Wallstreet, Bank Stocks don't even Blink at Newest Foreclosure Scandal

Thank you Dan Wilchins of Reuters!

Now as we all know ... our current economic conditions are the product of the credit-default swap / housing crisis.  So its with a bit of surprise that this headline grabbed my attention.

Foreclosure mess doesn't dent bank stocks

Really? So a political hot potato that is all state attorney generals launching a joint investigation of the practices banks used to evict people from their homes isn't a big deal?  I guess with so many of them going on, whats a few mistakes?

I am not trying to slam the banks for this ... I'm just surprised wall street doesn't care or even interested about it.

Case in point:

Bill Fitzpatrick, an analyst at Optique Capital Management was quoted saying, "this (the joint investigation) may push out mortgage foreclosures until later in the future, but I don't see how it affects the fundamental profit outlook of the banks,"

Case in point:

Analysts at Barclays Capital said that to the extent there's a problem, it's likely procedural.  "We suspect most disputes are about court documents, not necessarily whether the borrower defaulted," wrote a team of analysts led by Jason Goldberg.

The article goes further ... it points to how JPM stock has risen 2.3% and how its managment seems fairly confident that, "...pretty comfortable" that at the end of the process its foreclosures were proper."

I mentioned that this is a hot potato, democratic lawmakers are already calling for widespread foreclosure halts.  If the banks get caught engaging in fraudulent activity especially during the bailouts than it will be interesting to see the fines, penalties, and possible jail terms.Either way the analyst's at Barclay's are right when they said, "It could take some time to clear up this issue."