by Charlie Gasparino Info
Charlie Gasparino is a senior correspondent for Fox Business Network. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His latest book, Bought and Paid For, is about the Obama administration and Wall Street.
With Assange's next release apparently targeting Bank of America, traders fear a subprime lending scandal will be exposed. Charlie Gasparino talks with someone who has read the leaked files.
WikiLeaks founder Julian Assange has declared Bank of America his next target, and despite official statements declaring they have "no indication" of an imminent attack, the bank is taking this threat very seriously, and has responded, according to several insiders, by convening a "legal SWAT team," ready to respond the very minute documents are made public.
So what makes Bank of America so worried? While Bank of America is telling reporters that it has investigated a possible document leak and hasn't found any, one source who claims to have read some of the documents held by WikiLeaks confirms that they do in fact involve Bank of America. Adding to the mystery, however, this source says that they found it difficult to determine just what they mean. Given that Wall Street's straightforward business—buying and selling, borrowing and lending—now requires a math Ph.D. to understand, this shouldn't be too shocking. (The bank itself is so big and convoluted, insiders there admit, that a leak could have easily slipped by corporate security, despite the official denials.)
Still, while it appears virtually impossible for Assange to have the kind of dirt on Bank of America that caused such tumult for the diplomatic world—what kind of revelations, short of murder, would shock the world about Wall Street anymore?—speculation about it is still causing billions of dollars in damage.
Last week, when news of the possible WikiLeak attack first broke, shares of Bank of America fell more than 10 percent. It recovered later in the week, first after I reported on the Fox Business Network that BofA didn't have an "indication" of a WikiLeaks attack, and then after Goldman Sachs made positive comments about the performance of the entire banking sector.
But Wall Street traders understood that one potential "unknown" is very well known. Specifically, BofA's relationship with Countrywide Financial, the troubled "subprime" lender BofA purchased in early 2008. At the time, it looked like such a good deal: The financial crisis had yet to peak, Countrywide remained a major player in the mortgage lending market, and was expected to recover along with the economy.
But the economy, as we're all aware, didn't recover, and many of Countrywide's mortgages, focused on the least creditworthy borrowers, have fallen into default. And here's the problem for Bank of America: Its mortgage origination business, like the rest of that industry, probably witnessed rampant fraud during the bubble years. Banks made loans to borrowers without proper documentation of employment and other pertinent information. Since Countrywide focused on the low end of the market, the so-called subprime market where people who borrowed money have lousy credit histories, it's only logical to assume many of those loans were at least risky, if not made fraudulently.
When the WikiLeaks issue emerged, BofA's shares began to tank.
A Bank of America billboard dominates a street corner in Times Square on Apr. 21, 2009 in New York City. (Photo: Spencer Platt / Getty Images)
• Philip Shenon: U.S. Embassy Shakeup Planned • Dayo Olopade: Guarding the State Dept.’s Secrets• Full Coverage of WikiLeaksThis is just an educated guess: I have no evidence whether Countrywide's lending practices were so lax (and some would say corrupt) that loans were made to people who either lied about their finances or had mortgage brokers lie about that information. But it's the same educated guess made by many sophisticated traders last week when the WikiLeaks issue emerged, and BofA's shares began to tank.
Keep in mind, the reason Countrywide could make loans to anyone with a heartbeat and possibly no job is because those loans could be sold off its books and then packaged into mortgage-backed securities. But if those loans were fraudulent, they could be "put" or sold back to Bank of America. A group of large investors in mortgage bonds holding Countrywide loans are already threatening such action. This group includes both companies like money management powerhouse Blackrock and the New York Fed, which holds the toxic mortgage bonds of bailed-out banks like Bear Stearns.
This, at the end of the day, may well explain why Julian Assange spooks BofA so.
Charlie Gasparino is a senior correspondent for Fox Business Network. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His latest book, Bought and Paid For, is about the Obama administration and Wall Street.
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"Last week, when news of the possible WikiLeak attack first broke, shares of Bank of America fell more than 10 percent. It recovered later in the week, first after I reported on the Fox Business Network that BofA didn't have an "indication" of a WikiLeaks attack, " So your the reason the first reason the stock started to bounce. If you get your business news from Fox Business your a fool. Got a call a spade a spade. Fascism (pronounced /%u02C8fæ%u0283%u026Az%u0259m/) is a radical and authoritarian nationalist political ideology. Fascists seek to organize a nation according to corporatist perspectives, values, and systems, including the political system and the economy. Sounds like the Republican party doesn't it.
You didn't finish your opening quote which continues "and then after Goldman Sachs made positive comments about the performance of the entire banking sector." Amazing isn't it how Wall Street's Goldman Sachs, one of the biggest players contributing to the 2008 financial meltdown, has any credibility left to move the banking sector of the market.
Southpaw, I don't think it's an issue of credibility but a position derived from their Balance Sheets, which are tissues of lies. The Bank Lobbyists are working hard to obscure the toxicity of assets, and also need to protect their Boards from charges of conspiracy. What we know about Goldman Sachs, Citibank, BofA ad nauseum -- doesn't matter to the ruling class.
bank talk really brings out the crazies
hippie, yes, Bank of America is the Enron of the financial industry, as well as being the most abusive. Legal SWAT team, indeed. That's how BofA has always operated, with a management tool box full of sledge hammers. Why anyone in their right mind would do business with that sleazy bunch is beyond me.
"Banks made loans to borrowers without proper documentation of employment and other pertinent information. Since Countrywide focused on the low end of the market, the so-called subprime market where people who borrowed money have lousy credit histories, it's only logical to assume many of those loans were at least risky, if not made fraudulently." Just so we are clear, the fraud here was on the part of the person who was applying and swore in the loan documents to what their stated income was. Overall it was the government who encouraged, and pointed out Countrywide for special praise, the establishment of "flexible lending criterion" who made this kind of loan rampant. Freddie Mac was quit anxious to buy up these loans. GS's analysts are just crunching the numbers and providing their analysis. They arent the banking side.
The Democratic Party is just as seedy, sleazy and morally bankrupt, they just think they can hide it better. When will you sheep learn that all political parties are nothing but Gangs of Mobsters lining their pockets and getting high on power and corruption. No party stands for anything anymore, it's each for themselves, the less importance we give them, the smarter we are and the better off we'll be. Our entire political system has to be rebuild and rethought. It is beyond repair, the only way is to start all over again with new logical and practical ideas.
Read: ALL THE DEVILS ARE HERE: The Hidden History of the Financial Crisis Every American should know the circumstances and names of the companies and the people who brought our country's finances and working people to our knees. Every American should know how stockholders, if they turned a blind eye and had no qualms, made their big bucks on our backs. The Ethics of Business, when left to regulate itself, produces harm to our country. It is not all about politics - it is about Business and Our Country. It may take a Phd. to understand it all, but even an idiot who reads knows when something is underhanded and not in the best interests of the people - Our Country. As long as the political parties are at each others' throats, Business goes along willy-nilly, scott free! We need to look at the reasons people who talk at us say what they do, when they do, and who benefits from it. What are diversions and what are smokescreens. it is time The People work together - that is the one thing that will scare Business out of its hoarding and in to REPLACING money back into our economy.
Fascism is a radical and authoritarian nationalist political ideology. Fascists seek to organize a nation according to corporatist perspectives, values, and systems, including the political system and the economy.
