US About To Sue Banks For Subprime Bond Losses

[Schneibster]

Freddy and Fanny were put into bankruptcy by subprime bonds, and the FHFA is about to sue BofA, Deutche Bank, Goldman Sachs, and is already involved in a nearly billion-dollar lawsuit against UBS, for the losses. Details of the lawsuits are sketchy, and the banks will not respond since they have not seen the papers (because the lawsuits are not yet filed), but it sounds like several billion dollars a pop. They're up against a time limit, and have to file before the three-year statute of limitations runs out.

The ramifications are going to be really interesting; this could cause another panic/crisis, especially if the government wins; it could tank bank stocks; and the market will not get to weigh in until next week. OTOH, it's unclear whether there is a good basis for the lawsuits, and also unclear how responsible they were.

This should be at minimum a source of comedy to watch, and at maximum the straw that broke the camel's back. Read all about it.