The Right to Credit
[Guest post by DRJ]
Didn’t we just go through a mortgage meltdown because government forced mortgage lenders to loan to people regardless of their credit status? It looks like Illinois learned nothing from that experience:
“Illinois will no longer do business with Bank of America until the bank restores credit to the shuttered factory here where workers are continuing their sit-in, Gov. Rod R. Blagojevich announced Monday.
Executives at the plant, Republic Windows and Doors, which is on the city’s North Side, have said they need the restoration of their line of credit, which the bank canceled last week, to enable them to pay workers severance and vacation time owed to them.
“During these times of economic turmoil, we must ensure that workers’ rights are protected,” Governor Blagojevich said. He said the Illinois Department of Labor will file a complaint if negotiations between the factory’s owners, the workers’ union and Bank of America officials, expected later this afternoon, are not resolved rapidly.”
Barack Obama has already weighed in in support of the workers. They have my sympathy, especially if they are owed money for lost wages, but I’d like to hear both all sides of this story before I choose sides.
– DRJ
Well, if IL wants to play hardball, I suppose BoA could announce that they no longer will honor any checks drafted by the Government of Illinois, in any of their establishments.
Boycotts can flow in both directions.
Comment by Another Drew (e451ab) — 12/8/2008 @ 5:31 pm
…of course, I would bet Dollars to Doughnuts that BoA would happily restore that LoC if the Gov’t of IL will co-sign.
Comment by Another Drew (e451ab) — 12/8/2008 @ 5:34 pm
Why not just take over Bank of America and make all of their lending decisions? Micro-management is just a fine idea for a corrupt Governor and an inexperienced Senator. They know better than Bank of America who they should lend money too. Especially mortgages.
Comment by JD (059bab) — 12/8/2008 @ 5:34 pm
W.C. Hawley and Reed Smoot would be proud.
Comment by Neo (cba5df) — 12/8/2008 @ 5:39 pm
Bank lines of credit typically have provisions allowing banks to yank the line in the event of a material deterioration of the business, so I doubt BofA has any contractual obligation to ‘lend’ (give) money to the factory that is in such dire shape that they’re closing down (and so much so that they’re closing down without the notice period required by the WARN act). To me, it’s a no-brainer: banks loan money to those capable of paying it back and a closed down factory ain’t going to be paying anybody back.
If it is so important to the governor that these workers receive severance pay, let him propose to Illinois taxpayers that the state pay it. What’s that, he doesn’t want to spend ‘his’ own money, he just wants to grandstand and extort someone else to do it? Typical.
Comment by steve sturm (3811cf) — 12/8/2008 @ 5:45 pm
I live in IL, and from what little I’ve been able to tolerate listening to, the workers are owed wages because of a union agreement. However, they have all been fired and the factory has been closed. They all need to be arrested for trespassing, fined and thrown in jail. Oh, never mind, we no longer recognize private property rights in this country.
Comment by Sean (07d793) — 12/8/2008 @ 5:47 pm
Clearly, this of BoA’s fault, and they should immediately open and endless line of credit under the workers’ names, taking the out-of-business company out of the loop, except for the tab.
Comment by JD (059bab) — 12/8/2008 @ 5:52 pm
sell the factory, and use the proceeds to pay off the back wages.
anyone wanna bet that one reason they closed was that the union contract made them uncompetitive in the marketplace?
can you think of any other companies in a similar position?
Comment by redc1c4 (27fd3e) — 12/8/2008 @ 6:06 pm
It’s heartening to see that politicians have learned how it puts the entire economy at risk when they pressure banks to give loans to unqualified, but politically important, borrowers.
Comment by MayBee (d82a30) — 12/8/2008 @ 6:14 pm
MayBee – They cannot be expected to have already learned the lessons from contemporary history.
Comment by JD (059bab) — 12/8/2008 @ 6:16 pm
Sure, “we” all learned something, “we” being the people who were responsible all along. The rest of the populace, who live by feeding at the public trough, not so much.
Comment by Patricia (ee5c9d) — 12/8/2008 @ 6:17 pm
Add Baracky and Blagojevich to the list of people who learned zero, zip, nada.
