The mortgage settlement being worked on between nearly all state attorney generals and the five largest mortgage services is coming to the close. As pointed out on Naked Capitalism here, here, and here this settlement is looking like a slap on the wrist for the servicers with an extra helping of moral hazard. The state is absolving them of further liability and prosecution. This stinks of more state shielding of [bankers, bond holders, unions] with large bailouts, little consumer relief and no criminal investigations.
How many prosecutions have there been during this entire crisis? Subpoenas?
Most interesting is the timing of the settlement - before Christmas. The best way to give bad news is to do it before a holiday when it will get forgotten. That is Public Relations 101 - give the bad news when nobody will notice it.
I expect to see the settlement next Wednesday or Thursday of next week.
Further Reading:
Calculated Risk
Mish's Global Economic Trends Analysis
