Ooh, the sheer brazenness of this is almost admirable.
Bank of America is trying to wriggle out of paying the taxpayer $4 billion in fees, which it owes the taxpayer, in exchange for the backstop of $118 billion in Merrill Lynch assets.
On what basis are they doing this? According to Bloomberg, they never actually signed the agreement, and since the backstop was never employed, they don’t want to pay up.
Sorry, Ken, but this is total nonsense. That the backstop was never used means nothing, since it’s only a backstop if it’s possible that it might not be used. If it’s not contingent it’s not a backstop. It’s just a pure gift. It’s like, if you bought health insurance, but never went to the doctor one year and then tried to get your money back. Not going to happen.
And as for the part about now signing the documents? Please. We wonder whether the bank would let its own customers off the hook if some paperwork hadn’t been completed on a loan. NO CHANCE.
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