Sunday, February 15, 2009

60 Minutes: World of Trouble

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Heavy emphasis on the economy on 60 Minutes tonight... below is a 13 minute video on World Savings. They said it was the 2nd largest S&L in the country which made me scratch my head because I had not heard of it. Then the light bulb came on as it was (somewhere along the line) renamed Golden West. Ah, that name I know very well. Golden West was bought by Wachovia for $25 Billion in 2006 (talk about buying at the top!)... that transaction so hobbled the bank it had to be bought by (first) Citigroup and (ultimately) Wells Fargo; with taxpayers money backing the deal. If you are interested, on top of the taxpayer backing, Sir Hank Paulson snuck in a tax code change that created a huge windfall for banks buying other banks as part of the rush to fund TARP - details here [Nov 13, 2008: Washington Post - A Quiet Windfall for US Banks]

Of that $25 Billion, World Savings founders scooted away with $2 Billion ... no clawbacks here. Robin Hood in reverse working to perfection yet again.

I just hate when pundits (and politicians) say "how could we know, no one saw it coming"

[If you are not familiar with an option ARM - this was described in detail here --> [Aug 13, 2008: Option ARMs- Who Thought Up these Time Bombs?]]

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Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings that many of the mortgages they were granting were misleading and predatory.


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