Suing the suits: Right move, too late?

From the NYT:

The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.



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.

This is right move, not at the right time. Something like this should have happened years ago.



Much the same can be said about the choice of Alan Krueger. Summers and Ghouls-bee are gone. Geithner, alas, is still there.



Is it possible -- is it just possible that the pressure lefties have placed on Obama has started to show some results?



When the Tea Party leaders assail Obama and the Federal Housing Finance Agency for this lawsuit, they will reveal themselves to be the puppets of Wall Street -- even though many baggers joined the movement because they were outraged by the big bank bailouts. Maybe this situation will educate the otherwise ineducable baggers about who is really in charge of their movement.

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.

The only problem with these lawsuits are the numbers. $10 billion is not going to make 'em scream.



If the banks are ever truly threatened, you'll be hearing a scream like you've never heard before. And suddenly the Republicans will be forced to support Wall Street in very public ways, under the rubric of fighting "socialism." That will demonstrate only the disingenuous nature of their rhetoric.



Incidentally, the guy in charge of the FHFA is named Edward DeMarco. Here's some background on him. We are going to be hearing his name more often, methinks. The politics of the situation are intriguing: He was a Bush appointee who has been at loggerheads with Obama and Geithner So when the baggers slam Obama for the upcoming lawsuits -- and believe me, they will -- they will be slamming someone whom Obama doesn't consider a team player.



So the FHFA lawsuits may be happening in spite of Obama -- who, for his part, is hoping to get some lolly from the Wall Streeters for his relection bid. Even though the bankers have made clear that they hate him.



This could get interesting!



SEC reform. These lawsuits would never have had any need to exist if the SEC had not been corrupt to its core. Matt Taibbi has a great column about SEC reform. Basically, the idea is to stop the "revolving door" practices cold, and to make sure that the SEC has an enforcement division.



The revolving door issue is the big one. As things stand, the SEC can refer cases to the Justice Department. Referrals have gone way, way, WAY done over the past decade or so. And that's yer problem, right there.



Back to Obama. The big question is: Is it too late? For most of my readers -- and, to a large degree, for myself -- the answer will be yes. The pooch has been well and truly screwed. On the other hand, there is this election coming up.



Wavering Democratic voters will face a tough choice: Do they support (with clothespin attached to nose) a bad Dem president who has started to do some of the right things, but only when re-election came into view? Or do they sit this one out and allow someone like the abominable Perry to win?



Laff of the day: On YouTube, the following comment was made about my film "Libertarian Lies":

"Obama put Larry Summers and Tim Geithner in charge of the economy. If that makes him socialist, I'm the King of Peru."



Well then smart guy, by the very implications of your own stupid fucking statement, you must be the King of Peru. Dumbass.

Has anyone seen my pet bear? He used to be around here somewhere. His name is Paddington.