Wow. While Banktown USA is being lulled to sleep with PR dreck like BofA hiring bankers for small businesses touting a supposed .35% “increase” in the corporate body, here’s what is actually going on regarding the megabank.

BAC has been downgraded by the bond market as state attorney generals come out of the wood-work in the fake foreclosure-gate mess. BAC’s continued exposure via Countrywide — ta-da! — has been termed “devastating” by folks who actually pay attention to more than press releases. Countrywide wrote $1.4 trillion worth of mortgages, virtually all of them without meeting any kind of safety and soundness standards.

Meanwhile, the folks who got stuck holding the securities Countrywide/BAC created out of this junk are heading to the courts for redress. BAC did win an important but little noticed case in New York this week on this very point, which made clear that courts are going to require more than a couple disgruntled investors to bring these suits.