States AG's threaten banks with $17 Billion in civil lawsuits

Oh, I can see the banks shaking in the Ivory towers. A threat of $17 Billion in civil lawsuits.

J.P. Morgan paid that in bonuses for their executives in 2010. Though they were kind enough to leave $500 Million to be split up between the 3.9 billion shareholders.

Seems ludicrous to me. How can that be a deterrent to banks?

In the first 3 months of this year, all the major banks combined had 9 trading days of losses. You read that right - in 90 days of trading - B of A, J. P Morgan, Goldman Sachs, Wells Fargo, CitiBank, Morgan Stanley - lost money in 9 of those 90 days. They made close to $5 billion for the 3 months per BANK!!

One bank, out of those 5, paid $16 Billion in bonuses last year - J.P. Morgan.

Divide that $17 Billion between the 5 above mentioned banks, and it works out to be about $2.4 billion per bank. It does not even put a dent in their trading profits!

The states AG'S ( Attorney General's) are threatening those 5 major banks with $17 Billion in civil suits. They'll just dip into those tidy little trading profits and fork it over without a blink of a ( wink wink) eye.

Who are the AG's working for?

A billion sounds like a lot of money, right?

After all, the banks are doing "God's work", according to Lloyd Blankfein.

God's work entails helping Greece lie about their finances before entering into the European Union. Read about that here.

God's work also entails front running their clients in trading stocks.You can read about that here, for Goldman Sachs, Morgan Stanley's front running here.

Ah, AG's threat of a $17 Billion civil suit does not even take into account the illegal robo signing of documents for courts when filing for foreclosures - an illegal act in most states. 60 minutes had a segment about that here.

There is nothing about the activity of selling these worthless bonds to investors, either. Most companies - J P Morgan, Lehman Brothers, Goldman Sachs - were buying puts (Thinking that the bonds they were selling their clients that were "AAA' rated by the rating agencies, would go down in value) as they touted them as "safe" investments.

The "system" is working, though, right?

The AG's threatened lawsuit will be moot, though, if Treasury Timothy Geitner gets his way. He, too, is trying to work out a deal with the banks over this foreclosure mess. At a discount for the banks, of course.

This is another example of how, even though illegal activity is done at the major banks, the banks get a slap on the wrist vs. a major fine.

Lets see - J.P. Morgan paid out over $16 Billion in bonuses last year. Multiply that 5 banks is $80 Billion. 

If the AG's and/or government really want to deter banks from forging, misleading, robo signing documents - how about a fine that really hurts - $200 Billion - that would put a dent into profits and give a wake up call that the government/AG's are actually looking out for the taxpayer.

Personally, I am not holding my breath that we will have a turn around in "The system is anit - us."

A slap on the wrist will be the best that we can expect, and that is a true shame.

Cheers for now.