Actually, that $33 billion figure is almost certainly light, but more on that later. Before we get into all the whys and wherefores, let's take a moment to celebrate the people who make America great: our lawyers, of course!
Bank of America shares gained more than 5% Monday on pure lawyer power, as it reached a deal with insurer MBIA (MBI) over mortgage-related disputes and somehow convinced attorneys general of New York and Delaware to drop their opposition to an $8.5 billion pennies-on-the-dollar mortgage settlement they reached in 2011. That 5% gain means about $7 billion added to the bank's market cap. Kudos to the bank's lawyers, starting with lawyer-CEO Brian Moynihan!
America may have been created by people who took risks: adventurers, entrepreneurs, inventors, pioneers, revolutionaries, robber barons and cold-blooded killers. But the time for that kind of heroism is past. Nowadays, you can never be too careful. Making something new is either a lawsuit waiting to happen, or far too costly to contemplate. Far safer to copy from someone else. Before you do that, however, you'll need to hire some lawyers to make sure you don't get sued for patent infringement.
And before you try and sell your product, you'll want to be sure anyone who uses it signs away every right they ever thought they might have or contemplated having. More lawyers! Just think of how many lawyers it must have taken Bank of America to buy Countrywide Financial -- a deal that will go down as one of the biggest value destroyers in history. And you think they didn't use lawyers to scrutinize every aspect of the mortgage-backed securities they created -- er, copied from another bank -- before they sold them? But that wasn't enough, as it turns out. A crisis came along, and every crisis has victims, and every victim has a lawyer, and suddenly Bank of America needed even more lawyers. That's when they appointed a lawyer, Brian Moynihan, to run the whole company. "It's day-to-day, hand-to-hand combat," Moynihan said in 2011 about the bank's mortgage-related legal battles.