Comment by JD (059bab) — 12/8/2008 @ 6:20 pm
What they learned is “Hey, this works great!
Comment by DRJ (b4db3a) — 12/8/2008 @ 6:28 pm
“Didn’t we just go through a mortgage meltdown because government forced mortgage lenders to loan to people regardless of their credit status? ”
No.
Comment by imdw (1d54b7) — 12/8/2008 @ 6:46 pm
“These workers deserve their wages, deserve fair notice, deserve health security,” Jackson said. “This may be the beginning of long struggle of worker resistance finally.”
Gosh, Jesse doesn’t miss an opportunity…of course workers deserve their earned wages and the company is responsible for that but health security? Obama has already pledged support, Jesse is making it his cause, and its been deemed a movement by Rep. Schakowsky. A cause du jour for our President-Elect.
Comment by Dana (79a78b) — 12/8/2008 @ 6:47 pm
Comment by imdw — 12/8/2008 @ 6:46 pm
Living in an alternative reality.
Comment by Another Drew (e451ab) — 12/8/2008 @ 6:48 pm
Comment by imdw — 12/8/2008 @ 6:46 pm
I’ll hate myself in the morning but… why on earth would you think that?
Comment by Dana (79a78b) — 12/8/2008 @ 6:50 pm
AD – They get to just make shit up as they go along. You have to admit, it makes life easier.
Dana – And it is all someone else’s fault. Not the politicians who constructed impediments to growth for the business via confiscatory taxation. Not the unions. Nobody but the bank, who apparently is required to lend money to companies that cannot even earn enough money to stay in business.
Comment by JD (059bab) — 12/8/2008 @ 6:51 pm
Dana – I denounce you.
Comment by JD (059bab) — 12/8/2008 @ 6:51 pm
“anyone wanna bet that one reason they closed was that the union contract made them uncompetitive in the marketplace?”
They make windows and doors. Any guess whats happened to the construction market lately?
Comment by imdw (b694ed) — 12/8/2008 @ 6:56 pm
Thank you, JD. You’re always so thoughtful. If we could all model ourselves after you, I just know the world would just be a sunnier place.
Comment by Dana (79a78b) — 12/8/2008 @ 6:57 pm
“I’ll hate myself in the morning but… why on earth would you think that?”
Because the problem wasn’t loans that they were forced to make. It was the loans they were wanting to make. It was the NINJA loans and other crazy products then going off and being collateralized and leveraged. It was HELOCS being made on inflated housing prices. We had a credit bubble and a housing bubble. You don’t force people to have a housing or credit bubble. Bubbles are what people willingly do, not what they’re forced to do.
Forcing businesses to lend at a loss increases their cost which they pass on to other consumers in the form of higher rates, or to their shareholders in the form of lower returns. Either way this causes less lending, not more. This should have the effect of tightening credit, of distorting the market into lower lending, not more.
Comment by imdw (b694ed) — 12/8/2008 @ 7:01 pm
“Why not just take over Bank of America and make all of their lending decisions? ”
An interesting idea. How much of their stock you figure the US govt owns?
Comment by imdw (b694ed) — 12/8/2008 @ 7:04 pm
Dana – As you suspected, your innocent question prompted a projectile vomit of BS.
Comment by JD (059bab) — 12/8/2008 @ 7:06 pm
Actually, they are owed 60 days wages due to federal law.
You need to either inform all workers 60-days in advance before closing the doors, or else pay 60 days wages.
The company gave zero notice, so they owe them 60 days pay. Thus is the law writen, thus must it be done.
As Scalia said, “Stupid, but Constitutional”.
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 7:10 pm
That poses no obligation on the bank, Scott. Just the company.
Comment by JD (059bab) — 12/8/2008 @ 7:11 pm
“Dana – As you suspected, your innocent question prompted a projectile vomit of BS.”
You disagree with this: “Forcing businesses to lend at a loss increases their cost which they pass on to other consumers in the form of higher rates, or to their shareholders in the form of lower returns.”
Its the basic argument against government intervention and mandates: that it raises cost and reduces activity. Often made by conservatives. Why do you think its “BS”?
Comment by imdw (c70387) — 12/8/2008 @ 7:13 pm
This is true…
I was merely speaking to the reason for the sit-in, and that the workers ARE owed pay.
The Bank can do as it likes, however, and I doubt it will so much as flinch at Illinoi’s threat.
Illinois should keep it’s trap shut, since we have a pretty big problem paying out bills on time ourselves. Pissing of banks should NOT be on Rod’s to-do list.
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 7:16 pm
Scott Jacobs- the law has exemptions:
(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;
(2) unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and
====
It’s hard to know if either of those apply.
I would think the union has attorneys that could help them fight this, and the proper venue is through a US district court. The local government can also get involved.
Certainly the BoA is not at fault and shouldn’t be getting the governor’s ire.
Comment by MayBee (d82a30) — 12/8/2008 @ 7:16 pm
It was all of the drivel around that sentence that prompted the BS. Like the fact that the Dems pushing banks for literally decades to lend money to people that were not credit-worthy, in order to promote their views of identity politics. An example was the lawsuits brought by Baracky, and other similar threats, that banks would have to increase their lending in a geographical area in order to open a branch there, under threat of a lawsuit. The community reinvestment act, and the other Dem identity politics stunts that either forced, or encouraged under threat of lawsuits, banks to lend to people otherwise not qualified. These issues, beyond a shadow of a doubt, are amongst the group of significant factors that led to where we are today. Period. The resultant decreased standards allowed for investment beyond people’s means. This should have surprised nobody.
Comment by JD (059bab) — 12/8/2008 @ 7:19 pm
Scott – Staying out of jail should be on Rod’s to-do list.
MayBee is going all fact-y and link-y tonite. Rowr.
Comment by JD (059bab) — 12/8/2008 @ 7:21 pm
So, BO forgets that he is President Elect and not still a Community Organizer? His actions and words have consequences, and should be used spareingly. I feel for the workers, having been out of work several times, but if the company has no money what happens?
Comment by LYNNDH (975d26) — 12/8/2008 @ 7:25 pm
Ah, but it occurs to me that of course the exemptions apply, and that’s precisely why Blago is pressuring BoA.
Comment by MayBee (d82a30) — 12/8/2008 @ 7:26 pm
Duh … by all means, they should sue Bank of America and the State and Federal governments should force Bank of America to pay the workers, and saddle the owner of the defunct company with the bill.
Comment by JD (059bab) — 12/8/2008 @ 7:28 pm
I’m telling your wife, dude…
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 7:35 pm
Scott – Better Half is still celebrating the election of the first Vietnamese member of Congress. She will forgive my momentary lapse.
Comment by JD (059bab) — 12/8/2008 @ 7:37 pm
I’m wondering if the company does owe money to the workers, under the laws discussed here, and they don’t reopen, forcing them to sell assets and honor existing debts, will the workers be the last to get their monies, after the lawyers get theirs…
Delicious irony there, with the tort lawyers getting more than the “little people” after the liberal unions and the politicians may cause all of this anyway?????
I love it….
Comment by reff (556669) — 12/8/2008 @ 7:40 pm
*shakes his face in anger*
Curses!!! I’ll get you yet JD!!!
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 7:41 pm
Scott Jacobs : Chief Justice Oliver Wendell Holmes is the one who first said “Stupid but constitutional.” He said that, if he had a stamp made with those words, it would take care of ninety percent of his opinions. Justice Scalia merely quoted Justice Holmes.
IIRC, the WARN law does not apply to small businesses such as the company in question – not enough employees to trigger the act.
Comment by longwalker (dda662) — 12/8/2008 @ 7:43 pm
feff – Doesn’t matter. It is now Bank of America’s problem, according to Gov. Blagojevich and Sen. Baracky.
Comment by JD (059bab) — 12/8/2008 @ 7:43 pm
So we make banks responsible for the failure of the companies they loan money to.
If we didn’t have a prescription for a Depression before, that ought to do it.
Comment by richard mcenroe (06b5ea) — 12/8/2008 @ 7:43 pm
Someone needs some denouncing.
