AFL-CIO Guy Blasts Treasury On Foreclosuregate; Bank Valuations, TARP, Systemic Risk

"I'm concerned about Treasury making representations categorically that you don't see a systemic risk," Silvers told Treasury’s chief homeownership officer. "And let me walk you through exactly why..."

"[The NY Fed to BofA] letter asks for $47 billion of mortgages -- of mortgage-backed securities to be repurchased at par," Silvers went on... The Fed tells us they're worth 50 cents on the dollar. So if the Fed's request to Bank of America is honored, right, Bank of America... will take a $23 billion loss.

"The Federal Reserve further informs us that there is nothing particularly unique about that particular set of mortgage-backed securities -- meaning they have not been chosen... because they're particularly bad. They believe they are of a common quality with the rest of Bank of America's underwritten mortgage-backed securities. There are $2 trillion [worth] of Bank of America's underwritten mortgage-backed securities.

...

"Now do you wish to retract your statement that there is no systemic risk in this situation? And the word is 'risk' -- not 'certainty' -- but 'risk'? And I would urge you to do so, because these things can be embarrassing later."