Nomi Prins, a former investment banker at Goldman Sachs...

[HCE SuiGeneris]

Worse Than Enron?

Wall Street’s big banks are playing dangerous new accounting games—and this time taxpayers are on the hook for hundreds of billions. Nomi Prins uncovers a scandal in the making.

by Nomi Prins

Thanks to Joanne98 for originally posting this in Editorialshttp://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x499674


snip>>> After two weeks sifting through over one thousand pages of SEC filings for the largest banks, I have the same concerns. While Washington ponders what to do, or not do, about reforming Wall Street, the nation's biggest banks, plumped up on government capital and risk-infused trading profits, have been moving stuff around their balance sheets like a multi-billion dollar musical chairs game.

I was trying to answer the simple question that you'd think regulators should want to know: how much of each bank's revenue is derived from trading (taking risk) vs. other businesses? And how can you compare it across the industry-so you can contain all that systemic risk? Only, there's no uniformity across books. And, given the complexity of these mega-merged firms, those questions aren't easy to answer.

Goldman Sachs and Morgan Stanley, for example, altered their year-end reporting dates, orphaning the month of December, thus making comparison to past quarterly statements more difficult. In the cases of Bank of America, Citigroup and Wells Fargo, the preferred tactic is re-classification and opaqueness. These moves make it virtually impossible to get an accurate, or consistent picture of banks ‘real money' (from commercial or customer services) vs. their ‘play money' (used for trading purposes, and most risky to the overall financial system, particularly since much of the required trading capital was federally subsidized).

Trading profitability, albeit inconsistent and volatile, is the quickest way back to the illusion of financial health, as these banks continue to take hits from their consumer-oriented businesses. But, appearance doesn't equal stability, or necessarily, reality. Here's how BofA, Citi and Wells Fargo play the game:

more>>> http://www.thedailybeast.com/blogs-and-stories/2009-12-01/worse-than-enron/full/

This needs full attention from everyone that has any interaction at all with these criminal enterprises.

[slipslidingaway]

1. knr nt

[OHdem10]

2. Activists should really move to push bringing back Glass-Steadgall

or find some regulations which require the separation of
Commercial Banks from Investment Banks.

Let Wall Street use their own money for their severe Gambling
habit--if they take their Investment
Bank the cliff so be it.

Keeping them separate means our money is safe in the Commercial Banks.

Repeal of Glass-Steagall contributed to the Meltdown because they
could use ordinary Americans Money to cover their gambling.

SEPARATE COMMERCIAL BANKS and INVESTMENT BANKS.

[HCE SuiGeneris]

3. Agreed. The repeal of Glass-Steagall was the catalyst to

re-writing the rules of the game. Now, not only do they engage in degenerate gambling with what used to be secured money, they are tossing any semblance of codified accounting into the dumpster.

We are truly f'd if this continues. These gangsters have no moral compunctions inflicting them.

[slipslidingaway]

4. kick nt