Comment by JD (059bab) — 12/8/2008 @ 7:51 pm
Comment by imdw — 12/8/2008 @ 6:56 pm
I own a house that’s 52 years old, and just bought two replacement windows, and am looking forward to at least six more next year.
Comment by Another Drew (e451ab) — 12/8/2008 @ 7:51 pm
JD – imdw is trying to recreate the history already documented many times on this blog. Ignore her incoherent ramblings about the government not forcing banks to make loans to unqualified borrowers or helping fannie and freddie to create a secondary market to develop for the crap so people could get it off their balance sheets.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 7:53 pm
“So we make banks responsible for the failure of the companies they loan money to.”
Richard – “We make banks responsible for the failure of the companies they refuse to loan money to.” Fixed that for you.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 7:55 pm
“Someone needs some denouncing.”
You’re just the person to do it JD!
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 7:56 pm
I denounce Patterico for allowing this drivel to expand in such a manner that JD gets to decide that we have to denounce someone because he hasn’t decided who to denounce since he last denounced himself, or was it that he did denounce someone but he has done it so many times that he can’t remember who or what to denounce?????
(damn, that was tiring….)
Comment by reff (556669) — 12/8/2008 @ 8:00 pm
Ah yes, back to the whole complaining about socialism for the poor thing. Never mind the fact that we’ve been pouring money at the rich people — for god’s sake, don’t give any of it to the normal working poor! They don’t deserve it!
Comment by Phil (3b1633) — 12/8/2008 @ 8:01 pm
I denounce Richard McEnroe for making such a simply yet eloquent comment, that I could never have come up with. You sir, are denounced.
Comment by JD (059bab) — 12/8/2008 @ 8:02 pm
I am tired of bailing out these Blue States. Let them sink or swim on their own.
Comment by Dennis D (ae900a) — 12/8/2008 @ 8:03 pm
Nevermind, I denounce Phil and condemn him to a life of idiocy. Oops, already happened.
Phil – Do explain why Bank of America should be forced by Baracky and Gov. Blagojevich to loan money to a company that has gone out of business.
Comment by JD (059bab) — 12/8/2008 @ 8:04 pm
I really cannot wait to hear Phil’s reasoning.
Comment by JD (059bab) — 12/8/2008 @ 8:17 pm
…Phil’s reasoning…
Now, THERE’S an oxymoron!
Comment by Another Drew (e451ab) — 12/8/2008 @ 8:20 pm
“Like the fact that the Dems pushing banks for literally decades to lend money to people that were not credit-worthy, in order to promote their views of identity politics”
But this sort of thing would drive banks to lend less, to raise their rates and be more restrictive with other loans, not engage in a credit bubble. Something else was going on too. It wasn’t just on the low end of the market that failures occurred, but on the high end too.
Comment by imdw (f636ac) — 12/8/2008 @ 8:21 pm
imdw- how would politicians forcing banks to lend more drive them to lend less?
If it is as you say and they were just making the loans they wanted to make, why would they make loans they knew people wouldn’t repay?
Comment by MayBee (d82a30) — 12/8/2008 @ 8:25 pm
Forcing banks to lend to people that the banks would not otherwise lend money to would make the banks lend less? Let me get this straight. Normally, the banks would lend to the people that were credit-worthy. With Congressional urging by way of law, they now have to lend to all of the people that are credit-worthy and some that are not credit-worthy. That is a fucking increase in the people that they are now lending to, in every universe known to man, and all of the universes that are not yet known to man.
Prior to Congressional meddling and identity politics … Loans to the credit-worthy.
After above scenario … loans to the credit-worthy PLUS + many that are not credit-worthy. In imdw’s world, this results in a reduction.
Comment by JD (059bab) — 12/8/2008 @ 8:29 pm
But, that is just a good attempt to hijack the thread. Maybe imdw can explain to us why Bank of America should be forced by Gov. Blagojevich and Baracky to lend money to a company that has gone out of business.
Comment by JD (059bab) — 12/8/2008 @ 8:31 pm
It pains me to do this.
I think the “Banks will lend less” comes from the idea that banks will be made to CONTINUE lending. Meaning, the business they loaned to for the last 10 years suddenly becomes a very bad credit risk, butthe bank MUST continue to lend.