As the US job creation machine sputters to a halt, it's increasingly clear that the banksters including Lloyd Bansterfein have raped this country, and their butt boys on Capitol Hill have helped them get away with this. And this continues and both the Tea Partiers and the Obamistas bend over for Wall St. Never have so few stolen so much from so many.... George Patton
GPatton,those are my words.They,politicians,govt,bankrers,wallstreet,&others,have raped and ravaged this country.In sooooo many ways.Why should anyone be worried,nothing happens (to the powerfull and mega rich)in this country(only to the small people).No one pays ,Mozillo paid some millions, but No one is put in jail,thrown out of office,stripped of their benefits or funds.Most of all they are bailed out,helped restructured,and business continues as always.What has happened to the innocent citizen,who those sharks sunk their teeth in ,who bailed them out? They gave the money back to the same ones.""Dear G-d,please keep Mr Julian safe ,so he can pour out all the truth,and nothing but the truth.""Yes,the loans were given to cats and dogs and flying birds. Attorneys, line up.tAr,least someone has to benefit besides them.Please attorenys, lawyers, help and also take on the little people.,even Pro Bono. Help and represent all. Two years ago, mortgages should have been tackled, fixed the good the bad and the ugly and the country would be thriving.......Those shackled with those abusive mafia style lending,cannot get on their feet.They drag the system. """ What can be so bad short of murder?raping and ravaging citizens and destroying them,is the same as murder.""""""Shock wall street.So many know it,so many made fortunes,with them.Nothing can shock wall street.Many were part of it.
It's incredible, I actually prefer the tea party's bs to this anti-bank craziness. at least the tea party is crazy about doing nothing, so they won't break anything in the time they have left before the country becomes sane again. however, a powerful movement of people like you could do some serious damage to civilization.
It's so true, Banks make money from trading now. It could be houses in Second Life for all they care, they just need something to trade. Some people I knew that worked at Wachovia were making insane money, wining and dining investors, I really thought "wow, I think I picked the wrong field". Software engineer was seeming like a stupid move since I didn't live in Bangalore. But as things so often remind us, when it looks too good to be true it is. The people that were in it were drunk on promotions and bonuses, how can you blame them it's like going to the mall and everything's a dollar. Everyone was buying everything. The economy grows when banks loan to people who are working hard to make money and pay the banks back so they can lend it out again. The economy collapses when backs suck money out of the economy and use it to buy and sell stuff. Especially when the stuff runs out so they have to start fudging to create enough new stuff to keep the party going. Obama my now debunked white knight unfortunately sees a windmill instead of a dragon with bankers running wild on wall street. He is preoccupied with trying to win the unwinnable war in Afghanistan while a more dangerous threat to America is allowed block the fading prospect of a strong economic recovery. Bloomberg 2012?
GPatton: The bad loans were a sysmptom of a deeper problem; a pronounced decline in the number of people who could qualify for traditional loans. Globalization, the ability of U.S. corporations to escape domestic environmental and labor standards while still accessing U.S., markets is the root cause of both the financial meltdown and our continuing economic problems. The idea behind globalization was to put downward pressure on U.S. wages and it worked, is still working, all too well. Global U.S. corporations don't care, and don't suffer, from reduced U.S. demand because the whole world, more-or-less, is now their market. This is not true for U.S. labor, and the government gets stuck with the tab to maintain the unemployed at even a subsistence level. There is no civic or social responsibility. Think England in the mid 19th century.
I can't help but think...you're missing the point Mr Charlie Gasparino. No offence intended. The "sub prime" thing strikes me as a red herring - it's an obvious and easy target - but it's the end result. The question is, not whether banks, wall street, mortgage companies sold people bad deals. The evidence is in on that one. We can safely say that's so. Of course they did. Was there collusion? Of course there was. Was there insider deals? Of course there was and still are. Was the oversight? Of course there wasn't. I think the real question is how naked does the emperor have to be before someone calls it and tells him to put something over his naked self. That's the question. If another deluge of documents released via wiki-leaks helps open peoples eyes, then so be it. Wiki-leaks is a conduit not a writer or a politician or a banker - it's a sluice. Apparently we need a sluice to plumb all the dirty nasty smelly crap without filters so we can digest it and make our own decisions. But I think Charlie Gasparino you miss the point when you ask inane questions like whether or not countrywide were lax in their lending of mortgages. Of course they were. But that's not the question is it? The question is - how high is the tide of crap, like how deep does one have to dig to find the low tide line - the question is really - does any major corporation, politician, NGO really truly have an ethical compass? That is the real question
Why do traders fear a subprime lending scandal if they haven't read the leaks? With such specific fears, I can only conclude that they know it is true. Their overly specific fear says it all. I have always admired the US for the great contributions it has made. Maybe someday I will get a chance to visit. But, looking at the US 8,000 miles away, I feel very sad for all of its recent problems and its dramatic loss of power and influence.
