Wall Street Banks Hide Risk Levels By Artificially Lowering Debt At Quarter End: WSJ

wsj.com:

The WSJ reports that according to new NY Fed data:

"A group of 18 banks -- which includes Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.-- understated the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods, the data show. The banks, which publicly release debt data each quarter, then boosted the debt levels in the middle of successive quarters."

Read the whole story: wsj.com

Comments

[Sundialsvc4]

09:15 AM on 04/12/2010

Mark my words: Article 2, Section 4, is the most important collection of thirty-one words ever penned by any calligrapher.

Especially the twenty-fifth word in that sentence. (Go ahead... "Google it." I'll wait.)
.

See what I mean?

Like all the other phrases in that sentence, like "all civil officers" and "shall be removed from office" and "high crime," that one word just sits there, right next to word number twenty-four, and between the two of them they speak volumes.

"Word twenty-five" is a most damning crime because it is an "enabling" crime. As long as no one uses "word twenty-five," but instead uses euphemisms like "campaign contribution" or "lobbying" or "corporate freedom of speech" (all of which exude legitimacy, even necessity), every outrage known to a nation will continue unopposed.

A group of less than seven hundred people, all of whom imagine themselves "richer than all kings," can (and do) make Plaintiffs of 309 million others, and steadfastly deny them Justice.

[guveqzero]

12:05 PM on 04/11/2010

An people wonder why Jamie Dimon is under criticism for his management of JPMorgan Chase and the risk to our economy. These guys are tricksters that live off the American people. But, it is hard to defeat Dimons billion dollar public relations team. I expect nothing from the SEC. If ordinary citizens were doing this, there would be aristocratic outrage.

[McGruff]

10:28 AM on 04/11/2010

Wall Street is the real threat to America.

Wall Street has hijacked capitalism.

I reject Wall Street's "profit before everything" definition of capitalism ... but I love capitalism.

We can choose to practice capitalism by recognizing that we are American's first ... that we are responsible members of our community's ... and that people are most important part of any business.

Wall Street doesn't care about their impact on America ... doesn't care about their impact on communities ... and doesn't care about their impact on people.

What's wrong with a lesser ROI as long as a business is sustainable?

Wall Street's greed is destructive.

Somewhere along the way ... Wall Street stopped infusing capital into businesses and industries ... and started pursuing a "profit before everything" strategy ... a strategy that bankrupted America's financial system ... a strategy that decimated communities ... and strategy that destroyed peoples lives.

Maybe it's time for us to start rejecting Wall Street driven corporations ... and start supporting more responsible businesses?

Capitalism is great thing ... but Wall Street's definition is not.

[realitytrumpsbull]

01:03 AM on 04/11/2010

Presumably, data manipulation like this represents an attempt to falsify results, but, is it illegal, or standard accepted industry practice? Will the SEC be stepping in, and hauling people off in black-and-whites, kicking and screaming the whole way, as a result? o0(Headline: Big-Time Bank Traders BUSTED! Possible Sentences: 15 To Life! )

[msjimmied]

12:20 PM on 04/10/2010

So wait a minute here...according to the official report, Lehman deserved to die because they took advantage of the Repo 105 trades to hide their level of debt. That was the official reason, too much leverage and shady accounting. Of course my question then was who were the counter parties? Now we know, they are all playing the same darn game. Power on Wall Street is now concentrated in even fewer hands. In light of this information, we need to dig deeper into Lehman Bros and Bear Stearn's demise. It was just way too convenient for Goldman and JP Morgan. The stench is suffocating.

[floodmfx]

09:29 AM on 04/10/2010

Steal money from one man, and you are a thief.
Steal money from ten million men, and you are a financial genius.

The president calls them "savvy businessmen" - and major universities, like Syracuse, invite them to make commencement speeches as role models for their students

[Kye154]

06:10 PM on 04/09/2010

If these same people at Goldman Sachs, JP Morgan, Citigroup, and Chase Bank, who are doing all this creative accounting, were to do your income taxes, the IRS would have had you thrown in jail for tax fraud by now. You would be paying the price for what they done. You are anyway! Remember, you and every single American taxpayer helped bail them out with TARP money last year, yet none of them went to jail. So, what is the matter with you Americans? Where is thelogic and justice in all of this? Why are you letting them get away with it?

[pjwrites]

01:34 PM on 04/09/2010

Duh. Where have you been and why do you think the populace is so dam.n angry? There are people who have been screaming these frauds and corruptions at the top of their lungs for nearly 6 years and the media is just now catching on?

Now that it's too late?

[karen1p]

12:39 PM on 04/09/2010

"Creative Accounting" at the highest levels of American corporations is what is bringing us down. Corporate lies, more like it.