Bernanke and Geithner stopped the market from falling in
March 2009 by threatening the accounting geeks at the FASB and forcing them to
allow fraudulent reporting by the insolvent Wall Street banks. The crisis ended
– precisely – on March 16, 2009, when the Financial Accounting Standards Board
abandoned FAS 157 “mark-to-market”
accounting, in response to Congressional pressure from the
House Committee on Financial Services and threats from Bernanke and Geithner on
March 12, 2009. That change immediately removed the threat of widespread
insolvency by making insolvency opaque. Mark to fantasy was born. Profits for
everyone!!!
The fix was in. Every Wall Street bank was insolvent in
March 2009. Citicorp and Bank of America were dead. There were hundreds of billions
in worthless toxic mortgage securities, derivatives, auto loans, and credit
card debt sitting on their books. FAS 157 required them to price those assets
at what they could sell them for in the market. You remember free market
capitalism? Something is worth
whatever an independent party is willing to pay. The fat
cats love free market capitalism when they are making billions. Not so much
when they blow up the financial system and are faced with the consequences of
THEIR actions.
The Wall Street banks were leveraged 30 to 1. Therefore, a
4% loss on their portfolio meant they were bankrupt. They were all bankrupt,
and should have been liquidated in bankruptcy. That is why we have bankruptcy
laws. But here’s the rub. Jamie Dimon, Lloyd Blankfein, the other Wall Street
executives, billionaire investors, and many other very rich men would have
borne the losses. That was unacceptable to the ruling oligarchs. They told
their puppets – Bernanke & Geithner – to pressure the FASB into changing
the accounting rule, so they could value their assets at whatever number they
chose. The puppets did as they were told and the cowering mangy curs at the
FASB
reversed course. All of a sudden, the Wall Street banks were
miraculously solvent, making billions, paying themselves massive bonuses,
rigging the markets, and enjoying the fruits of 0% interest money from Bennie
and the inkjets. Ignore the blather you will see and hear about the saving
the world bullshit. It was the ‘feckless’ accountants at the
FASB that “saved the bankers”. The people ‘paid the price’.
And after six years, if you applied mark to market
accounting again, the Too Big To Trust Wall Street banks would still be
insolvent. In addition, the Federal Reserve bought trillions in toxic assets
that sit on their balance sheet. They are currently leveraged 60 to 1. A 2% loss
on their $4 trillion portfolio would make them insolvent.
Can you spell PONZI? Remember to thank a Democrat!
Happy 6th Birthday: The Day FASB Folded &
"Mark-To-Fantasy" Was Born | Zero Hedge
The captured corporate MSM is celebrating the six year anniversary of when
the stock market bottomed in March 2009. They will spin a false narrative of
Bernanke, Obama and Geithner saving the world with TARP, QE, and the $800
billion Porkulus bill. What great heroes. Bernanke now gets
$300,000 for a lunchtime speech at Bank of America gatherings. He is raking in
north of $10 million per year now. He made $200,000 per year as the Fed
Chairman. His wisdom must be on par with Jesus Christ to get $300,000 for a one
hour speech. Bernanke’s Sermon on the Mount tour: The millions he is getting
paid by the Wall Street banks for speeches isn’t a payoff. Right?
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