Clever Accounting Tricks (GAAP) Hides BIG Banks' Real Leverage Risks

America’s biggest banks aren't ready for next meltdown

When Audited  Leverage And Risks Are Hidden IN GAAP

WASHINGTON  — The main financial risk facing the United States today looks very similar to what caused so much trouble in 2007-2008: big banks with too much debt and too little equity capital on their balance sheets. Uneven global regulations, not to mention regulators who fall asleep at the wheel, compound this structural vulnerability.

We already saw this movie, and it ended badly. Next time could be an even worse horror show.

All booms are different, but every major financial crisis has at its heart the same issue: major banks get into trouble and teeter on the brink of collapse. Disruption at the core of any banking system leads to tight credit, with major negative effects on the real economy. In our modern world, in which finance is interwoven throughout the economy, the consequences can be particularly severe — as we saw in 2008 and 2009. Read More.

REMEMBER 2005!

Famous Accounting Frauds - Evaporating Wealth In Virtual Moments

INVESTORS' INSIGHTS  - "Today's Edge" 

Lets face it, since inception the purpose of Banks was to create liquidity in the economy through leverage of its own balance sheet. The premise for this excessive leverage was the collateral they held on the credits provided to others. But the sensibilities of this premise falls apart when credits are unsecured and leverage ratios climb to new heights by paying corrupt audit firms to create costume accounting practises. In the simple  vernacular - lies.  

Today, as a result, the leverage in the system could be as low as 35:1 or beyond 200:1. The point being, nobody truly knows - and consequently, the street's  sense is that the financial  mathematics is now so shaky that even a slight upward rise in rates will wipe out a substantive portion of the Banks' asset and equity values - leading to a complete systemic collapse. Enron's  chart above for instance is a foreshadowing test case for the whole system that we now have in place. Not a pretty picture.

That's  why everyone  is so worried. That's why CPI needs to be manipulated. That's why the US dollar could lose its reserve  currency status. That's why no one dare raise rates by the slightest percentage. 

That's why one day all the corruption, markets and economies are mathematically boxed into an algebra articulating  the certainty of "The Mother Of All Crashes",

" One day!"

International Offices

April 30, 2015

Bankers Gone Wild! - #Ireland 's Ghost Homes!

Ghost Estates of Ireland: Symbols of an Economic Collapse

 

 

 

 

 

Article by Steph,

Built with visions of suburban prosperity in more optimistic times, the empty shells of former dream homes dot the countryside among piles of construction rubble and fallen-down fences. Economic highs and lows have led to abandonments of entire villages all over the world, from China to the Mediterranean, but Ireland is among the nations that was particularly hard-hit.

 

 

Photographer Valérie Anex captures Ireland’s ‘ghost estates’ in a series of striking images that juxtapose a fading hope for sanitized suburbia with the current reality, which is simply that nobody can afford to live in these houses. The National Institute for Regional and Spacial Analysis defines ‘ghost estates’ as developments of ten houses or more in which fifty percent or less of the homes are occupied or completed.

 

Read And See Unbelievable More 

 

Insights

There is little difference between between somber banking types and the wild party girls on videos. Both are the same too when the party's over and their respective worlds come crashing down. 

You think we are being funny, but actually we are quite serious. The facts speak for themselves...

Investors' Insights

June 3, 2014

Girls or Bankers?