If that becomes the policy – as “my” elected folks in Illinois seem to want to do – then banks would simply not start lending in the first place.
Or stop doing business in Illinois. I would love to see BoA get other credit agencies to say “You don’t want to do business with BoA? Fine. You won’t be doing business with us, either. And we’re calling in all your debts. Pay up, bitches.”
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 8:34 pm
But, that is just a good attempt to hijack the thread. Maybe imdw can explain to us why Bank of America should be forced by Gov. Blagojevich and Baracky to lend money to a company that has gone out of business.
I think Phil explained this already. BoA should be forced to lend this company money because the rich people don’t deserve more money.
Comment by MayBee (d82a30) — 12/8/2008 @ 8:34 pm
“Never mind the fact that we’ve been pouring money at the rich people”
Pgil – We’ve been pouring money at companies, not people, unless you know somethong that the rest of us don’t.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 8:40 pm
Scott – I understand what you are saying, but that is not the point the mental midget was making.
MayBee – You are right. He said that they should just giving it to the working poor. What more could he possibly add to such an eloquent statement of Leftist ideals?
Comment by JD (059bab) — 12/8/2008 @ 8:40 pm
G’night, folks. I have to leave for the airport in a little over 4 hours. Ugh.
Comment by JD (059bab) — 12/8/2008 @ 8:42 pm
If that becomes the policy – as “my” elected folks in Illinois seem to want to do – then banks would simply not start lending in the first place.
Don’t you think that’s kind of what happened here? BoA had to take on CountryWide, after all.
If we pretend history didn’t start today, then we can easily imagine BoA doesn’t want to lend to this company because they’ve just absorbed a company with a bunch of bad loans. Then they had to make 400,000 of those loans more affordable to some of the risky borrowers to appease State Prosecutors.
One of those states? Illinois:
BoA is also being sued by a hedge fund for doing this and forcing losses on their fund.
So yeah, I think one more outside entity putting pressure on BoA to do something against it’s own interest is a fantastic idea.
I can see why they thought it might just be easier to not loan money to this window company (which obviously wants to skip town).
Comment by MayBee (d82a30) — 12/8/2008 @ 8:43 pm
“But this sort of thing would drive banks to lend less, to raise their rates and be more restrictive with other loans, not engage in a credit bubble. Something else was going on too.”
imdw – When a secondary market develops for the shitty paper with the encouragement of Fannie and Freddie, the banks will lend like weasels on crack because they can dump the paper on other people and comply with the regs all day long. This is simple stuff.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 8:44 pm
Sweet dreams, JD.
I’m sorry for my boring links tonight. I’ll try to do better.
Comment by MayBee (d82a30) — 12/8/2008 @ 8:45 pm
But I bet you all $5,000 and an underwater banana-hammock picture of JD that BoA coughs up the loan for Republic windows.
Comment by MayBee (d82a30) — 12/8/2008 @ 8:50 pm
Sure
The banks will lend less, unless they get a bailout that gives them back all the money they lost doing the loans they thought the US government was backing.
Oh
Wait
That is what happened already and we spent 800 Billion on to fix.
Comment by SteveG (a87dae) — 12/8/2008 @ 8:54 pm
“With Congressional urging by way of law, they now have to lend to all of the people that are credit-worthy and some that are not credit-worthy. That is a fucking increase in the people that they are now lending to, in every universe known to man, and all of the universes that are not yet known to man.”
Imagine if car companies had to give away 1 car for every 5 they sold. You don’t see how this would result in there being less cars, not more?
The reason why there would be less lending is because the mandate makes lending less profitable, which causes companies to leave the market, leading to less lending. It also causes banks to increase their rates for their other loans, to recoup their losses. This raises rates and lowers lending.
The mandate the CRA imposed is not a free lunch. It’s a transfer. And that has a cost — a reduction in lending.
“Maybe imdw can explain to us why Bank of America should be forced by Gov. Blagojevich and Baracky to lend money to a company that has gone out of business.”
I think BoA will see that it will make business sense to spend some of the billions it got with very few strings attached to extend credit to this company long enough for them to pay off the severance package for these workers. And they’ll do that without the US govt, a shareholder, having to take shareholder action.
