AllState sues big banks-lots of them-over fraudulent mortgages.

[dixiegrrrrl]

Allstate Corp. is suing Goldman Sachs Group Inc. claiming the broker fraudulently sold it more than $123 million in mortgage-backed securities in 2006 and 2007, before the housing market collapse sent the investments' value plunging.

The insurer claims in a lawsuit filed in New York that the documents Goldman provided at the time "contained untrue statements and omitted material facts" about the mortgages underlying the investments.

"Goldman knew these types of securities were, to use Goldman's own words, ... `junk,' `dogs,' `crap' and `lemons,'" according to the complaint.
And
Defendants in more recent lawsuits filed by Allstate include Morgan Stanley and JPMorgan Chase & Co., Bank of America's Merrill Lynch & Co. unit, and units of Citigroup Inc., Credit Suisse Group AG and Deutsche Bank AG.

http://finance.yahoo.com/news/Allstate-sues-Goldman-Sachs-apf-2033960331.html?x=0&sec=topStories&pos=7&asset=&ccode=

So, all these ponzi mortgage sales to the trusts are coming back to bite the banks big time.
Seems like EVERYBODY is suing.

Karma train, choo choo!

[DCKit]

1. OK, but who gave that mortgage backed shit AAA ratings?

RICO the bunch of them.

[golfguru]

4. That AAA rating for junk was justified

because before the housing bubble popped, there was no problems with the MBS whatsoever. Investors were getting paid dividends regularly. With the ever inflating house prices there was little risk. Only a crystal ball would have known housing was gonna go bust in future.

OTOH obligations of US Gov't are extremely well documented. It is all on law books. Uncle Sam is broke! Their rating should be CCC.

[DCKit]

5. You should do stand-up. nt

[golfguru]

6. Show me why I am wrong?

[DCKit]

9. You just are. And I'm not going to waste my time explaining it to you.

Obviously, you haven't bothered to pay attention the past four years, and I don't see where it's my job to tutor you in remedial history.

[golfguru]

10. OK, no problem if you can't counter...

have a good day!

[DCKit]

11. The ongoing investigations and inevitable prosecutions will prove you wrong.

None of the players were innocent of wrongdoing.

It's not my fault you haven't been reading what's been written or posted on the internets. DU is a great source for researching all the things you seem to have skipped over.

[Yavin4]

13. Okay, Here's Where You Are Wrong

Senate investigators concluded that had Moody's and S&P heeded their own warnings, they might have issued more conservative ratings for the securities linked to shoddy mortgages.

``The problem, however, was that neither company had a financial incentive to assign tougher credit ratings to the very securities that for a short while increased their revenues, boosted their stock prices, and expanded their executive compensation,'' the report said.

http://www.huffingtonpost.com/2011/04/13/credit-rating-agencies-triggered-crisis-report_n_848944.html

[Po_d Mainiac]

16. If Mr. Bean was real

You wood be aspiring to be his belly button lint remover.

[dbackjon]

8. WRONG

Anyone with a brain knew that it was a bubble, and could not sustain itself. Goldman Sachs knew it. S&P knew it.

[Po_d Mainiac]

14. And please note

Squid broker Fab Tourre was really talking about the Porta-Potty's at the corner of Broad and Wall Streets as being shitty, not AAA rated Abacus.
:rofl:

[BR_Parkway]

2. Once they realized the government wasn't going to do anything about it

they had to finally take matters into their own hands. Such a shame really, that the only time law and order is really important anymore is to protect some rich guy's assets or if you want to smoke a little weed.

[bemildred]

3. Are they selling tickets?

:popcorn::popcorn:

[golfguru]

7. If the housing bubble was still going on and growing

those MBS (mortgage backed securities) would still be rated AAA
because no one was losing money. If the home owner defaulted on
a mortgage, the bank could easily unload the house for something
higher than the money owed in mortgage. And dividends never stopped.

[fasttense]

12. What can't go on forever wont.

The bubble could not go on forever. No bubble can, because there will always be something coming along that scares the marks or buyers and then they start to sell off. A bubble is not based on real value so any little thing can scare the market and pop the balloon.

And many, many rational economist warned that the bubble would explode. Goldman Sachs knew it was going to collapse otherwise they wouldn't have shorted the MBSs they sold to their customers.

[Po_d Mainiac]

15. Dude, you are real fucking wrong here

As early as 06 the FBI was asking for more agents....Shrub yanked the 'white collar' force to work 'Homeland Insecurity' detail. Fact..

Even CNBS/c ran this:
http://today.msnbc.msn.com/id/29163182/ns/business-cnbc_tv/page/2/

In short, securities that were easy AAA got rated such. Garbage got rated garbage. But what to do about everything in between? If you ain't figgered it out by now, what happened is the best of what was left, became AAA.....As the tranches moved down the flag pole...the best of what was left became AAA..etc.

A AAA security is supposed to have almost no chance of defaulting. It was common knowledge that the underwriters were doing liar loans. (the reason the FBI wanted their people back to force level)...The banksters knew, and explains the reason they were shredding original documents, and used Doc X. There is that little clause in most securities which provides for a put back if the security is comprised of fraudulently written notes, which the original papers would have illustrated.

RE your impulse to buy GM...Buy a lot. Also recommend C and BAC...double down on HPC, WCOM, and ENE

PPS.Do some fucking homework!..Dividends never stopped because proceeds from the sale of foreclosures were plowed into the friggin pool. 1 sale could mask 20-30 deliquencies until the ponzi soiled the sheets