Was the public disclosure of the bank stress tests delayed so Goldman Sachs could raise capital? Is national policy managed to serve one private investment group’s convenience? As the disclosure and fiduciary laws related to protecting the rights of existing creditors and shareholders were violated in Bank of America’s purchase of Merrill Lynch, are the disclosure rights of new bondbuyers to be violated for Goldman Sachs? How can investors price a security if the Wall Street-Washington axis are free to manage material omissions for the purpose of fleecing them? And if price has no meaning, what then?

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9 Comments

  1. Dear Mark and Gerry,

    Perhaps both of you have your heads in the sand.

    One day our children will look back in anger and utter disbelief at many too many leaders and followers in my not-so-great generation who had the chance at least to try and mitigate the fully expected damages of pollution, climate change, environmental degradation, resource dissipation, biodiversity extinction and overpopulation but abjectly failed because we chose to play around the edges of the global challenges before us and refused to take demonstrably responsible action in the face of clear and present dangers. Sacrifices of ‘sacred cows’ and ‘golden calves’ often associated with being honest, earning wealth, exercising moral courage and making necessary changes were too damn hard for so soft, satisfied, sanctimonious and selfish a generation of leading elders, I suppose.

  2. Gerry, good statement. Lots of kool aid drinkers pulled the lever for Chairman Mao-bama & socialism. More than likely time for a name change. The USSA. The United Social States of America.

  3. Steve,
    Seems like you’re still sipping the kool aid?
    If someone would take all the clips from past presidents and run them when they announce new policy,we would hear everyone of them start their proposals and reports with “WE”
    If you take Obama’s statements he always starts with “I”
    I find that a bit meglomaniacal.
    I suspect that Bill Aires is writing his Tele-promprompted speeches.
    Obama is following the exact agenda that any good socialist would pursue.
    I’m not a right-wing republican or a blue-dog democrat but it is what it is.

  4. Bank Of America buys Countrywide, my mortgage increased… I’ll directly pay my homeowners’ insurance and property taxes so escrow isn’t an issue. The payment I sent Countrywide was enough, What the hell is happening?

  5. Among the bought-and-paid-for politicians in Washington, DC, the Greedy Boys of Greenwich and the Wonder Boys of Wall Street, is there one human being in this “Axis of Arrogance and Greed” who will speak out for something other than their own selfish interests?

    Who is going to stand up and speak out clearly, loudly and often as President Barack Obama is doing?

    Many voices are needed now.

  6. In his speech this morning Dr. Bernanke pointed out that even after what we have been through for last year or so the Federal Reserve does not currently have the means to manage additional institutions which are too big too fail and pose a systemic threat. In my mind this would explain the mysterious gap ups and short squeezes in capital markets as of late which appear to have been engineered to instill confidence in the public allowing institutions to raise capital. With the advent of the internet and quick dissemination of ideas and information I believe that any psychological operations which may have been conducted through slowly leaked media coverage regarding the stress tests and overall state of the economy will in time ultimately be trumped by reality. As your questions point out there appears to be a murky element present. While there has been some chatter regarding a forthcoming Pecora style commision to investigate the causes of the financial crisis I feel that if any such hearings are to be successful then the truth must be told and appointed investigators must be unbiased. Knowing that we are on Earth and that humans are very far from perfect, I am not holding my breath for justice any time soon but rather will be certain to revel in the absurdity of it all. As a consolation perhaps someone will even be so kind as to get a picture of a midget on Henry Paulson’s lap. Even so, at this point in time the damage done to the faith of the populace in politicians and financial institutions could take years to repair even with the presence a major diversionary type event. In summary, some have pointed to a scene from the movie Network in which corporations are alleged to be governers and true democracy does not exist. I would very much like to believe that this is not the case in our world today, particularly with regard to the United States where so many have fled to from oppressive regims. Furthermore, in the bigger picture I have no problem with sustainable living and responsibility towards creditors even if doing so requires a lower standard of living. However, when dishonesty and manipulation are used in order to acheive an agenda the quality of the foundation for such ideas appears questionable at best as does the ability of players to stand the test of time.

  8. We can only surmise that the TRUE reason for this accounting chicanery [FASB relaxing mark-to-market rules] is to obfuscate the true condition of institutions such as Goldman Sachs – which recently, for the first time – was subject to minimal transparency requirements when, as a bank for the first time, they were required to report to the Office of the Comptroller of the Currency [OCC] and their financials were subject to the OCC’s Q4/08 Quarterly Derivatives Reporting:
    Table 4 of the Q4/08 OCC Quarterly Derivatives Report displays the Total Credit Exposure to Capital ratios for U.S. reporting banks and happens to be one of the most telling capital adequacy ratios known to man. If ever there was a failing grade on a “stress test” – HERE IT IS IN SPADES!!! The aforementioned measure of capital adequacy, [1,056.4] in Goldman’s case, is so TOXIC – in fact; one can only wonder if regulators might have required radiation suits and Geiger Counters to safely measure the TOXICITY of Goldman’s books. Goldman’s figures stand out almost 5 times worse than those of Citibank and Bank of America and 11 times those of Wells Fargo.
    Of course, with the discarding of real accounting standards in the United States, the true extent of this toxicity will now conveniently be obfuscated from the general public in further OCC reports,
    “..new mark-to-market accounting guidance will be effective for the second quarter, with early application allowed for the first quarter, and not be retroactive.
    Not retroactive????? “Effective for the second quarter, with early application allowed for the first quarter??????” Who are these CLOWNS trying to kid? From this time forward, this shall no doubt become known as “the Goldman Clause”.
    To call this maneuvering “brutal” is an insult to the true meaning of the word.
    Rob Kirby

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