Is There A Connection Between WikiLeaks And Bank of America’s Put-Back Apocalypse Nightmare?
Could the huge cache of documents WikiLeaks founder Julian Assange says he has obtained from a hard drive at one of America’s biggest banks reveal fraudulent lending at Countrywide Financial?
A year ago, Assange mentioned that he had five gigs of documents on Bank of America. So when he revealed that one of the next “megaleaks” from his organization would be about a big American bank, pretty much everyone concluded that he was talking about Bank of America.
Bank of America issued an poorly thought out non-denial, protesting that it had no proof of Assange’s claim to have a hard drive and that Assange hadn’t named the bank in his latest statement.
That convinced just about no one. In fact, Bank of America’s spokesman sounded disappointed with the lameness of this response when I spoke to him about it.
But yesterday, reporter Charlie Gasparino—who recently left CNBC to join Fox Business News—said he had spoken with someone who had seen the WikiLeaks documents. That person said they were clearly about Bank of America, although it wasn’t clear how damaging they were.
Gasparino’s got pretty good sources inside of Bank of America. He got the story that former CEO Ken Lewis was resigning minutes before the news was released. (I know, I know: minutes! But that’s really how financial reporters keep score these days.)
Now Gasparino says that the big fear inside Bank of America is that the documents reveal fraudulent mortgage lending by Countrywide Financial, which was acquired by Bank of America . This creates the possibility that investors in bonds backed by Countrywide-originated mortgages may be able to demand Bank of America buy back the loans at par, a situation which would create a windfall for the investors and possibly huge losses for Bank of America.
So perhaps these two threads—WikiLeaks and put-backs—are coming together to create a perfect financial storm.
Questions? Comments? Email us atNetNet@cnbc.com
Follow John on Twitter @ twitter.com/Carney
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC