Promontory Financial Group
From Abigail Field at Naked Capitalism:
Wells Fargo’s Promontory process apparently found no wrong doing in 9,996 cases out of 10,000 examined. The other four were sent to Wells Fargo for further review but came back as no problem. At least, 0 problems out of 10,000 files is what the insider’s supervisors announced to everybody. I don’t know if the supervisors were telling the truth or just trying to message everyone to not find any problems in any files. Either way it tells you the same thing: the reviewers won’t find anything wrong with the files…
[S]ince the OCC’s willing to let John Stumpf’s Wells Fargo do a thoroughly fraudulent process, surely it’s willing to let the rest of them do it too. I say “Bank-run OCC” quite deliberately. Third, Promontory is engaged to do three reviews; Wells, Bank of America, and PNC. Now, the insider only worked on the Wells Fargo Promontory project, so I can’t be sure the other two set ups are equally rigged. But what are the odds?…
The bankers got and still have troubled asset “relief.” Without that help they’d all be bankrupt today. But homeowners are still denied mortgage principal relief on their their homes, even in bankruptcy. Don’t tell me that the moral hazard of troubled asset relief is smaller or less systemically important than the moral hazard of mortgage principal relief, in bankruptcy or out. There’s absolutely no way to justify that disparate treatment on the merits.
Underwater, toxic mortgages aren’t the only Wall Street created, unsustainable liability affecting our nation. Nationwide local governments are locked into extremely expensive Wall Street products called interest rate swaps. These deals turn our tax dollars into windfall profits for the bailed-out bankers. Taxpayers are trapped in the deals by high early termination fees. Worst of all, the reason these deals are so bad for municipalities is the Fed’s free money response to the banker-caused financial meltdown. That is, our government trying to help the bankers is facilitating the profiteering from municipalities. And yet I’ve heard no one in the Obama administration suggest helping municipalities cope with the bankers’ greed. At least Team Obama talks a good game about helping on mortgages.
Regarding the proposed mortgage settlement:
[I]f Promontory’s rigging the review to ensure Wells Fargo doesn’t pay homeowners a dime in restitution, it’ll be even more thoroughly protective of the bank when theoretically big fines ($1-5 million/each) are at stake.
And the inevitable revolving door:
[T]he law firm most hardwired into the Justice Department under AG Holder, with deep ties to the OCC, is also thoroughly hardwired into Promontory Financial, which is helping Wells Fargo, a Covington client, “comply” with the OCC’s consent decree. And Promontory also employs veterans of our government’s bank regulating and law writing institutions who somehow managed never to work for Covington.
Meanwhile, Warren Buffett, in his annual letter to Berkshire Hathaway shareholders, recommended Wells Fargo as the single best bank to own.
This is consistent with the Wells-affiliated financial advisor who last week, when I asked for his opinion of record low volume and high correlation and problems with price discovery due to HFT and insider trading among hedge funds, told me I worried too much.