Friday, March 20, 2009

"Like a Gang of Clowns in a Pie Shop...": AIG Sues Countrywide, Countrywide Sues AIG. And Senator Dodd Stops by

The pie shop line was a winner of the prestigious Climateer "Line of the Day" in a September, '07 post, "Climateer "Line of the Day" and Day Trading Hot Chinese Alt-Energy (What could possibly go wrong?)":

Speaking of the WSJ's Blog Empire (see below), Tim Annett posting at MarketBeat was yesterday's winner with a walk-off home run*:

Like a gang of clowns in a pie shop, Wall Street brokerages had a merry old time slapping one another with various downgrades, earnings-estimate parings and price-target reductions in the lead-up to their recent earnings announcements....
Today's story is via The Market Ticker:

This promises to get amusing; two headlines:

"Countrywide sues AIG unit over its failure to cover loan losses"


"AIG Sues Countrywide for Misrepresenting Mortgages"

You can't make stuff like this up; here's a few choice quotes from both stories (you match 'em!)

Eggert added, "Here Countrywide displays a huge amount of chutzpah because it's suing because its loans went bad, and it claims United Guaranty should have done better underwriting, when it's the failing of underwriting by loan originators that got us into this stuff."

United Guaranty said in the complaint that it had reviewed loan files that showed that most mortgages covered by 11 policies for asset-backed securities were either underwritten in violation of Countrywide’s own guidelines or contained defects, such as missing documents, misrepresented credit scores or false social security numbers.

You just have to chuckle at the "ready fire AIM!" chutzpa here.

Never mind the obvious appearance of bribery found in this nugget:

Countrywide was also a focus of attention Thursday in Washington, where Rep. Darrell Issa (R-Vista) released a 63-page report detailing the company's practice of giving discounted mortgages to influential people, particularly key lawmakers, staffers and other government officials....MORE

Paging Senator Dodd?
From this morning's Hartford Courant:

Congressional Report: Countrywide Bent Loan Rules For Dodd

An executive at mortgage giant Countrywide Financial overrode the company's loan-writing policies to give a discount to Sen. Christopher Dodd, the powerful chairman of the Senate banking committee, according to an internal Countrywide document turned over to congressional investigators and obtained by The Courant.

But paperwork, e-mails and other loan documents reviewed as part of the congressional probe include no direct evidence that Dodd was aware at the time that he was getting a discount, according to a source familiar with the investigation.

And a Dodd spokesman Thursday repeated the senator's contention that there was nothing in the negotiation or loan process that was unusual or out of the ordinary....MORE
It is possible. Here's the Chairman of the Senate Banking, Housing and Urban Affairs Committee last year:

"I don't know what the rates are today"
But of course Senator. Why should you, of all people, be expected to know what current mortgage rates are?
Committee on
Urban Affairs
See also, yesterday's "Senator Chris Dodd: Incompetent Criminal or Criminally Incompetent?"