Although the focus for this blog is the business of the Big 4, it's hard to ignore what's going on with the financial firms, the Fed, and the political environment.  I've been writing this blog for almost two years now, so I feel these past few days are a validation of what I've been saying all along about firms like AIG (AIG), Lehman (LEH), Fannie Mae and Freddie Mac, Merrill Lynch (MER), Goldman Sachs (GS) and Morgan Stanley (MS).

There have been a lot of false starts, last minute deals, and disappointments during the last few days. In many cases, the only mention of the Big 4 is related to their role in the bankruptcy proceedings. They may be involved in supporting the analysis that is taking place. They may be involved in helping develop the numbers for the potential acquirers. But they are most definitely involved in the problems that have caused so many of these firms since Bear Stearns to end up in a "crisis" mode.

Arthur Levitt recently gave an interview in a Dutch publication de Accountant. Accountancy Age in the UK highlights some key quotes and provides a link to the full article in English.  

Levitt comments about the potential need for "audit-only" firms and his encouragement of, "...greater transparency, to understand what condition a firm is in. We need the firms to provide fully documented audits of their own operation... "

I've written about the rating agencies and their conflicts and complicity in the credit crisis. 

There was an interesting article today in a publication that I receive online called Hedgeworld (registration required, with special benefits for membership).

Short sellers are certainly on the mind of the business executive on the other side of their acumen. (My bias is showing, I know.) And the SEC has parachuted in to help their beloved business executives by promising to vigorously enforce the rules against naked, obnoxious, smelly shorts. Even I don't like to picture one of those guys coming after me...

Hmmmmm

Maybe I should have copyrighted the term "dupe" when it comes to playing dumb to get off the hook in these accounting fraud cases. Looks like Citicorp's (C) lawyers see a winner, too, in the strategy Mr. Attanasio used to get Mr. Stulac of Arthur Andersen off the hook in the Peregrine case.

I give you the two blurbs below by way of introduction to the latest trading "scandal." Many, many articles are comparing SocGen (SCGLY.PK) and MF Global (MF), calling both traders "rogue" and questioning why, why, given the lax controls which seem to be the norm, this kind of situation has not occurred more often.

From Bloomberg: