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The devastating Lehman Brothers bankruptcy report

sparky

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Evidence of a Financial Coup in America


this might be the most relevant passage>

What killed Lehman is alive and kicking

The most alarming element of the report may not be what it says about Lehman, but what it reveals about the rottenness and risks that still endanger the financial services industry and the global economy.

Lehman couldn’t have been the only one borrowing from Peter to show Paul that its debts were manageable. According to Gary Gorton, a professor at Yale School of Management, $12 trillion in loans was circulating in the repo market on any given day before the financial crisis.

From 2001, no American accounting firm or legal practice would certify Lehman’s quarterly reports so long as they relied so heavily on the repo market, but auditors in London welcomed their business. This unevenness in accounting standards still provides incentive for banks to seek the weakest regulatory link.

There remains little oversight of repurchase markets, whether in the US, Europe or elsewhere. What’s worse, the spirit of co-operation that emerged at the height of the financial crisis is unravelling. On developing uniform regulations for executive compensation, derivatives markets and hedge funds, the EU and the United States are farther apart than at any time since Lehman collapsed. [read more]


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sparky

sparky

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Goldman Sachs derivative liability = 33,823% of assets The Bankwatch

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The part that awed me, is that BofA and Citi now have more derivative exposure than they did in 2007! Huh! What is Timothy Geithner being paid for? I have to admit after TARP and the apparent hands on approach I like most assumed things were being fixed, but apparently not.

This simply adds to the point that despite all the histrionics and efforts in Washington, nothing has been learned and the American Banking system is now at least at as much risk now as in 2007, pre crash.


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georgephillip

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Joseph Stiglitz on March 6, 2009:

"If we had used the $700 billion (TARP) to create a new financial institution, allowed it to lever 10 to1, which is very modest compared to the 30 to 1 we were doing, 10 to 1 would have generated $7 trillion of new lending capacity, far in excess of what our country needs.

"So the issue here is not about lending.

"It's really about saving the bankers.

"And what we confused was saving the banks versus saving the bankers and their shareholders."

If nationalizing the Federal Reserve sounds too revolutionary or scary, consider state-level public banking concepts gaining ground and attracting proponents across the political spectrum.

The issue transcends party lines. In North Dakota, a Republican state, the state-owned bank was inauguarated in 1919 by a political party called the "Non-Partisan League."

See: Ellen Browns Web of Debt Blog>Campaigning For State-Owned Banks (02/17/2010)
 

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