Huzzah! Great news for Bank of America
Wait a minute -- that's nuts. Why is that good news?
Beats me, but the stock market must think it is, because it rewarded Bank of America by upping its stock price by almost 3% when it heard the news.
But that's even more than Bank of America's profits since the financial crisis.
The market moves in mysterious ways. The stocks from JPMorgan Chase
Any other "good news"?
You betcha! There could be even more settlements coming down the road with the large banks that created mortgage-backed securities during the boom, including JPMorgan Chase, Citigroup, and Wells Fargo.
Who gets the money? Homeowners adversely affected by the housing crisis?
Don't be silly. This money goes to 22 of Bank of America's biggest institutional bondholders, such as BlackRock
How did Bank of America get so lucky?
Back in 2008, it bought troubled mortgage lender Countrywide Financial in what some analysts -- including our own Morgan Housel more than two years ago -- say is one of the worst banking takeovers ever. Countrywide was in huge trouble at the time after many of its high-risk subprime loans defaulted. But hey, who's laughing now?
I don't think I can take any more good news today.
Wait, I'm not done! Bank of America and other large banks may be on the hook for more! A coalition of 50 state attorneys general are in settlement negotiations with the banks over their shoddy foreclosure practices, with $20 billion being the number discussed. Oh, and I almost forgot, another $21 billion is being sought by bond insurer MBIA
With news like that, can happy days be far behind for the banking industry? Comments are definitely welcomed.
Fool contributor Dan Radovsky has no financial interest in the above mentioned companies, but he can't seem to un-stick his sarcasm meter.
The Motley Fool owns shares of JPMorgan Chase, Wells Fargo, and Bank of America, has created a ratio put spread position on Wells Fargo, has opened a short position on Bank of America. Motley Fool newsletter services have recommended buying shares of BlackRock. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.