Want to see Blankfein’s head on a metaphorical pike? Want accountability? Justice?
It’s called “mark-to-market” accounting.
Listen to Ilargi:
It’s perfectly defensible for a government to lend money to a bank in trouble that is important to its economy, in order to try and save. However, it borders on criminal negligence, if it isn’t outright criminal behavior, to lend that money without being perfectly aware of what assets that bank holds.
A bank could have 100 times more debt than it receives in bail-out money. But we wouldn’t know about that today, we’re not allowed to know. Both the US (FASB 157) and the European Union (IFRS 9) have accounting (non-)principles in place that say it’s perfectly alright for a financial institution to hold assets in its books at 100 cents on the dollar that have a market value of 70% of that, or 50%, or even 5%. It has therefore no obligation to reveal even to its shareholders what its true financial situation is.
Fraudulent accounting is why banks pass stress tests with flying colors then implode weeks later. We’re dumping money into black holes. If the banks want to take our money, they have to mark all their assets to market value. Mark-to-fantasy accounting is, as Ilargi says, “criminal.” And a total waste of taxpayer funded bailout money, a never-ending money pit.
Mark-to-market is instant karma.
…a bank should never ever be allowed to sit on its debt and mark it to fantasy and then also receive funding from our governments, whether in bail-outs, hand-outs, loans, special facilities’ windows at our central banks, or any other sort of funding, nothing of the kind.
We need to tell our politicians that they can no longer give even one single penny of ours to any institution that hasn’t marked all of its assets to market. No exceptions.
Let the sun shine on these blood-sucking freaks. It couldn’t happen to nicer people.