TheBookkeeper

Bank Nationalization: It's Just Plain Wrong

www.pbs.org/moyers/jou...

Bank Nationalization: It's Just Plain Wrong

ClydeDNA This movie
www.pbs.org/moyers/jou...
is surely designed by the present state of the mind of economists. Money is book-keeping's debit system. A great deal of economic exchange takes place without the assistance of banking at all. Our culture needs to understand how a proper double-entry book-keeping framework works if we are to even begin to understand how money works.

The role portrayed in this film, of banks being exclusive money lenders, is completely misleading. as to what makes a well run culture successful. Yes is true that banks, particularly since book-keeping is being done by bogus book-keeping software, have become corrupt. But to get a handle on how a culture trades it goods and services, you have to look at those goods and services, and not at the money that is so easily corrupted by schemers.

This film is a bad joke on unstudied minds, which includes most of today's economists who believe that economics can be expressed mathematically. It cannot. If one studies book-keeping in the detail that this film attempts to study money, they would find that book-keeping, and the money supply, are in fact grammatical language. There is a subject, predicate, and object involved in every business transaction. The object is a story we live by. That our culture, as story, is so badly corrupted today is the work of liars, not miscalculation. Book-keeping, after all, can be precise without going beyond simple arithmetic. If you want a clear picture of today's best alternative solution view this interview:
www.pbs.org/moyers/jou...

Furthering the Discussion on Bank Nationalization

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system.”

Wouldn't it be nice if Secretary Geithner's words were in fact a.true statement of fact? The fact is that our financial system is being run by dreamers who are guessing "What might we try next," in the way of a solution to 40 years of Ponzi schemers using new-found computer power to accelerate bad ideas into today's crash.

Citigroup, Merrill Lynch, Citadel: Earnings Troubles All Around

You said:
"Tighten, don't loosen, accounting rules for financial institutions,"

Surely you know, sir, that the rules that accounting must follow are the 650 year old double-entry book-keeping framework of rules, no? If banks had been accounting to those rules the nation would not be where it is today.

"making them mark-to-market financial asset portfolios that specifically cannot be held on a long-term basis. Also clarify rules around consolidation of off-balance sheet vehicles,"

There is no legal 'off balance sheet vehicle.' A book-keeper's job is to administer contracts with transparency to all entities that are parties to the contract, and that surely includes stockholders. If a vehicle is placed off the balance sheet then any obligations an entity has to that vehicle's contract belongs on the entity's balance sheet. This is book-keeping 101, which is to identify an entity's boundaries of contractual obligations. aka "rights to ownership."

"forcing all but the most clearly dissociated entities to be recorded as on-balance sheet obligations."

There is no "all but." There is either a contractual obligation or there is not an obligation. All else is fudged books. Banks are failing because they are not doing their bookkeeping. An accountant is not a bookkeeper. Accounting and bookkeeping interests are as different as the baseball pitcher and the umpire who is calling balls and strikes.

Corporate Fraud + Government Intervention = Bailout Nation

A good, unbiased commentary, for sure.
However, the story misses one important point. The 650 year old double entry bookkeeping framework of rules has never made it into software code. Our present monetary system has no control language with which we can reconstruct its misuse. Without a proper framework of rules, that monetary system resembles the national museum in Baghdad in 2003. When no one is there to guard the treasure the attitude becomes, "If we don't steal it someone else will."
Nobody will be convicted for these frauds because reconstruction the history of facts is impossible using today's financial data management systems. A proper bookkeeping is designed to record a reusable history. It's called "the audit trail." With an audit trail we could go back and reconstruct the facts in detail. Had we had that for the past 30 years, the problem, of course, would never have occurred because most of us only break the law when we are quite certain there is no accountable way to get caught.
The problem is worse today than it was yesterday, and it will be worse tomorrow. The pattern of decay will continue until we decide as a citizenry that an accounting audit trail, that had served commercial trade for 620 years, would make a good idea to return to as soon as we possibly can.

Short Sales: SEC Turns Back the Clock to 1931

However you slice it a naked short bet that pays off is somehow collecting counterfeited money. And if the short bet loses money, who gets that profit? The broker? There is no way that such practices could be being posted to a proper double entry bookkeeping framework of rules.