Behind Today's +2% Rally in the Financial Sector: A 27 page Fraud-Closure-Gate Bailout by 50 AG's to the banks

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The financial sector is the strongest sector in the stock market today. Part of this +2% strength in the financial sector today can be viewed as a relief rally, attributable to the latest effort to let the banks off the hook again.

Karl Denninger, Barry Ritholtz and Yves Smith, and several other market commentators have had a chance to parse the latest “Settelment Terms” that 50 Attorney Generals are making with the banks. The Settlement Terms can be viewed here: http://cdn.americanbanker.com/media/pdfs/27_page_settlement2.pdf

Karl Denniger called the presentation “27 pages of Fluff” http://market-ticker.org/akcs-www?post=181755 Karl is pretty pissed off too: “These Attorneys General are not here to help homeowners.  They're blowing the servicers under the table and lying to the citizens in their states.  Virtually all of the “shall nots” in this document are already against the law and many of them are already subject to criminal penalty, such as perjury.

Yves Smith was writing about it last night here: Mortgage Settlement Term Sheet: Bailout as Reward for Institutionalized Fraud “There is a an extremely aggressive push underway to get a deal inked. And it appears that the Federal banking regulators who are all co-opted by the industry (the only difference among them is how badly) have in turn succeeded in leashing and collaring the attorney generals' effort… And the reason the Obama camp is trying to declare victory and go home is that it is afraid that any serious effort to deal with the mortgage mess will reveal the insolvency of the banks…. This is simply another example of how the too big to fail banks are chipping away at the rule of law.”

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Josh Rosner sees AG Tom Miller, the lead negotiator with the banks, also vying to become the head of the Consumer Finanical Protection Bureau, and argues that “if a private sector attorney negotiated a deal like this, he'd be at risk of being sued for malpractice”

Barry connected the dots to the strength in the financial sector about midday with this caption  Banks Like Proposed Fraudclosure Settlement

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