The US is a great country and I do enjoy being here. However, after seeing the poor decisions that have been made regarding the deregulation of our markets (beginning with Ronald Reagan in 1980) and continued deregulation and MORE deregulation during Bush Sr's, Bill Clinton's, Bush Jr's, and Obama's administrations, our economic problems have gotten worse and will continue to erode our system for years to come as the insatiable greed of Wall Street continues. We all know Wall Street fat cats are greedy; they're the whole reason why the whole bank collapses happened in the first place. Our economic system is essentially a game of roulette; we may win big for a while, but when we lose, we lose everything we have. The problem will continue to get worse, and I'm not saying this because of my own pessimism. I'm saying this because of how close Wall Street is to the leaders of this country. It's only a matter of time before a plutocracy is established, that is, a political and financial system ruled by the rich to serve the rich and rape the lower classes. Oh wait, that's already happened.
That's not how traders work. If they don't know something they figure somebody else does. What they really fear is being left holding the bag, so they sell when they get nervous - they can always buy back again.
If we're really lucky the Wikileaks regarding BofA will document that the players knew they were engaging in fraudulent activities. We need a real smoking gun, not so much for the public, but for the members of Congress. If there is real evidence of double dealing, favors, and turning a blind eye it might move Congress to start cooperating with this administration and stop stalling. Deregulating the banks, like NAFTA, had far reaching negative consequences and still Congress refuses to put in the safeguards the public demands. Until members are caught in the BofA bathroom with their pants down, nothing will change.
Mixplix,but many in the public are crushed. carrying the weight of the frauds. We are not talking about a wannabe, walking in and getting a bigger house they could not afford.Anyway, where were the safeguards so that wanabe did not get the house?The realtor made money ,the cities with illegal tax values,appraisers,insurances,and then the banks backed up by wallstreet and govt.?...They gave the loan even if the person was not there. To a rock a broom,a homeless.There were points and benefits and quotas and packaging and sending it abroad.so many got bundled up,innocently........not so much for the public.? The public needs to be saved.They cannot breathe.,afford lawsuits,pay ,and be ruined. They should have been released.Long,ago..................................But,"If there is real evidence of double dealing,favors,and turning,a blind eye,it might move congress.""""Where were they. The congress those in charge, overseeing,the agencies, it was evident, people and countries and I guess,our govt.?Our politicians have been blind.Anyway the leaks are out there,no one should fear , only they will get censure.! And more money to contiue functioning.
Mixplix,all safeguards and agencies and all were there. They were not done.We do not need more and bigger,We needed them to do their jobs. We need our politicians to be ethical and caring and concerned and working for the welfare of the economy,monitoring,the money being given out.for the people. They did not.But the huge Washington crew is rewarded."pants down"To care you have to have dignity,integrity,respect and trust.Real concern for the results for your country.,your citizens and others.There might be some who really are caught with the pants,down,but to tell you the truth,Many,many lowered the pants and skirts themselves.maybe that is what Mr Assange can show.Remember,we are global.This is a multi,world event.Our bailouts half of them went abroad. To banks abroad.(and who knows who else.)Many,profitted.At the end nothing gets done,anyway.They will discuss it,and nothing gets done.There are no figures representing the livelyhoods& answering citizens.problems. Disconnect continues,there,is fear,& but no solutions.(for the little working, business, persons,families,innovators,those who hire& fire.)The people need good results
How about serious Jail Time? My retirement fund was placed in questionable Hedge Funds and tanked, no one went to jail.. Why?
