Sunday, April 05, 2009

Operant opinion...

If you have half an hour why not listen to the revelations of the wholesale greed and blatant financial transgressions, these are based in Wall Street but a lot of it is very pertinent too to the UK's own problems: "The Best Way to Rob a Bank Is to Own One." Bill Moyers on his Journal interviews William K. (Bill) Black: [Transcipt] [Video] For me it is the clearest and easiest to understand explanation yet of what went wrong and why, the deceit, fraud, vested interests and greed; also how it could have been avoided, what needs doing now and why there doesn't seem to be any great effort by politicians or the powers that be to investigate or to bring justice to bear on those responsible. Read of the lack of integrity and of a real MORAL crisis.

BILL MOYERS: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme.

WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn't even get into the front ranks of a Ponzi scheme...

"So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets."

"...the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?"

"They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent."

"...regulation means that cheaters don't prosper. So, instead of being bad for capitalism, it's what saves capitalism. "Honest purveyors prosper" is what we want."

"We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start."

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Paul said...

We should adapt the Arsene Wenger approach to football and apply it to finance - and I don't mean import a load of cheap French teenagers! Look at what works not what doesn't is a good start.

There has been some serious frauds in the States and I have to say that auditors are partly to blame because they are afraid of upsetting their blue-chip clients. Assets have been inflated and when businesses have collapsed there's nothing tangible there.

KPMG are being sued for £1 billion and other firms have sued out of court. There is more to come on this - I can't help thinking something big is going to emerge during the summer recess.

12:55 'the bonuses were also a product of accounting fraud' - at last somebody has finally seen the elephant in the room.

The bail out of UBS is mind numbingly dumb. Fine somebody and then pay the fine yourself!

There are massive holes in any defence the banks can offer, how can a business institution be controlled properly and yet needs trillions of dollars to support it?

It's interesting that the Federal Reserve considers that there was enough regulation and yet everything is totally screwed. Why is failure so well rewarded and yet when a clear effort is made to regulate and legislate properly the person(s) responsible are ignored.

The one question I can't help avoiding after listening to Bill Black is what is the real state of the U.S finances?

It strikes me that after the collapse of Enron accounting rules the world over were changed and yet the number of cases coming to court of fraud hasn't increased. Why is that? Are people turning a blind eye because as Bill Black says 'they are scared to death of the truth and many of the large banks are insolvent'.

Thanks for the heads-up on Bill's vid.

Paul said...

Sorry just a P.S - 24:27 - what a wonderful way of avoiding the phrase 'protecting your arse'.

Span Ows said...

I knew you'd enjoy it! Just went to the PBS site again and it's down...I hope I haven't caused any trouble! It's public broadcasting - like the BBC and unlike the BBC at the same time - so I guess they get really busy at times.