Comment by imdw (05d9a7) — 12/8/2008 @ 8:56 pm
“imdw – When a secondary market develops for the shitty paper with the encouragement of Fannie and Freddie, the banks will lend like weasels on crack because they can dump the paper on other people and comply with the regs all day long. This is simple stuff.”
That’s very different than banks being forced to lend.
Comment by imdw (05d9a7) — 12/8/2008 @ 8:57 pm
My dad heads to China for 7 days (business trip), at 6am.\
Where you going?
Comment by Scott Jacobs (90ff96) — 12/8/2008 @ 8:58 pm
“The mandate the CRA imposed is not a free lunch. It’s a transfer. And that has a cost — a reduction in lending.”
Not while the mandate is still in place and the default rates on the CRA loans are only 5-6x prime loans. When home prices stopped appreciating and the default rate on subprime loans skyrocketed, that’s when all bets were off. Do some research and look at some actual numbers instead of just spouting theory.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 9:01 pm
If Bank of America caves, and it very well might given this public pressure, I wonder how many failing business customers will pay the taxes and shut the doors, leaving their banker to face any backlash from unpaid employees and their surrogates?
Comment by DRJ (b4db3a) — 12/8/2008 @ 9:03 pm
“That’s very different than banks being forced to lend.”
imdw – Wrong. Basic reason was to do it for compliance.
Comment by daleyrocks (5d22c0) — 12/8/2008 @ 9:34 pm
Banks depend on the feds for money to lend. They need to “toe the line” to maintain access to that cheap source of capital.
Rules and regulations that would deny or obstruct that necessary access to cheap capital influenced banks to make unsound decisions that the banks (claim) were insured by the government.
The Government IS indeed insuring those decisions, so we can assume there was some degree of responsibilty by the government.
That aside, this can be seen as more of the same.
BofA (whom I loathe) is being pressured to pay the payroll and benefits for a company who cannot pay it’s credit line. That means BofA is not being asked to absorb a loss on a old bad loan…. no, it is being asked to take on a new “loan” portrayed as an extension, that is a guaranteed loser.
So some people get paid, but now the banks and the feds are put in the awkward precedent of guaranteeing pay, severance and benefits to every worker of every company whose competitive position has failed in the marketplace…
but enough about the Big Three and the UAW, lets talk about windows and construction.
Lets say you own a window company and for months now you have been trying to weather the construction down turn… now a few huge orders in a row are cancelled. The last one comes as a huge shock and means there are NO orders, there is NO cash. Cash flow has come from a credit line from Bof A for months now. There is no 60 days. You have been carrying all those employees at a loss… extending your line of credit beyond the point where it has been called just to keep the plant open and the employees going through Christmas. Things are way past the point where you could liquidate all your life’s savings to pay everyone off because you already did and realized you were pissing into a 70MPH wind on that one and saw that money that constituted your life’s savings lasted for an hour of operating costs…. so, what do you…you.. not faceless corporation… what do you do?
At some point you need to close the doors and the Bank needs to protect it’s employees by refusing to throw more good money after bad.
Comment by SteveG (a87dae) — 12/8/2008 @ 9:36 pm
FYI, according to the Chicago Trib, Blagojevich was taken into federal custody this morning in a corruption probe.
Comment by CTD (7054d2) — 12/9/2008 @ 6:44 am
Surprise, surprise. It looks the the moralizing governor will be writing a lot of checks in the near future – for his defense lawyers, his bail …
Comment by great unknown (b751d2) — 12/9/2008 @ 6:52 am
I wonder if the Feds could argue now, with so many corruption events identified, that the government of Illinois is an “ongoing criminal enterprise” and subject it to the same sort of supervision the Teamsters lived with until recently. The RICO statute is a friend to the people!
Comment by MTF (8254eb) — 12/9/2008 @ 7:37 am
Here’s the link, good bye to another crooked Ill. Gov. http://www.chicagotribune.com/news/local/chi-rod-blagojevich-1209,0,7997804.story
I wonder if Obama has ties to this, and if Obama will pardon Rod B. as his first order of business 1/20/08?