Assange and any server company that publishes internal emails or documents from a corporation like BOA faces huge problems...especially the server companies. Basically, Assange can be held accountable for selling stolen property and the server companies can be held accountable for knowingly receiving stolen property. It's black letter law and BOA has deep pockets to assert such a challenge. Entities like BOA have a right to their secrets, we the public at large do not under the law have the right to that information. If you owned stock, you may have that right. If BOA still had TARP funds, it could possibly be compelled to disclose. I'm no fan of BOA and its business practices or recent business judgement. It's purchase of Countrywide made me sell the stock I owned in it- I could not see the wisdom of a solvent bank which BOA was , buying a mangy dog with fleas like Countrywide at the time. I also believe that former Chairman Ken Lewis should be personally sued along with Paulson for forcing the purchase of an almost bankrupt Merrill Lynch at the end of 2008, it was extortion pure and simple. But all that does not excuse Assange for trafficking in stolen goods. If he dumps the information, God or Gaia help him because corporate entities do not play nice. They'll employ the old 19th century industrialist mantra of , suing you takes too long, I'll just destroy you. Assange is not some hero or crusader, he's a sociopath that is looking for his own aggrandizement and whereas he may not be making much money off of this, his currency is ego, he wants to show how smart and powerful he is. I guess that is to make up for his problems with women in Sweden.
If you can get governments and large corporations in a panic with one website, you must be doing something right.
Got no beef with the governmental stuff being leaked although there has not been much leaked that has not already been known. But BOA is not a government, it is the private sector and they are entitled by law to keep their secrets secret unless compelled to divulge via warrant. Assange is nothing more than a facilitator for thieves and as such especially when it comes to corporations or private business he has stolen proprietary information and that is a crime. Love you liberals, you cry about the rule of law until it favors someone you don't like .
Mr. Assange is a hero to me and many others. I see no evidence of pathology. But even if ego is the basis, it is irrelevant. The information is the only currency I care about. Its value and impact will persist, or not, regardless of who released it. Attacking Assange is a smokescreen.
He's a thief pure and simple and he does it because he wants to show he's relevant. He couldn't care less about you or the principle of transparency, etc. He just wants to prove he can do it. He wants the world to know he's there, that he matters...that he is a smart guy.
Assange hasn't sold anything and if the government was so afraid of anyone getting harmed, why didn't they take the opportunity they were given to audit the leaks? Anyone who is against Assange, or Wiki, in my opinion, is wrong and ought to pay the piper. This is the litmus test and may be the only opportunity we have to get our country back on track. If it wasn't for these leaks, our country would continue on this path to hell and back.
Ah but he has. Once he puts the stolen information out on the servers it can be construed as a sale because his intent was to steal the information and to profit from it by making it public thereby increasing his prestige and if it can be determined that he profits from it in any matter, he's cold busted at least civilly. He can also be found guilty of perpetrating a criminal conspiracy whereby he induced someone to illegally hack into a private network and obtain information that was not their property. If he becomes the recipient of that information, then he's also guilty of knowingly receiving stolen good that he knows to be stolen. Also, Mendez, this country is not going to hell...it's in a lot better shape than most countries like , oh I don't know, every frickin' European nation..except Denmark.
"I have no evidence whether Countrywide's lending practices were so lax (and some would say corrupt) that loans were made to people who either lied about their finances or had mortgage brokers lie about that information...." This is what Charlie does not get (and Rick Santelli). The vast majority of Americans on these 'ninja, nodoc and liar loan documents' were lied to, scammed and robbed by corporate America. It all started in Orange County CA by the likes of Ameriquest, FAMCO, New Century, etc and it eventually spread to countrywide and Bank of America. It was the largest robbery of the upper class to the lower class, it was true rape and the victims were generally people in desperate times (old, broke, widowed, etc). Best part is, no one is in jail! Crime is legal in the US, you just need to know how to do it. Hide in some company, pay politicians to get more deregulation, lie to the client and then falsify their documents to get it approved.
WikiLeaks founder Julian Assange should go down as a "Robin Hood" like character in history. It is refreshing to see business and governments squirm in the face of transparency. As long as no trade secrets are not disclosed I would think they would have a hard time claiming that this is stolen property.
It's not up to the public to decide what a company considers a trade secret. If Assange has a hard drive from a bank, that's bank property, whatever might be on it - and the contents are also bank property. If I broke into your house and stole your laptop and published on-line everything on it, I would not be congratulated as a warrior of transparency. I'd be arrested for all sorts of things.
I'm beginning to wonder what the over/under odds are for Assange's life span. I see a guy who is going to have an "accident' in the near future.
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