Which is why it is totally inexplicable why the New York Fed and PIMCO are now requesting a repurchase of mortgages sold to them by Bank of America. And why the Federal Home Loan Bank of Chicago is suing BOA:
According to a letter to investors from President and CEO of the FHLBC, Matthew Feldman, the securities listed in the complaint totaled more than $4.3 billion and were all rated triple-A when purchased. “We contend that the quality of the loans that comprise the pools of securities cited in today’s complaints was inconsistent with the description in the pre-purchase documents prepared by the underwriters and issuers of the securities,” Feldman wrote.
I suspect it is probably safe to declare that the big Wave Two rally that began in March 2009 and was led by the financial stocks has passed its peak now. This should also mark a surge in USD strength contra nearly everyone’s expectations.