Hudson on Financial Fraud Inquiry

[don]

(Michael Hudson.com)

[vinoveri]

Re: Hudson on Financial Fraud Inquiry

I've yet to see Hudson this "livid" (looks almost as angry as I feel sometimes).

I dread this is not a good sign. God bless us, everyone.

[oddlots]

Re: Hudson on Financial Fraud Inquiry

M'lord,

I submit the British equivalent as a somewhat more honest appraisal:

http://www.nakedcapitalism.com/2011/...-to-shame.html

Quite: The many inquiries into the financial crisis have turned over plenty of stones but have failed to find any smoking guns. But the House of Lords economic affairs committee’s inquiry “Auditors: market concentration and their role” is making strides in identifying and maybe rooting out the accounting shenanigans that lay at the heart of the crisis.

Still, don't see anyone going to jail.

[c1ue]

Re: Hudson on Financial Fraud Inquiry

There is a very key point Dr. Hudson makes:

Not only has no one gone to jail, the government is preventing private citizens from suing TBTF banks and banksters by allowing settlements where no guilt is admitted.

This is true complicity in criminal behavior.

[jtabeb]

Re: Hudson on Financial Fraud Inquiry

It's the price you pay to keep the Dollar/IMF global standard in place. Otherwise, poof. Right? (If all the actual fraud and criminal activity were to see the light of day, by-by dollar as world reserve currency, No?)

P.S. NOT AGREEING with the policy, just trying to identify one reason why it makes sense to do it from a TPTB perspective.

[c1ue]

Re: Hudson on Financial Fraud Inquiry

It's the price you pay to keep the Dollar IMF global standard in place. Otherwise, poof. Right? (If all the actual fraud and criminal activity were to see the light of day, by-by dollar as world reserve currency, No?)

This might be true, but of course depends on just how much more 'hidden' toxic waste is left.

From my view, the rest of the world doesn't WANT (for the most part) for the US dollar to lose reserve status.

However, the US' actions are forcing the issue.

But more importantly I don't think the banksters give a crap. So long as they get gigantic sums of money - whatever the denomination - why worry about things like the welfare of the country that enables them? Or the people around them?

The interest rate game is a perfect example: for banksters (and I know a significant number of junior bankster types), the concept of interest rate arbitrage is magic. Borrow at 3% and get paid 7%? Slam dunk! Don't care about exchange rates, capital flows, FDI, whatever.

4 percent 'riskless' gain with OPM (other people's money) is all that matters.

Of course these days it is borrow at 0.25% and get paid 3%, and no worries even about exchange rates.

[oddlots]

Re: Hudson on Financial Fraud Inquiry

Has this been posted before?

http://neweconomicperspectives.blogs...of-crisis.html

"The Financial Crisis Inquiry Commission (FCIC) issued its report today on the causes of the crisis. The Commissioners were chosen along partisan lines and the Republicans, one-upping the Republicans' dual responses to President Obama's State of the Union address, have issued three rebuttals. The rebuttals follow a failed preemptive effort by the Republicans to censor the report – they insisted on banning the use of the terms "shadow banking system" (the virtually unregulated financial sector that conducts most financial transactions), "Wall Street," and "deregulation." The Republicans then issued their first rebuttal last month, their "primer."

I love that: if you can't use the terms "gun," "threats" and "getaway car" it's pretty damned hard to describe a bank robbery.

[bill]

Re: Hudson on Financial Fraud Inquiry

But more importantly I don't think the banksters give a crap.

Agreed, and on to the next deals.
Look no further than who is on International Advisory Committee over at the NYFED.
http://www.newyorkfed.org/aboutthefe...rnational.html

[lektrode]

Re: Hudson on Financial Fraud Inquiry

....

I love that: if you can't use the terms "gun," "threats" and "getaway car" it's pretty damned hard to describe a bank robbery.

must say that reading for 5 mins worth of a 1/2 dozen posts from you guys is the equivalant of all day's worth of C/nn/nbc to succinctly summarize the events as they unfold!

[lektrode]

Re: Hudson on Financial Fraud Inquiry

There is a very key point Dr. Hudson makes:

Not only has no one gone to jail, the government is preventing private citizens from suing TBTF banks and banksters by allowing settlements where no guilt is admitted.

This is true complicity in criminal behavior.

whats truly amazing is that its all so OUT IN THE OPEN FOR FULL VIEWING and when even relative (ok... full-on) neophytes like me 'get it' WHY IN HELL DOESNT ANYBODY IN DC attack this BS?!

continuing.... http://www.nakedcapitalism.com/2011/...-to-shame.html

"...IFRS is pro-cyclical is that it allows mispriced credit to go unchecked. It enables banks to price risky loans as if they were safe loans. While the pro-cyclicality of IFRS has been widely recognised, experts say the problem was exaggerated in the UK as a result of the way it was implemented. Richards added:

IFRS [as applied in the UK] is extremely pro-cyclical. It facilitated and exacerbated the credit bubble and then brought it home to roost in the crash and crisis. [In bank financial statements] there were valuations that frankly [were not] rigorously carried out on some instruments where reliance on netting off against credit default swaps was fictional given that the CDS market, which hit US$66 trillion at its peak, was 80% naked and the counterparties could never meet their exposures. Reliance on an instrument like that to support a toxic instrument that you are carrying on your balance sheet is imprudent — but it’s acceptable and allowed under the standards.

In a letter to the Times dated 27 July 2010, a group of academics and accountancy experts said “In its commencement phase, the ‘fair weather’ model significantly overstated bank profits, resulting in excessive dividends. It also obscured true gearing and capital destructive business models. In “storm” mode it accelerated and exaggerated losses, resulting in taxpayer-funded recapitalizations.”
Aviva’s Richards added:

The double-digit billions pumped into the banks went to plug the gap created by both bonus distribution and dividend distributions that were made just preceding the crisis.
......"

allowing AIG/GS/JPM/BS/MS to all report BIG BANG results leading up to oct07's pop (while the back office guys at all of the above were shorting the hell out of what they in the front were selling as 'cant miss bets') and the hedgies were floating their IPO's ???

if what milken did was 'illegal' why isnt any of this?

[don]

Re: Hudson on Financial Fraud Inquiry

Has this been posted before?

http://neweconomicperspectives.blogs...of-crisis.html

"The Financial Crisis Inquiry Commission (FCIC) issued its report today on the causes of the crisis. The Commissioners were chosen along partisan lines and the Republicans, one-upping the Republicans' dual responses to President Obama's State of the Union address, have issued three rebuttals. The rebuttals follow a failed preemptive effort by the Republicans to censor the report – they insisted on banning the use of the terms "shadow banking system" (the virtually unregulated financial sector that conducts most financial transactions), "Wall Street," and "deregulation." The Republicans then issued their first rebuttal last month, their "primer."

I love that: if you can't use the terms "gun," "threats" and "getaway car" it's pretty damned hard to describe a bank robbery.

Betcha they don't use FIRE either

No ... don't say that word ... I don't like it....

[cjppjc]

Re: Hudson on Financial Fraud Inquiry

[/INDENT]In a letter to the Times dated 27 July 2010, a group of academics and accountancy experts said “In its commencement phase, the ‘fair weather’ model significantly overstated bank profits, resulting in excessive dividends. It also obscured true gearing and capital destructive business models.

Thank you for that quote. That's the second reference to capital destruction I've heard.