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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Mon Mar 15, 2010 7:50 pm Post subject: Blogs Beat the Press on the Lehman Brothers Scandal |
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What the hell?
http://www.cjr.org/the_audit/blogs_beat_the_press_on_lehman.php?page=all
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And just like that the Lehman Brothers scandal drops off the front pages. And not just the front pages�the section fronts, too.
Say, we just learned about a $50 billion fraud on Thursday. Think there might be some newsworthy follow-ups here? Actually there are, and both The New York Times and Wall Street Journal have them, but they stuff them inside.
The Journal, which scored recently by bringing David Reilly back into the fold after a stint at Bloomberg, posts a Reilly news article looking at the culpability of Lehman auditor Ernst & Young. The paper dumps it on C7. The NYT has on the same angle�a very good one to examine closely�and slides it inside on B2.
Somehow the Times thought more people would care about Sorkin�s scoop on a $3 billion deal for Tommy Hilfiger or that it was more important than an auditor approving accounting fraud. They don�t and it�s not.
Look, I know that Lehman collapsed a year and a half ago, but this is a major story�one that finally gets awfully close to putting the crimes in the crisis. I�ll go ahead and say it: If you�ve wanted to know about the Valukas report and its implications, you�ve been better served by reading Zero Hedge and Naked Capitalism than you have The Wall Street Journal or New York Times. This on the biggest financial news story of the week�and one of the biggest of the year. These papers have hundreds of journalists at their disposal. The blogs have one non-professional writer and a handful of sometime non-pro-journalist contributors.
I�m hardly the only one who has noticed this. James Kwak of Baseline Scenario wrote this earlier today:
Overall, I�m surprised by how little interest the report has gotten in the media, given its depth and the surprising nature of some of its findings.
So, hi, MSM folks. Here are some bloggers� Lehman ideas for you to borrow. But please, for once, give them credit:
...
But the non-MSM blogs have led on this story.
It�s early yet, but that�s the rub with the stuffed stories today. If Lehman is slipping off the radar screen already, it seems unlikely we�ll see the full follow-through we need. |
I understand why the NYT, being Obama's other press secretary, has downplayed this story (Timmy looks very, very bad) but the WSJ too? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Mar 16, 2010 7:26 am Post subject: |
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CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Tue Mar 16, 2010 8:04 am Post subject: |
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| Also, in the case of the NYT, Sorkin is their bigshot business reporter who recently came out with a book on the financial crisis. A lot of the book covers Paulson, Tim G., etc. Maybe both Sorkin and the NYT don't want to burn any bridges. But yeah, WSJ, no clue on that one. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Tue Mar 16, 2010 8:11 am Post subject: |
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BTW Mises, you might want to read this book excerpt in Vanity Fair this week about the first dude who bought CDS for subprime mortgage bonds.
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The market made no sense, but that didn�t stop other Wall Street firms from jumping into it, in part because Mike Burry was pestering them. For weeks he hounded Bank of America until they agreed to sell him $5 million in credit-default swaps. Twenty minutes after they sent their e-mail confirming the trade, they received another back from Burry: �So can we do another?� In a few weeks Mike Burry bought several hundred million dollars in credit-default swaps from half a dozen banks, in chunks of $5 million. None of the sellers appeared to care very much which bonds they were insuring. He found one mortgage pool that was 100 percent floating-rate negative-amortizing mortgages�where the borrowers could choose the option of not paying any interest at all and simply accumulate a bigger and bigger debt until, presumably, they defaulted on it. Goldman Sachs not only sold him insurance on the pool but sent him a little note congratulating him on being the first person, on Wall Street or off, ever to buy insurance on that particular item. �I�m educating the experts here,� Burry crowed in an e-mail. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Tue Mar 16, 2010 8:33 am Post subject: |
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| mises wrote: |
CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
And then some people get upset when I don't cite mainstream sources for my information.  |
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Rum Jungle
Joined: 18 Nov 2005
Location: North Asia
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| Posted: Tue Mar 16, 2010 9:12 am Post subject: |
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Arthur Anderson, a coequal firm of Ernst @ Young was sent to the wall for accounting fraud, with Enron. "We're going to strap you to the mast" as a congressman told the hapless CEO of Anderson.
Looking forward to seeing the same congressional response!
But are accountants really into fraud? I doubt it. Or are corporate accountants just incompentents?
Unless it's a beat-up news story, Ernst@ Young has a lot of explaining to do considering the size of the corporate collapses (Enron..huge at the time), (Lehman Brothers, cataclysmic). |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Mar 16, 2010 12:23 pm Post subject: |
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| bucheon bum wrote: |
BTW Mises, you might want to read this book excerpt in Vanity Fair this week about the first dude who bought CDS for subprime mortgage bonds.
