From the recent banking quarterly reports to the front page of the NYT/Business, the article “Bank Profits Appear Out of Thin Air”. The banking and investment house crooks are still gaming John Q. Public.
The article refers to Bank of America’s fraudulent earnings scheme of booking a $2.2 billion gain that falsely increases value of the Merrill Lynch’s assets recently acquired. BofA decided to give themselves a phony profit bump by raising the value of Merrill assets to prices significantly higher than Merrill kept them.
But it wasn’t only the banksters at BofA pulling this nonsense; All the cool kids were doing it:
• Goldman Sachs and the disappearing month of December
• JPMorgan’s profit was due to repricing the value of its falling bonds
• Citigroup also used the bond trick.
Barry Ritholtz http://www.ritholtz.com/blog/ comments, “Instead of receivership and liquidation, we rewarded these cretins with your grandchildren’s lunch money. It is idiocy on a grand scale, beyond my feeble imagination."
Follow-up on Mre Crooks:
ReplyDeleteCompare the behavior of the Chairmen of the 1950s and Volcker to that of Greenspan. Chairman Eccles and McCabe both lost their Chairmanships because they wouldn’t compromise Fed independence. They stood their ground even after being summoned to the White House. Martin, appointed by Truman, was in later life referred to by Truman as “the traitor” presumably for taking the punch bowl away. The public image of Volcker is that of a man who twice a year endured public Congressional assaults, resisted political pressure, and enabled the Fed to stay the course.