axelrod608

Wall Street Breakfast: Must-Know News

>> "A Goldman spokesman called the risks a "moot point." " >>

Which is to say that since Goldman is all powerful in Washington DC as well as Wall St, NO negative consequences will come to Goldman.

The sheer arrogance of this company is monumental. They were one of the key players in the stupidity that resulted in the financial crash in which $Trillions of wealth were vaporized, yet they lose nothing and the stupid government and Fed that they have bought will NOT hold them accountable AND will give them $Billions in interest-free taxpayer money.

Folks, ignore the controversy about corruption in Afghanistan. Corruption is alive and well right here in the USA. Our CON gress is bought and paid for. Puppets of the corporate oligarchy.

Wall Street Breakfast: Must-Know News

A number of the items on the breakfast menu and comments bring up an observation. We have all heard the "too big to fail" argument.

While working as an accounting manager at a branch of one of the nation's biggest companies I discovered the "too big to audit" concept. Corporate HQ hid all sorts of irregularities in their labyrinth of ledgers, all with the rationalization that nobody would ever catch it.

We have GM - which has received $Billions in bailouts - being probed for accounting capers, Thain sacked for misleading financial info, and a neverending litany of "discoveries" made by buyers of failing companies once they have time to examine their books.

Let's face it, the size and complexity of megacorporate books make it easy to hide all manner of nasty surprises. Add to that their level 2 and 3 assets held off the books, and you have a recipe for a Pandora's box.

Thoreau makes points re KPMG, yet the question remains - are those records auditable ? Heck, are the records they're given even the REAL books ? Both questions are pertinent today.

One reason for putting failing businesses thru bankruptcy is the requirement that records be scoured by forensic accountants to see what skeletons are buried in the books.

Accounting and auditing need to keep pace with the trend toward megacompanies. We see clearly now what happens when they don't.

Wall Street Breakfast: Must-Know News

Yes, very informative today. Best snapshot in the biz.

The Feds better do more than talk about the CDS mess. If derivatives are to be "insured" it should be with real insurance backed by real money.

Also, it is insane for the government to be pouring money into companies with who knows how much off-the-books assets/liabilities. Absolute transparency should be a requirement for federal assistance. It's just a sound business practice.

Then again, when has government ever followed sound business practices ??

Wall Street Breakfast: Must-Know News

Newsflash - the Fed said today it will start buying "commercial paper" - loans with NO collateral. The beginning of the end of the dollar. These people wouldn't get to $1,000 on "Are you smarter than a fifth grader".

Wall Street Breakfast: Must-Know News

SF points out that 2/3 of the US economy is consumer spending. And much of that 2/3 is DEBT spending, not from income. If you realistically think of debt as pre-spent income, one needs to have a debt returement plan to keep even. Alas many ( most ?) Americans don't.

Not only do they not have savings to use to deal with economic problems, they also have debt levels that they cannot reduce at current income. We have become an "upside-down" society. And the folks who think that reinflating the credit bubble wil bring the economy back again don't realize that the economy was dysfunctional.

You could pump any anount of new potential credit into the system and who's going to use it ? The already overextended ?

You want the credit markets to come back the way they were ? Be careful what you wish for, You might get it. And regret it.

Wall Street Breakfast: Must-Know News

The premise behind the Fed pumping all this money into the banks is just plain silly. The recipient banks are using it to take the place of their losses, not to spur new "investment". And they're not lending it to other banks for one simple reason - they know full well that other banks are still holding massive amounts of toxic paper and are, essentially, insolvent. They'd be nuts to lend to a company that may not be able to pay them back - which is how we got here in the first place.

The underlying problem is that financial institutions that are allowed to carry off-the-books assets/liabilities cannot prove their solvency. So what in the world difference is it going to make pumping a bunch of money into financial institutions that are about as transparent as a brick wall ? Nobody in their right mind is going to lend to them.

And no investor using his/her own money is going to buy the stock. Sure, the hedge funds will, but their managers get paid and bonuses whether they make or lose money.

Pumping Fed funds into opaque financials is dumb. I guess that's why the government is doing it.