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The market made no sense, but that didn�t stop other Wall Street firms from jumping into it, in part because Mike Burry was pestering them. For weeks he hounded Bank of America until they agreed to sell him $5 million in credit-default swaps. Twenty minutes after they sent their e-mail confirming the trade, they received another back from Burry: �So can we do another?� In a few weeks Mike Burry bought several hundred million dollars in credit-default swaps from half a dozen banks, in chunks of $5 million. None of the sellers appeared to care very much which bonds they were insuring. He found one mortgage pool that was 100 percent floating-rate negative-amortizing mortgages�where the borrowers could choose the option of not paying any interest at all and simply accumulate a bigger and bigger debt until, presumably, they defaulted on it. Goldman Sachs not only sold him insurance on the pool but sent him a little note congratulating him on being the first person, on Wall Street or off, ever to buy insurance on that particular item. �I�m educating the experts here,� Burry crowed in an e-mail. |
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That was a great read. Thanks. I'm gonna pick up the book immediately. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Mar 16, 2010 12:37 pm Post subject: |
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| Rum Jungle wrote: |
Arthur Anderson, a coequal firm of Ernst @ Young was sent to the wall for accounting fraud, with Enron. "We're going to strap you to the mast" as a congressman told the hapless CEO of Anderson.
Looking forward to seeing the same congressional response!
But are accountants really into fraud? I doubt it. Or are corporate accountants just incompentents?
Unless it's a beat-up news story, Ernst@ Young has a lot of explaining to do considering the size of the corporate collapses (Enron..huge at the time), (Lehman Brothers, cataclysmic). |
Yes. The auditors are complicit in fraud. The audit report is not useful for the end-users of financial statements (as we have learned time and time again). Ernst is potentially facing collapse (unless deemed Too Big To Fail by hope and change) as a result of existing and looming litigation. PWC is also at risk of collapse for the same reasons (including some very dirty stuff in India). Paul Volcker has been raising alarms about this for more than a year.
Some readings about the "big 4":
http://www.jamesrpeterson.com/home/independence/
http://www.cfo.com/blogs/index.cfm/l_detail/14452396
http://www.huffingtonpost.com/francine-mckenna/the-button-down-mafia-how_b_174496.html |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Mar 18, 2010 6:37 pm Post subject: |
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These guys just get more and more dirty.
http://www.nakedcapitalism.com/2010/03/sec-fed-alerted-by-merrill-of-lehman-balance-sheet-games-in-march-2008.html
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SEC, Fed Alerted By Merrill of Lehman Balance Sheet Games in March 2008
Merrill warned both the SEC and the Fed in March 2008 that Lehman was engaging in balance sheet window dressing of a serious enough nature for it to put pressure on Merrill (as in it was making Merrill look worse relative to the obviously impaired Lehman).
When a company under stress makes fraudulent statements about its financial condition, it is a sign of desperation, and possibly imminent collapse. The fact that Merrill, with a little digging, could see that Lehman�s assertions about its financial health were bogus says other firms were likely to figure it out sooner rather than later. That in turn meant that the Lehman was extremely vulnerable to a run. Bear was brought down in a mere ten days. Having just been through the Bear implosion, the warning should have put the authorities in emergency preparedness overdrive. Instead, they went into �Mission Accomplished� mode.
This Financial Times story provides yet more confirmation that Geithner is not fit to serve as a regulator and should resign as Treasury Secretary. But it may take Congress forcing a release of the Lehman-related e-mails and other correspondence by the New York Fed to bring about that outcome. |
Wait wait! It gets worse!
http://www.zerohedge.com/article/new-merrill-lynch-disclosure-shines-new-and-perjurious-light-ben-bernankes-sworn-testimony
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It seems it was just yesterday that Bernanke was on the edge of committing perjury and lying that the Federal Reserve of New York knew nothing about Lehman's "more peculiar" off balance sheet transactions. Oh wait, it was: as a reminder in his cross by Scott Garrett, the New Jersey representative asked the Fed Head whether the "Fed was aware of the Repo 105 and the accounting irregularities going on?" Bernanke answers "No - they were hidden." Oops. Because a story just released by the Financial Times seems to indicate otherwise, and unless Merrill Lynch is lying out of their derriere, Mr. Bernanke should be immediately investigated for potential perjury before the American people.
