The reason why banks do this is to manipulate numbers and show they are profitable. They cut their biggest expense which is human resources. It fixes the book short term but hurts the company in the long run since they will not be able to grow. This is not a true profit but just a smoke and mirrors trick.

Now that our same government has decided to crack down on their fraudulent practices, one of the major banks announce they will cut more jobs.  This is after they suckered in Warren Buffett into a $5 billion private investment.  Seriously, if the bank is simply insolvent, the FDIC needs to step in and liquidate this bank.  The odd part is the bank executives are all still getting paid million of dollar compensations even though the company is laying off troops of employees.  Yes, people who are invested in BofA deserve a haircut and should be forced to take losses.

RTTNews:

Financial giant Bank of America Corp. (BAC: News ), which is struggling with souring mortgage losses, is in talks to cut roughly 40,000 positions over a period of years as part of its initiatives for cost cutting, known as Project New BAC, reports said Friday, citing people familiar with the plans.

Job cuts may total about 10 percent of the bank’s total employee count of 288,000 in the next two to three years. Chief Executive Brian Moynihan reportedly said that the bank will cut assets as well, to make it easier to manage. He is expected to discuss the details of restructuring on Monday at a conference held by Barclays Capital in New York or during the bank’s next earnings conference call in October.

Moynihan recently had said that its time to simplify and streamline the organization, and make sure business processes are relevant with a smaller, more focused company.

It was reported earlier that the officials had set a preliminary goal of cutting expenses by 20 percent in consumer banking.

On September 6, Bank of America announced reshuffling and restructuring its operations management, and appointed David Darnell and Tom Montag to the newly-created positions of co-chief operating officers. The Bank said the first phase of change is nearing conclusion and expects significant expense reductions as a result. The reorganization is expected to align the bank’s operating units with its three core customer groups: individuals, companies, and institutional investors.

The bank’s Project New BAC was started in April 2011 with the primary objective of alignment of leaders with customer groups and simplifying the organization.

BAC closed Thursday’s regular trading session at $7.20, down $0.28 or 3.74 percent. In pre-market activity, shares are currently trading at $7.27, up $0.07 or 0.97 percent.

Now that our same government has decided to crack down on their fraudulent practices, one of the major banks announce they will cut more jobs.  This is after they suckered in Warren Buffett into a $5 billion private investment.  Seriously, if the bank is simply insolvent, the FDIC needs to step in and liquidate this bank.  The odd part is the bank executives are all still getting paid million of dollar compensations even though the company is laying off troops of employees.

MarketWatch:
If it is true, it would be another sign of desperation. The Charlotte Observer reports that Bank of America (NYSE: BAC) could lay-off 30,000 people over several years.

The bank has come under new pressure as the government announced a suit against 17 financial firms which it claims misrepresented the risk of mortgage-back securities they sold to Fannie Mae and Freddie Mac. The total losses from these was $200 billion. The possibility that the government can recoup of all that is unknown.

Bank of America (NYSE: BAC) has been rumored to need over $100 billion in new capital. There have also been rumors that the firm could be taken over by JP Morgan (NYSE: JPM) or another large American bank. B of A has attacked these as false, but its share price has done little to allay fears. The stock fell to $6.01 three weeks ago. Warren Buffett invested $5 billion in the bank which cause share to rally. Subsequent bad news pushed shares, which had recovered to $8.39, back to $7.25. The stock’s 52-week high is $15.31.

Bank of America can continue to deny it will need to raise large sums of money, an act which would nearly wipe out common shareholders. The firm’s stock says many investors have bet otherwise

Now, a few years after the fact after our corrupt politicians bailed out their lobby heavy “friends”, the US regulator has decided to sue the major banks.  I say get it done.  We need to get our money back, and if these companies fail in the process, so be it.  They don’t deserve to stay in business if they can’t pay their bills.  These are the same bailed out banks that are foreclosing on Americans everyday and use deceptive practices in loan modifications and predatory lending.

LA Times:

The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

The suits stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims.

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

In July, the agency filed suit against UBS, another major mortgage securitizer, seeking to recover at least $900 million, and the individuals with knowledge of the case said the new litigation would be similar in scope.

Private holders of mortgage securities are already trying to force the big banks to buy back tens of billions in soured mortgage-backed bonds, but this federal effort is a new chapter in a huge legal fight that has alarmed investors in bank shares. In this case, rather than demanding that the banks buy back the original loans, the finance agency is seeking reimbursement for losses on the securities held by Fannie and Freddie.

The impending litigation underscores how almost exactly three years after the collapse of Lehman Brothers and the beginning of a financial crisis caused in large part by subprime lending, the legal fallout is mounting.

