Bank of America Corp. has agreed to pay nearly $17 billion in a settlement with federal regulators over allegations that it misled investors into buying risky, mortgage-backed securities in the run-up to the 2008 financial meltdown.
The Department of Justice, which announced the $16.65 billion deal today, describes it as "the largest civil settlement with a single entity in history."
BOA, the second-largest U.S. bank, will pay a $9.65 billion penalty and provide $7 billion in relief to troubled borrowers, Reuters reports. The bank says it's expecting a $5.3 billion hit to third-quarter earnings as a result of the deal.
The settlement "addresses allegations that Bank of America, Merrill Lynch, and Countrywide each engaged in pervasive schemes to defraud financial institutions and other investors in structured financial products known as residential mortgage-backed securities, or RMBS," Attorney General Eric Holder said.
The securities typically included a high percentage of sub-prime mortgages and the sellers misrepresented to investors the degree of risk involved, Justice alleges. When the housing market collapsed, many of the RMBS became worthless.
Holder said the subprime mortgages bundled into the securities "contained material underwriting defects; they were secured by properties with inflated appraisals; they failed to comply with federal, state, and local laws; and they were insufficiently collateralized."
Even so, he said "these financial institutions knowingly, routinely, falsely, and fraudulently marked and sold these loans as sound and reliable investments. Worse still, on multiple occasions - when confronted with concerns about their reckless practices - bankers at these institutions continued to mislead investors about their own standards and to securitize loans with fundamental credit, compliance, and legal defects."
Countrywide, acquired by the Charlotte, N.C.-based Bank of America in the wake of the 2008 financial collapse, accounts for most of the alleged wrongdoing. BOA also owns Merrill Lynch.
The settlement is the latest in a series prompted by the Justice Department actions. In November, JPMorgan Chase agreed to pay $13 billion and in July, Citigroup came to a $7 billion deal with the federal investigators.
But, as The New York Times writes: "More than any other Wall Street giant, Bank of America was the source of the troubled subprime loans that helped ignite the crisis."
The Times says that while no bank executives will face charges as part of the agreement, "prosecutors are preparing a separate civil case against [former Countrywide CEO] Angelo Mozilo, the man who came to embody the risk-taking for which Bank of America is now paying dearly, a rare move against a senior executive at the center of the financial crisis."
The newspaper says Mozilo's company "originated mortgages that went to people with little income to repay them, causing devastating losses for investors who bought the loans."
USA Today writes: "Despite the size of the new settlement, some consumer groups have criticized the lack of detailed data on investor losses linked to the mortgage-selling scheme, as well as an absence of charges against specific bank officials."
When Europeans came to the Americas, they brought some nasty diseases — smallpox, cholera and typhus, to name a few.
But one pathogen was already there. And it likely traveled to the shores of South America in a surprising vessel.
By analyzing DNA from 1,000-year-old mummies, scientists have found evidence that sea lions and seals were the first to bring tuberculosis to the New World. The sea animals likely infected people living along the coast of Peru and northern Chile, a team from the University of Tubingen in Germany reported Wednesday in the journal Nature.
"We weren't expecting to find a connection to marine mammals," says archaeologist Kirsten Bos, the lead author on the study. "It surprised us all."
Ancient Peruvians might have caught the TB bacteria while hunting and eating seals, Bos says, or during some type of ceremony.
"These people had a spiritual connection to seals," she says. "Images of seal hunting and seals themselves have been found on ceramics used by Peruvian cultures. One ceramic has a sea lion on the handle. That's pretty neat."
Previous studies have found signs that tuberculosis infected people across North and South Americas. But genetic data suggest that TB originated in Africa.
So how did the bacteria finds its way to the New World before Europeans hit the high seas?
To try and figure that out, Bos and her colleagues screened thousands of skeletons for signs of TB infections. TB is known for damaging lungs. But the infection can also scar bones and curve the spine.
Sixty-eight skeletons had traces of TB infections. Bos and her colleagues could extract tuberculosis DNA from three skeletons found in southern Peru and dating back to 700 to 1,000 A.D.
The team got enough DNA to reconstruct the bacteria's genomes. To their surprise, the genes didn't look like those from TB that infects people today. Instead, the bacteria were most closely related to a type of TB that infects Pinnipeds — seals, sea lions and walruses.
"Our results suggest that TB emerged in Africa about 6,000 years ago," Bos says. "Then at some point, the bacteria made a jump from land animals to a sea lion or seals."
These animals likely spread the bacteria to Australia and South America, where people were infected, she says.
The team can't rule out the possibility that the Peruvians passed TB onto seals or sea lions. But Kos believes that's an unlikely scenario: "It would require humans having regular interactions with [live] seals, like rangers have with cattle today. Humans weren't farming or herding seals then."
The study couldn't determine how common the ancient TB strain was in humans — or even if the bacteria could spread from person to person.
But one thing is certain: The strain of TB found in the mummies isn't the one circulating in North and South Americans today. "It seems the ancient strain of TB was actually replaced by European lineages," Bos says.
Amidst the flurry of coverage about Michael Brown's death and the reaction in Ferguson, Mo., journalists have been unpacking St. Louis' long, tense history of racial unrest. In some of these stories, the parallels between the events of years past and those of the past few weeks are striking.
There aren't many clear details surrounding Donnell Dortch's death on Sept. 23, 1962 — at least, not from the newspapers that wrote about it.
It was 11:40 a.m. on a Sunday. Donnell Dortch was driving a car in Kinloch, the predominantly black St. Louis suburb where he and his family lived. And as United Press International told the story, at some point in the 19-year-old's drive, a black police officer named Israel Mason stopped Dortch, who was also black.
This is where the details get fuzzy.
The Chillicothe Constitution-Tribune, a small Missouri newspaper, reported that the 74-year-old Mason tried to give Dortch a "traffic warrant" for careless and reckless driving. UPI described Dortch's driving as "drag racing," though no other contemporary newspapers mentioned this detail.
Dortch refused the warrant. It's hard to glean why or how he refused it, but UPI wrote — very pointedly — that he did. As the Constitution-Tribune described it, "Officer Mason said he and Dortch wrestled for his pistol while the policeman was trying to free it from his holster."
Then, the officer said, the pistol discharged by accident.
Here the details get fuzzier.
According to the county coroner, three witnesses recounted seeing a starkly different string of events, one without accidents, with what seemed like more intention.
"According to the witnesses," the Constitution-Tribune writes, "Mason pulled Dortch from his car and struck the youth twice with the revolver. Then Mason stepped back five feet and fired, the witnesses said."
Donnell Dortch's death certificate tells the rest of his story with much more certainty and accuracy than the media's reports. As was common with very public, very contentious deaths, the wire services and local newspapers focused more on the protests and riots that followed Dortch's killing than on the death itself — or the altercation leading up to it.
Hours after his run-in with the police, Dortch died in a county hospital in Clayton, Mo., bleeding profusely from where a bullet, or bullets — it wasn't made clear how many — pierced his stomach. He was unmarried, survived by his father, Lonnie Dortch, and his mother, Mable Marable Dortch.
Kinloch exploded with anxiety and protest.
UPI describes Kinloch as a small, 6,500 person town, "one of several predominantly Negro suburbs in the St. Louis area which date back to Civil War days." (For some comparison, Kinloch, which shares a border with Ferguson, had about 298 residents during the 2010 U.S. Census — most of whom were black.)
Crowds of hundreds assembled before Kinloch's city hall in the days after Dortch's death, chanting "We want Mason! We Want Mason!" (The police officer was suspended from his post and eventually resigned.)
Some people were setting the town ablaze, razing an elementary school and a string of empty houses in the process, trying to light the police chief's new home on fire. (UPI writes that the police chief, "acting on a hunch, drove home, discovered the blaze and extinguished it himself.") The same UPI article reports that there were two shotgun blasts fired into the Kinloch police station, and that a bomb threat was called into a high school. Residents carried signs, inscribed with phrases like "Was Murder Necessary?" and "How Much Training Have Our Officers Had?" and "Will Our Son Be Next?" One resident who spoke to the UPI writer described the town police as "Kinloch cowboys" and "village police," and said that they wanted the "St. Louis county police to protect the area."
Local officials stepped up their reaction. Almost a hundred county and town police were ordered to man Kinloch's streets and were equipped, according to UPI, with machine guns and police dogs. Fifty people were rounded up and questioned about the violence that had unfolded following Dortch's death. Missouri Gov. John Dalton assured folks that he'd do whatever necessary to "preserve the peace." He consulted with the Missouri highway patrol, and debated whether or not send in the National Guard.
Kinloch's mayor, Clarence Lee, enacted a curfew and denied that this situation — the hordes of people rioting in the streets, the violence — stemmed from any sort of racial tension. It was, UPI quotes him saying, "wholly a problem of police enforcement, resulting in a misunderstanding between the citizens and the police."
The UPI account, like so many from that era, leaves it at that.
How History Was Buried In The Press
Back in the mid-1900s, the civil rights movement was just gaining momentum, and there was a spate of stories similar to Donnell Dortch's that unfolded like his, that were retold like his. It seems obvious now, looking back 50 years, that this sort of unrest was ubiquitous. But did it feel that way then?
I came across Dortch's story when doing a more general flick through newspaper archives from 1950 to 1970. There were a handful of headlines in these newspapers related to racial discord, mostly clustered together in one section dedicated to that type of coverage, like: "Racial Clash" and "Negro Picket Slugged at Black Muslim Rally" and "Race Hikers Choose Jail Over Bonds."
The AP headline "8 Fires Set in Negro Suburb Of St. Louis After Shooting" stood out. Not just because of the story's physical proximity to what we're watching unfold today, but also because of its brevity. It was followed by four brief paragraphs about a string of fires and violence in Kinloch, perhaps triggered by the death of a black teen.
(The AP wrote, as if explanation enough, that "The Negro community has been the scene of violence since an elderly policeman killed a young man Sunday.")
The reporters and newspapers that most closely covered these stories so tangled with race and segregation, were mostly black, mostly in Southern cities. It was easy for the local press to bury and avoid news that was uncomfortable.
Last year, NPR's Audie Cornish traveled to Alabama and spoke with Hank Klibanoff, co-author of The Race Beat. They talked about how the civil rights movement was covered in Birmingham — how differently Northern and Southern newspapers wrote about the strife. ("The South cannot help over time but see itself in the coverage. And over time, that is a picture that the South was not comfortable with," Klibanoff told Cornish about the lack of coverage in Southern media outlets. "No one likes to see themselves screaming and yelling and looking hideous and squaring off as a mob against one black person.")
Klibanoff and his co-author, Gene Roberts, wrote about the role that the national American media played in reporting about the civil rights movement. Ultimately, they write in The Race Beat, "the mainstream press — the white press — would have to discover racial discrimination and write about it so candidly and so repeatedly that white Americans outside the South could no longer look the other way."
Today, social media makes it so that these stories are harder to ignore, harder to avoid. Folks on Twitter — journalists and activists — who might not have gotten attention in an earlier era, are elevating these stories to a national level, and at times, becoming intertwined with these narratives. It's hard to look the other way when a hashtag is trending nationwide.
But the stream of information coming through social media channels carries a whole other set of questions. Amidst a flood of news about Michael Brown and the protests in Ferguson, sometimes it can still be hard to know what, exactly, we're seeing. It's the "tick tock," Klibanoff tells me — the specifics of who said what and what happened — that can get missed or muddied in the streams of tweets, in the constant flow of network news. "We're numbed by the barrage of news sources," he says.
The tiny amount of surviving coverage about Donnell Dortch leaves us with many questions about what happened. Yet even now — despite hundreds of reporters having descended on Ferguson, Mo., scouring for details on a similar St. Louis death — it's still difficult to know what we're seeing and missing. What most can agree on is this:
It was about noon on a Saturday. Michael Brown was taking a walk in Ferguson, the predominantly black St. Louis suburb where he and his family lived. And as news outlets tell the story, at some point in the 18-year-old's walk, a white police officer named Darren Wilson stopped Brown, who was black.
This is where the details get fuzzy.
Restaurants and hotels are posting new job openings faster than they can fill them. This is a promising sign for the economy.
Many jobs in the hospitality industry have low pay but don't require specialized skills. So they often serve as a stopgap for people between jobs. In periods when the broader job market is bleak, jobs in this sector tend to get snapped up quickly.
The growing number of unfilled restaurant and hotel jobs implies that many potential workers are finding other jobs or looking at these postings and saying, "Meh, maybe I can do better."
After adjusting for inflation, wages in the sector are lower today than they were four years ago. But that could change. If those job postings go unfilled for long enough, employers may offer higher salaries to lure more or better applicants.
It's worth noting that this territory hasn't yet been rigorously explored by economists because this particular data set only goes back to 2000, which isn't long enough to fully understand the relationships between job postings, hirings and wages.
This data set was brought to our attention by a blog post Dean Baker wrote a few days ago.
Join us for a First Listen Live video webcast with Interpol on August 26 at 10 p.m. ET (7 p.m. PT). The New York band will play songs from its upcoming album, El Pintor (out Sept. 9), in public for the first time.