BF2S Forums Who should I vote for on Tuesday?

JohnG@lt wrote:

ghettoperson wrote:

Is your rent too damn high?

$1200 a month for a one bedroom. Reasonable for the area.

JohnG@lt wrote:

I wouldn't vote for Cuomo even if I was the swing vote and it came down to him and Charles Barron.

His father was a douche, he's a headline seeking douche, and he's firmly in the pocket of the unions. If you want the states finances fixed he's the last candidate on the ballot you should choose.

But hey, keep voting (D) because your parents vote (D). You'll fit in well in New York as an adult.

JohnG@lt wrote:

Social issues are irrelevant. He has no control over shit like that anyway. As far as assault weapons being banned... that's the most retarded and illogical ban that there has ever been. Banning automatic weapons? Fine. Sure. But to ban a weapon based on the shape of the muzzle? To ban a weapon based on who it was designed for? Please. Why ban the M-4 or Ak-47 when there are a thousand superior weapons out there? You approve of the assault weapons ban because you, like every other liberal on the planet, is clueless and terrified of weapons of any sort.

Fact is, Cuomo is a fiscal retard and will simply borrow money to pay for today and kick the debt down the road for others to pay. Since you wish to stay in this state, you're the one that's going to end up paying off that debt, except it's going to cost twice as much as the initial price when it finally comes due.

The bank bailouts of the last two years have been "about as popular as a root canal," as President Obama noted in his State of the Union address. This means somebody has to take the blame, and the politicians have nominated the bankers—which certainly beats self-reflection.

So it was probably inevitable that New York Attorney General Andrew Cuomo would file civil fraud charges against Bank of America, its former CEO Ken Lewis, and its former CFO Joe Price, as he did this week. Everyone assumes Mr. Cuomo is running for governor this year, and BofA is conveniently based in Charlotte, not Wall Street.

You will remember BofA as the bank that won high-fives from the political class for stepping into the breach to buy a failing Countrywide Financial and, later, a teetering Merrill Lynch amid the financial panic of 2008. But now that the crisis has passed and the voters are still mad, the bank's shareholders and employees are more useful as political javelin-catchers.

Mr. Cuomo accuses the bank and two men of "duping shareholders and the federal government in order to complete a merger with Merrill Lynch." In charging the executives, Mr. Cuomo has dusted off the 1921 Martin Act, the favorite tool of his predecessor Eliot Spitzer.

This allows a prosecutor to bring a case without proving any intent to defraud, which in most places means there was no crime. The Martin Act is a prosecutorial bludgeon that forces most defendants to settle out of court rather than risk being convicted merely for having been wrong on some facts.

The AG's charges are certainly creative in that they get the bank executives coming and going: "Bank of America's management intentionally failed to disclose massive losses at Merrill so that shareholders would vote to approve the merger. Once the deal was approved, Bank of America's management manipulated the federal government into saving the deal with billions in taxpayer funds by falsely claiming that they would back out of the deal without bailout funds."

Essentially, Mr. Cuomo says that senior BofA executives knew Merrill would lose $16 billion in the fourth quarter and failed to tell shareholders before a vote on December 5, 2008. Our sources say BofA estimated the after-tax losses at $9 billion before the vote, which was within the range of what Merrill had been losing in recent quarters. Either one or the other of these claims is right, and we'd like to see Mr. Cuomo's evidence.

As December wore on, the loss estimates for Merrill continued to rise, and Merrill's troubles were exceeding those suffered by competitors. This meant that BofA had a potential claim under its merger deal to terminate the agreement. When Mr. Lewis told Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke that he was considering invoking this clause and scotching the deal, they insisted he buy the faltering trading house and later announced an additional taxpayer investment in BofA to allow the bank to digest Merrill. Mr. Lewis swallowed hard and went ahead with the merger.

Mr. Cuomo now says this was all a bluff by Mr. Lewis in order to trick the regulators into providing more TARP money. Never mind that Mr. Lewis had a contractual right to pull out of the deal if he felt material facts had changed. And never mind that TARP was a gilded straitjacket that every bank, including BofA, wanted to flee as quickly as possible.

Mr. Cuomo's logic boils down to this: Mr. Lewis is guilty for not telling his shareholders about rising losses at Merrill, but he's also guilty for trying to protect his shareholders from the rising losses at Merrill.

The government can't prove any of this hurt taxpayers, because BofA has since repaid its TARP money with interest. Mr. Cuomo will also have a hard time demonstrating harm to BofA shareholders because Merrill's investment bank has since churned out profits for the bank.

The only possible claim would seem to be that BofA could have fought for a lower price in buying Merrill, but then trying to do that is part of the reason the bank is getting sued. In any case, Messrs. Paulson and Bernanke were threatening to fire Mr. Lewis if he didn't buy Merrill at the price shareholders had approved. On the public evidence so far, Mr. Cuomo should be thanking Mr. Lewis, not suing him.

If Mr. Cuomo truly believes that BofA shareholders and executives deserve to pay the political cost of the financial crisis, perhaps a refresher is in order on the roots of that crisis. Along those lines, the Web site of the Department of Housing and Urban Development has an interesting item in its Archives section. Entitled, "Highlights of HUD Accomplishments 1997-1999," the document chronicles the "accomplishments under the leadership of Secretary Andrew Cuomo, who took office in January 1997."

HUD's Web visitors learn that in 1999 "Secretary Cuomo established new Affordable Housing Goals requiring Fannie Mae and Freddie Mac—two government sponsored enterprises involved in housing finance—to buy $2.4 trillion in mortgages in the next 10 years. This will mean new affordable housing for about 28.1 million low- and moderate-income families. The historic action raised the required percentage of mortgage loans for low- and moderate-income families that the companies must buy from the current 42 percent of their total purchases to a new high of 50 percent - a 19 percent increase—in the year 2001."

Fannie and Freddie's purchases of subprime loans skyrocketed. The problem wasn't merely that the Cuomo HUD was raising the volume of loans for which taxpayers would be on the hook. It was also encouraging a dangerous decline in underwriting standards at these government sponsored enterprises (GSEs). Says former Fannie Mae chief credit officer Edward Pinto, "HUD commissioned much research aimed at forcing the adoption of more flexible lending standards by the GSEs."

In 1999, the Urban Institute published a HUD-commissioned study of Fannie and Freddie's credit guidelines. Among its findings: "Almost all the informants said their opinion of the GSEs has changed for the better since both Fannie Mae and Freddie Mac made substantive alterations to their guidelines and developed new affordable loan products with more flexible underwriting guidelines."

Mr. Cuomo's drive to pump up the volume on taxpayer-backed mortgages didn't stop at Fannie and Freddie. In 2008, Wayne Barrett wrote in the leftist Village Voice about the changes Mr. Cuomo wrought at the Federal Housing Administration, encouraging bigger loans with smaller down payments.

Even if one believes the allegations hurled by the New York Attorney General, Mr. Cuomo has done far more harm to taxpayers and investors than the defendants, by any reasonable measure. A better use of time would be to investigate his own involvement in the mortgage meltdown in the hope that he will do less damage while taxpayers continue to pay his salary.