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

And last month, the insurance giant American International Group filed a $10 billion suit against Bank of America, accusing the bank and its Countrywide Financial and Merrill Lynch units of misrepresenting the quality of mortgages that backed the securities A.I.G. bought.

Bank of America, Goldman Sachs and JPMorgan all declined to comment. Frank Kelly, a spokesman for Deutsche Bank, said, “We can’t comment on a suit that we haven’t seen and hasn’t been filed yet.”

But privately, financial service industry executives argue that the losses on the mortgage-backed securities were caused by a broader downturn in the economy and the housing market, not by how the mortgages were originated or packaged into securities. In addition, they contend that investors like A.I.G. as well as Fannie and Freddie were sophisticated and knew the securities were not without risk.

Investors fear that if banks are forced to pay out billions of dollars for mortgages that later defaulted, it could sap earnings for years and contribute to further losses across the financial services industry, which has only recently regained its footing.

Bank officials also counter that further legal attacks on them will only delay the recovery in the housing market, which remains moribund, hurting the broader economy. Other experts warned that a series of adverse settlements costing the banks billions raises other risks, even if suits have legal merit.

The housing finance agency was created in 2008 and assigned to oversee the hemorrhaging government-backed mortgage companies, a process known as conservatorship.

I remember when Bill Maher and Jon Stewart used to bash Bush. During the first year of Obama’s term, they use to say give Obama time (like most Obamabots), but now they know he is just as incompetent as Bush or maybe even worse. I think he was recently called Jimmy Carter 2.0.  Both comedians now know their presidential pick is a failure and now acknowledge it is OK to make fun of him like most of our corrupt politicians (see video below).

My biggest disappointment in his administration is his criticism on Bush and his abusive spending that got us into this bad recession. Yet, President Obama has taken it upon himself to be as fiscally irresponsible and has made it a goal to wastefully outspend his predecessor. The new 3 stooges Obama, Geithner, and Bernanke are no different than the original stooges Bush, Paulson and Bernanke.

Even though transparency has been a continued theme preached by President Obama and his administration, we continue to see the actions from deliberate planning out of public sight. I am specifically talking about the numerous FRAUD bailouts that reward companies for failing, the outlandish budgets that continue to increase the federal deficit which further harms our economy, and manipulated stress tests that have negotiated results by the banks to show them in a better light. Simply put, President Obama is just the democrat version of President Bush.

Did you fall in love with Obama? Why??

Huffington Post

I truly believe that I speak for so many young progressives that would be proponents for peace, clean food and water, and a government that actually helps and cares for its citizens.

After 8 years of GWB and the lies about WMDs, 9-11, Monsanto, Iraq…etc…anyone coming from the other party looked like a better choice. I was somehow still under the illusion that the Democratic Party would work for the people and not corporate/banking/defense industry interests.

I cried when Obama won. I really thought it was a new dawn for the US and the world as a whole. I was so ashamed of the Bush administration… all the violence and greed just made me ashamed to be from the US. Somehow though I still thought that there was a difference between the two parties.

I have to thank Mr. Obama for waking me up to this truth. When he showed support for Monsanto and big agribusiness, the continued (and escalated) warmongering, and even the continued selling-out of the American taxpayer to the Federal Reserve, the lightbulb went off in my head — they are all simply employees.

On the other hand, Dr. Ron Paul seems to be the only candidate that is talking about the big pink elephant in the room. The money wasted on war, the fact that our nation has been sold to international banks, and that the federal government is becoming a monster overtaking state autonomy.

I never would have thought that the day would come where I would actually consider voting for someone else than a democrat. I want the world to be clean and healthy paradise planet for the next generations and for those that are living here now. I want the freedom to be able to buy clean food and drink unfluoridated water. I feel that its not asking too much, but the current administration continues to take away these rights.

Ron Paul seems to be the only option, and the furthered bashing of him by the mainstream media shows that they see him as a threat. I seriously hope that his time will come in 2012.

Peace and Prosperity to the US and EVERY person on the planet! Here is to sanity in 2012.

Basically people lost homes that they may have been able to stay in.  I reposted a NY Times article and highlighted in red the important points below.

Arizona Sues BofA for Alleged Mortgage Fraud: MyFoxPHOENIX.com

NY Times:

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

But foreclosure problems mounted in Nevada, where Countrywide originated 262,622 loans, and complaints about the bank’s loan servicing practices began flooding into Ms. Masto’s office shortly after the settlement was struck. She found that Bank of America had “materially and almost immediately violated” the terms of the settlement, according to the complaint.

Ms. Masto declined to comment beyond the court filing.