"Securities and Exchange Commission and Federal Reserve officials were warned by [Merrill Lynch] that Lehman Brothers was incorrectly calculating a key measure of its financial health months before its collapse in 2008...In the account given by the Merrill officials, the SEC, the lead regulator, and the New York Federal Reserve were given warnings about Lehman�s balance sheet calculations as far back as March 2008." Amusingly, the sole purpose why Merrill would rat out Lehman is to make its own disastrous situation more agreeable, as often happens when the rats realize the sinking of the ship is inevitable. Well, unlike Merrill, whose liquidity situation was equally as disastrous on the weekend of September 14th, which found a pressed suitor in the form of BofA (and its Fed/Goldman-puppet CEO Ken Lewis), Lehman was not quite so lucky (one wonders why). Yet the bigger issue is why does the Fed keep on lying to the American public without any trace of consequence?
When will someone finally wake up and sue the Federal Reserve (and we don't mean FOIA), or at least slap a racketeering lawsuit on "those people?" Oh yeah, the market is up, American Idol is on TV, G-Pap has done all that was needed to (not) be bailed out, so all shall be well. This is better known as "if the other Ponzi dude was thrown in jail, you must acquit" defense. |
The lack of accountability is really amazing. I am also impressed at how these issues have been kept out of the public debate. I guess the health insurance bailout takes priority. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Mar 26, 2010 8:07 am Post subject: |
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| mises wrote: |
CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
MSNBC just interrupted a Russian-American press conference about a nuclear arms deal with a story about an arrest relating to the murder of a Florida toddler.
Then said "back to that other big story we're following..." (nukes). |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Mar 26, 2010 9:00 am Post subject: |
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| mises wrote: |
| mises wrote: |
CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
MSNBC just interrupted a Russian-American press conference about a nuclear arms deal with a story about an arrest relating to the murder of a Florida toddler.
Then said "back to that other big story we're following..." (nukes). |
Who runs these "news" organizations?? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Apr 09, 2010 7:00 am Post subject: |
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Most Wall Street Banks Using Lehman Style Accounting Trickery Enabled by the Fed
This analysis from the Wall Street Journal indicates that most of the big US Banks are engaging in the same kind of repo accounting at the end of the quarter that Lehman Brothers was doing, until their deteriorating credit profile and liquidity made them collapse.
The basic exercise is to hold big leverage and dodgy debt, but swap it off your books with the Fed at the end of each quarter for a short period of time when you have to report your holdings.
This could easily be corrected by requiring banks to report four week averages of their holdings for example, rather than a snapshot when they can hide their true risk profiles so easily, compliments of that protector of consumers and investors, the Fed.
This is nothing new to us. Many of us have noted this sort of accounting trickery and market manipulation at key events especially at end of quarter.
It is facilitated by the Federal Reserve, and FASB.
The US is Lehman Brothers on a scale writ large. And when it is exposed by some series of events, the implosion could be more sudden than any can imagine. But in the meantime the US is still the 'superpower' of the world's financial system, through its currency, its banks, and its ratings agencies. |
http://jessescrossroadscafe.blogspot.com/2010/04/most-wall-street-banks-using-lehaman.html
Bah. |
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No_hite_pls
Joined: 05 Mar 2007
Location: Don't hate me because I'm right
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| Posted: Fri Apr 09, 2010 4:26 pm Post subject: |
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| mises wrote: |
CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
lol |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri Apr 09, 2010 6:38 pm Post subject: |
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| mises wrote: |
| mises wrote: |
CNBC just abruptly interrupted their discussion of today's Fed rate decision with "breaking news":
"Tiger Woods returning to golf at the masters".
Last week (Thursday I think) on MSNBC Andrea Mitchell (Alan Greenspan's wife - I wonder why she uses her maiden name?) held a very interesting discussion on Obama's dog, followed by a really interesting story about some NFL guy who may or may not get married. |
MSNBC just interrupted a Russian-American press conference about a nuclear arms deal with a story about an arrest relating to the murder of a Florida toddler.
Then said "back to that other big story we're following..." (nukes). |
The problem is, a lot of people probably really do consider things like Tiger Woods and toddler murderers to be bigger, more interesting news stories than the Federal Reserve and nuclear treaties. In the end, these are for-profit businesses; if more people care about Tiger than about the Fed, Tiger wins, regardless of which really has more impact on our lives. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Apr 09, 2010 8:40 pm Post subject: |
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| Fox wrote: |
The problem is, a lot of people probably really do consider things like Tiger Woods and toddler murderers to be bigger, more interesting news stories than the Federal Reserve and nuclear treaties. |
You're absolutely right. I suppose I'm an elitist? Screw the proles and their whims. |
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