Friday, April 9, 2010

Big Wall Street Banks Hide Their True Debt Levels Every Quarter Now

Well it looks like the Wall Street Journal only took a little over three weeks to report what I suggested in mid-March:  Lehmangate Part 2: What Is the Rest of Wall Street Hiding?  Here's the link to my post in which I suggested that Lehman was one of many using similar fraudulent accounting in order to dress up their balance sheet:  LINK.

The Wall Street Journal today reports  Big Banks Mask Risk Levels:  Quarter-End Loan Figures Sit 42% Below Peak, Then Rise as New Period Progresses.  I don't have a subscription to the Wall Street Journal, but here's a Reuters news report:  "Major U.S. banks temporarily lowered their debt levels just before reporting in the past five quarters, making it appear their balance sheets were less risky, the Wall Street Journal said, citing data from the Federal Reserve Bank of New York" - Link:  Reuters

This should not surprise readers of this blog.  Wall Street is notoriously "Monkey see, Monkey do."  So it only made sense that every other big Wall Street bank would be using accounting manipulations to accomplish the same fabulous results as Lehman, before Lehman collapsed.  The only difference is that the remaining Wall Street banks have been deemed by the Fed/Treasury as "too big to fail."  We have monkeys running the big banks and we have monkeys overseeing and regulating the big banks.  I think Bernanke and Geithner deserve a Big Banana award.  But what about the citizenry who enable these people to remain in power?

10 comments:

  1. Dave,

    They had to rescind FASB rules or the whole system would have collapsed. This gave the banks a license to lie. These big banks are broke beyond broke and are little more than walking zombies.

    I went to BofA to cash a $1600 check and they required 2 forms of ID and a right thumb print. The kicker was, they only had five 100's, two 50's and had to pay the rest in 20's. They barely have enough cash to make it through the day. Truly sad.

    Joe M.

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  2. Wow Joe. That's an incredible story re: B of A

    I have always maintained that our financial system collapsed in Sept 2008 and they ultimately had to throw in $23 trillion in direct cash PLUS Treasury guarantees to keep it going. That $23 trillion total number is TARP Watchdog Neil Barofsky's figure, not mine.

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  3. Agree Dave but in order to maintain the float they can never mark to market. They are all stealth BK and one can only watch and wonder how long we have before it all locks up.

    Joe M.

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  4. Agreed but as long as the rest of the world and the people in this country let Bernanke operate the printing press, they can keep banks liquid and Treasury funded.

    If you look at Weimar Germany, that game didn't end until the mark literally collapsed. I expect a similar path, with different "twists" along the way to occur in this country.

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  5. You're right dave, we won't go through the total fear and capitulation phase until the USD collapses and history tells us we are on the right path to this end.

    Joe M.

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  6. ZeroHedge has a nice article regarding the fluctuating debt levels, also inspired by the WSJ. However, the site is down now for some reason...heh heh heh.

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  7. WOW! The reality of it all

    http://www.loansafe.org/forum/deed-lieu-foreclosure-do-you-need-help-walk-away/11618-how-long-between-first-missed-payment-foreclosure.html

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  8. LOL. That's an awesome site. Tell ya what, I think this next wave of credit defaults/mortgage defaults is going to take A LOT of people down.

    I'm seeing homes in the 200-500k range selling around Denver, with the tax credit due to expire at the end of this month, but I'm seeing 2 "for sale" signs pop up for every one "sold" sign.

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  9. @Anonymous: either zerohedge is moving servers or it was hacked and crashed. I bet it was the posting of this article and zero's related commentary:

    http://dailycaller.com/2010/04/07/debt-denial/

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  10. Let's see--so the 18 banks which already are getting a free pass on the mark to fantasy accounting, still have to window dress their balance sheets to look good so they can continue to leverage up not to give credit to consumers or small business, but to fund their proprietary trading desks to better utilize their HFT and buy each others stocks to run those up for their option bonus and performance plans.

    Did I miss anything essential?

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