Bankers' Comeuppance: Bank of America Faces Possible Retreat From Some U.S. Regions, And Will Obama Pick the 99% Over Jamie Dimon?

According to the Wall Street Journal, Bank of America told U.S. regulators "it is willing to retreat from some parts of the country," if its financial woes continue to intensify. 

According to WSJ:

While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems.

Among the 7,400 U.S. banks and savings institutions, Bank of America, J.P. Morgan Chase & Co. and Wells Fargo & Co. are the only coast-to-coast giants. For the past 20 years, Bank of America and predecessor Nations Bank Corp. relentlessly acquired other financial institutions in a form of manifest destiny that shook the U.S. banking industry. The 1998 takeover of BankAmerica Corp., of San Francisco, and 2004 purchase of FleetBoston Financial Corp., Boston, left the combined bank with sizable muscle in nearly every large metropolitan area in the country.

Over the course of its long expansion, Bank of America, currently the country's second-largest bank by assets, pushed its way into every nook and cranny of the financial system. But in doing so the bank left itself more exposed than any major bank to the severe economic downturn of 2008-2009, the weak recovery since and a litany of mortgage-related lawsuits.


Its share price has tumbled 55% in the past year, the worst performance of any major U.S. bank.

Meanwhile, Francine McKenna writes on that "Jamie Dimon Will Have His Comeuppance in 2012. "She says that the race for Treasury Secretary TIm Geithner's replacement may not come down to Jon Corzine and Jamie Dimon, who have been "touted as equally like candidates," because of their sketchy behavior and what she thinks will be Obama's attempt to make nice with the 99%. 

Here's why:

It’s not a stretch to imagine that Jon Corzine’s days as a wealthy free man may be numbered. The longer the mystery of the missing MF Global $1.2 billion goes on, the more we see him bob and weave in front of angry legislators, the more arrogant and entitled his excuses for knowing nothing sound, the more likely it is prosecutors will make him the poster boy for criminal prosecutions of Wall Street banksters.


So my first prediction is an easy one: This is the beginning of the end for Corzine. It’s gloves-off time. Look for an indictment by the Department of Justice’s Preet Bharara before the end of 2012 for criminal misappropriation of customer funds at MF Global.

My next prediction isn’t so obvious.

I think the Obama administration will pull Jamie Dimon down along with Jon Corzine.

They’ll do this to regain momentum with working-class voters—the 99%. Winning the November election, less than a year away, will require a significant show of prosecutorial force against banks and senior executives yet to be held accountable for the impact of the financial crisis on the middle class.

Jamie Dimon will have the misfortune, I believe, of catching a significant amount of fallout from the MF Global mess. As MF Global’s primary banker, JPMorgan Chase has been consistently accused in the media and by the attorney representing a customer coalition of taking advantage of the firm’s vulnerable financial state.Bloomberg News reported that the MF Global trustee said “certain” actions of JP Morgan Chase “are likely to be the subject of investigation.”

Maybe 2012 will bring some accountability...

AlterNet / By Kristen Gwynne

Posted at January 13, 2012, 8:28am

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