something to you, Jonny boy.  The banks know exactly how much trouble they are in, particularly Bank of America.  They're counting on three things:

• Plausible Deniability, which Weil is helping to provide.  These banks are too big to know what's going on inside, and it's all the broke welfare queens living in McMansions!
• A compliant Congress, which means more corporate-friendly types who will want to help the banks.
• A weakening economy, which gives the banks more hostage leverage as the housing market continues to crumble.

All that of course leads up to the real goal:  TARP 2 and new "oversight" from the Republicans that includes laws to exonerate the banks of all this mess.  Better yet, the Republicans will simply say all this happened on Obama's watch, so we clearly need new laws to make sure this never happens again.  Bang.  TARP 2 and get out of jail cards for everyone. 

So yes, the banks playing dumb and blaming homeowners and their greedy lawyers is exactly what the plan is, and they are executing it perfectly.  And we'll get stuck with the bill once again.