Reply #44: Geithner! In my office, NOW!

[ozymandius]

I seem to recall that the FRBNY accepted this truckload of manure as AAA-rated bonds in exchange for the federal funding backstop.

From the article:

The New York Fed, which acquired mortgage debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc., joined a bondholder group including Pacific Investment Management Co. that aims to force Bank of America Corp. to buy back some bad home loans packaged into $47 billion of securities, people familiar with the matter said this week.

Concern that Bank of America may be forced to buy back soured mortgages helped send its stock down almost 5 percent in the last two days, wiping out $5.92 billion of its market value. The decline runs counter to the Fed’s goal of strengthening the banking system after the worst crisis since the Great Depression.

So they cannot force the buyback without admitting they knew these securities were shit and that our current Treasury Secretary abdicated his fiduciary duty. This would leave Geithner naked on top of a flagpole, subject to the accusation that he didn't do his fucking job!