Comment by PCD (7fe637) — 12/9/2008 @ 7:38 am
Of course he has “ties to this”. It’s Chicago politics, for crying out loud.
Comment by MTF (8254eb) — 12/9/2008 @ 7:47 am
And with the newly arrested Gov., what does this do to the BoA matter?
Comment by Techie (07c8ee) — 12/9/2008 @ 7:52 am
The BofA matter is noise. The state couldn’t stop doing business completely with a bank the size of BofA without several years of determined effort, RFP’s for services, and probably extensive contract changes (like for debt agreements, escrows and trusteeships). It’s BS.
Besides the state is a huge net borrower, and as were all finding out borrowers can’t be choosers.
Comment by MTF (8254eb) — 12/9/2008 @ 7:59 am
He was trying to sell Obama’s Senate seat. That’s why he was arrested instead of being notified of the indictment and asked to surrender which is the more usual procedure in such cases. He had to be stopped before he closed the deal.
Comment by nk (5a0e72) — 12/9/2008 @ 8:40 am
Live news conference with U.S. Attorney for N.D. Ill. here.
Comment by nk (5a0e72) — 12/9/2008 @ 9:06 am
Some poor Illinois soul just saw his Senate seat marched away in handcuffs. It’s a shame, because he’d probably paid good money for it.
Comment by MayBee (4a9480) — 12/9/2008 @ 9:07 am
Apparently he can still appoint someone while he’s in prison, however.
Comment by aphrael (9e8ccd) — 12/9/2008 @ 9:15 am
Oh yeah, that’d be the perfect denouement to this latest atrocity in IL – but it won’t happen.
Comment by Dmac (e30284) — 12/9/2008 @ 9:20 am
Looks like the State of Illinois will no longer be doing business with Gov. Blago. Except in Court.
Hope he got it in cash, cuz his credit’s trashed!!
Comment by Tex Lovera (456ded) — 12/9/2008 @ 9:39 am
He can until the General Assembly removes him from office. Which should be by the end of the week.
Comment by Scott Jacobs (90ff96) — 12/9/2008 @ 9:44 am
I am hearing rumors that Obama is getting looked at for some other Rezko deals.
And pardoning Rod would be HUGE ammo against Obama in 2012.
Comment by Scott Jacobs (90ff96) — 12/9/2008 @ 9:48 am
Ok, I am not a doctor even though I play one at home.
Mike K, Corwin,
There have always floated rumors that Blagojevich associated with ladies of low social status. The kind of stupid arrogance alleged by the U.S. Attorney … could it be the product of tertiary syphillis?
Comment by nk (5a0e72) — 12/9/2008 @ 10:00 am
I wonder if Obama has ties to this, and if Obama will pardon Rod B. as his first order of business 1/20/08?
Most likely, just the opposite. I’m betting that the Office of the President-Erect did not like in the least being extorted and sicced Fitzgerald on Blago.
Comment by nk (5a0e72) — 12/9/2008 @ 10:03 am
Illinois does not have a two-party system. We have a Combine. Ok? When it comes to crime, it comes in one flavor — Republicrat. And when it comes to law-enforcement honest Democrats and honest Republicans work together.
Comment by nk (5a0e72) — 12/9/2008 @ 10:09 am
All 7 of them.
Comment by Scott Jacobs (90ff96) — 12/9/2008 @ 10:19 am
BoA is going to extend the credit line.
You guys owe me $5000 and a picture of JD in a speedo.
Comment by MayBee (4a9480) — 12/9/2008 @ 12:50 pm
JD might pay the $5K just so that pix never surfaces.
Comment by Another Drew (0c4ac4) — 12/9/2008 @ 12:52 pm
More on BoA….
I bank with them.
I wonder if I announced I was going out of business if they would extend/increase my line of credit?
I surely could use a little time in the sunny Caribe.
Comment by Another Drew (0c4ac4) — 12/9/2008 @ 12:54 pm
I feel sorry for BoA in this case.
I hope they get paid back, and this doesn’t start a new cycle. Perhaps Blagojevich’s take down today will discourage potential imitators.
Comment by MayBee (4a9480) — 12/9/2008 @ 1:10 pm