Jumana Bauwens, a spokeswoman for Bank of America, said the bank was reviewing Ms. Masto’s complaint. “We disagree that there has been any material breach of the consent decree and will continue to vigorously defend this action,” she said.

Ms. Masto’s request to terminate the 2008 deal could raise further questions about the extent of its liabilities arising from Countrywide’s lending practices and from the bank’s own loan servicing activities in the foreclosure crisis. The move by the Nevada attorney general could also imperil the already shaky negotiations over improper foreclosure practices being conducted by state attorneys general and the four largest banks, including Bank of America.

Those talks, which also involve federal officials, have stalled over the summer with disagreements over whether the deal would allow state regulators to bring future lawsuits against the institutions for questionable practices. Attorneys general who do not want to give up the right to file additional suits against the banks — including Ms. Masto, Eric Schneiderman of New York and Beau Biden of Delaware — have declined to endorse a proposed settlement.

The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.

For example, the complaint says the bank advised credit reporting agencies that consumers were in default when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.

Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.

One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations were reprimanded, this employee said.

The Nevada filing also maintains that Countrywide, which Bank of America acquired in 2008, did not deliver necessary loan documentation when it put together mortgage securities and sold them to investors during the boom. Under the typical pooling and servicing agreements struck between Countrywide and investors who bought the securities, the bank was required to endorse the mortgage note and deliver it to the trustee overseeing the pool. Countrywide failed to do so, the complaint notes.

These paperwork failures should have barred the bank from foreclosing on borrowers, the Nevada complaint says, but it went ahead nonetheless. This aspect of Ms. Masto’s complaint echoes a lawsuit filed in early August by Mr. Schneiderman, the New York attorney general, to block a settlement between Bank of New York and Bank of America covering 530 Countrywide mortgage pools. In that case, Mr. Schneiderman contends that Countrywide did not deposit loans into the mortgage pools as required and that the bank had no right to bring foreclosure actions against these borrowers.

Ms. Masto’s complaint asks that the court impose civil penalties on Bank of America and order it to cover the costs of caring for foreclosed properties borne by municipalities.

Will the markets go up or down on Monday? Nobody knows and all we can do is wait and see, right? Yes, but you can also try to look at the data to figure out which is the likely scenario to play out. What I personally like to look at is the historical data which can be easily found for free on stock charts. The site even puts in the technicals so you don’t have to do it yourself or learn how to. Instead, now you can look at the charts and make your decision accordingly.

I posted the charts for 8/19/2011 below for the 3 major indexes. Hope it helps you. Cheers!

NEW YORK (MarketWatch) —

U.S. stock indexes on Friday stretched losses into a fourth week, as apprehensive investors remained on alert for any sign of trouble or resolution from the European Union and its banks.

“Given we have a high level of anxiety and we’re coming into a weekend, people would rather be flat than long,” said Randy Frederick, director of trading and derivatives at Charles Schwab Center for Financial Research.

“The only thing that would make it cascade below levels we put in last week was if we found the EU really turning into a banking crisis,” said Michael Gibbs, a managing director and director of equity strategy at Morgan Keegan.

The Dow Jones Industrial Average DJIA -1.57% and the Standard & Poor’s 500 Index SPX -1.50% both closed out the week at levels above their closing lows of the prior week, when a volatile market had the Dow making triple-digit moves each day.

After climbing as much as 120 points during Friday’s session, the Dow industrials lost 172.93 points, or 1.6%, to end at 10,817.65, down 4% from the week-ago close.

Hewlett-Packard Co. HPQ +0.08% weighed most heavily among the blue chips, off 20% a day after the personal-computer maker reduced its outlook and said it might spin off its PC unit. Read what analysts are saying about Hewlett-Packard.

The Standard & Poor’s 500 Index fell 17.12 points, or 1.5%, to 1,123.53, down 4.7% for the week but above the prior week’s closing low of 1,119.46, hit on Aug. 8.

The market is “following a normal path of figuring out if the lows of last week are indeed the bottom for this correction, which is EU driven, and EU focused,” said Gibbs, a managing director and director of equity strategy at Morgan Keegan.

Should the index close below that level, “it stacks the odds the lows are not in,” said Gibbs. “You can’t draw a line in the sand, you have to eyeball that now expecting the market is going to bounce around it or even under.”

The Nasdaq Composite Index COMP -1.62% fell 38.59 points, or 1.6%, to 2,341.84, off 6.6% from the week-ago close.

For every stock rising three fell on the New York Stock Exchange, where 1.5 billion shares traded. Composite volume neared 5.4 billion shares.

The market trend is pointing down, but I expect it to bounce up Monday unless we have some unexpected bad news. I will post some charts later to show you why I think the technicals point down.