Has the Belgian parliament ever formed a government? Earlier this year, it broke the record for the longest time a parliament failed to form one. The previous record, 248 days, was held by the Iraqi parliament.

And this bank passed the stress tests with flying colors, at least accouding to public announcements. Many here speculated that the stress tests were designed to let any too big to fail bank pass regardless.

I wonder if they’ll correct the values of the banks assets when they fold it or if they will permit the “rescue” banks to hold them on their books at the inflated value.

Boxturtle (Somebody isn’t clapping hard enough)

Thanks, mas. I think you have the situation nailed. Accountants are indeed a big part of the problem. One might ask why we can’t reform our Byzantine tax law. It seems obvious to me that it would put a lot of CPA’s out of work. Too bad, so sad. How many more dollars would be available to stimulate the economy if all those CPA dollars went into consumer spending instead? Would be a no-brainer, if there was no CPA lobby, IMO. Fuck ‘em, would be my position.

thanks for the “thirteen bankers” rec, into my amazon cart it went

“Of course, like lawyers, accountants long ago sold off their professional independence for a pot of gold, and are now part of the crowd of people ready to say anything that won’t hurt them personally.”

Yes, in deed … and in fact … now, what other “professional” groups might be said to have done the same thing, masaccio?

We are well beyond simple “fixes”.

Gotta luv that Bernanke, being so “astute” and all …

Thank you, masaccio, for the truth … it is a “commodity” much “shorted” of late,

DW

All across the world, the corrupt politicians, at the command of their masters, put private losses on the public’s shoulders. All the while the private investors still make their money. And the public sees none of it.

Why not nationalize the banks, examine the books, and hold the guilty accountable? … Well we all know the reasons for that.

The banksters learned their lessons after 1929. This time they walk away from the mess they created without any consequence.

Hope Europe’s voters do what Iceland’s did – tell the EU, IMF, and ECB to go f*ck themselves and make the banksters take the losses.

I have yet to see anybody explain for the public, the fact that the big European banks are not only saddled with sovereign debt of questionable worth, but also MBSs of questionable worth (toxic assets) sold to them by other banks, many of the sellers being big American banks.

The news is filled with weeping and gnashing of teeth over the sovereign debt of nations that is putting these Banks at risk, but is strangely quiet about the bogus MBSs they were sold by their cronies across the pond?

It looks to me as if there is a wide ranging conspiracy of silence surrounding the continuing impact of super-secret toxic assets still held by the world’s bankers, and the FED for that matter, and a concurrent hysteria over sovereign debt of nations.

Won’t somebody please explain what is known about the relative impact on the banks of these two categories of holdings?

It seems to me that the banks are attacking the sovereign nations because they are the only place they might be able to extort some money, as opposed to their banker buddies in the USA who are in trouble themselves and so could never make good on the difference between what they said they were selling, and what they actually sold.

The big banks, both here and Europe are avoiding suing each other because even if they were to win in court, the plaintiff cannot afford to pay up, OTOH, squeezing a sovereign nation just might result in some cash because citizens can be taxed, fired, cheated out of retirement, and run out of their homes by their bought-off governments.

The first domino falls…

That’s a good point. I checked the most recent financials of Dexia, which are at 12/31/10, so 9 months old. They report $14.3 billion in US RMBSs, marked down from the face value by about $4.4 billion. The language isn’t the same we use, but I think that represented the best estimate of total loss as of the close of the fiscal year.

Dexia reports that it had filed suit over RMBSs, but I can’t find a reference.

Dexia recently sued Deutsche Bank for $1 billion from something that looks like an Abacus transaction:

Dexia claims Deutsche sold the RMBS and then established a $10 billion short position in that segment to profit from weaknesses in RMBS.

Thanks for the reply.

What I’d like to see, (I’m not demanding this of you in particular), is a Bank-by-Bank, side-by-side comparison, column A = RMBS related holdings, column B = Sovereign Debt.

I would guess there are at least some estimates of the toxic holdings of these crooks.

The banks are perpetrating a fraud on us, with the help of MSM, by lies of omission.

It appears to me as if they are committed to hiding the impact of their business as relates to their peers, and roasting everyone else.

To top it off, the tactic has the added bonus of creating the public perception that We The People caused their problems, be we Greek, or whatever nationality.

Remember that nations did not start failing until after the MOTU tanked the world economy, the tanked economy resulted in precipitous loss of tax revenues for the nations who are now being blamed.

Just more blame the victim.

CPAs are just another failed institution, haunting us with their personal greed, their sneering at social responsibility, and their intellectual dishonesty.

Some years ago, I toiled in those sweatshops. The partners, hungry to obtain and/or retain clients, beat the shit out of their employees to keep the costs down. The difference between those low costs and the actual billings/collections goes right into the partners’ pockets. That’s the game. Yeah, the partners will say, “Make sure to record all your time,” but there’s a tacit understanding that you are most definitely not to do that. Either the employee works off the clock, or the work suffers…and many times both. And you don’t even want me to start on the two-bit whorehouse that the FASB has become.

Lest we forget, Dexia was the biggest borrower from the Fed’s trough during the bailout:

Belgian bank Dexia was biggest borrower from Federal Reserve discount window
Dexia, one of Belgium’s biggest banks, proved the biggest borrower from the Federal Reserve’s discount window in the week of the financial crisis that saw record demand for the facility.

At the height of the financial meltdown, on October 24, 2008, Dexia’s New York branch was used to borrow $31.5bn (£19.6bn). The total borrowing from all banks during that week climbed to $111bn, according to lending data released by the central bank on Thursday.

See article here.

Through July 10, 2010 (nearly 2 years later), Dexia had hit up the Fed for some $159b in total.

See here.

Thanks much.

From your linked article;

“The information is backward-looking,” said Ulrike Pommee, a spokeswoman for Dexia. “We experienced a great deal of tension concerning the liquidity of the dollar at the time.” Dexia has since reduced its outstanding balance at the Fed to zero, said Ms Pommee.

Translation;

“You have to understand, and this is all very embarassing, but we were scared shitless, and didn’t know what else to do…”

Why is it that when a regular sort of person goes to borrow from a bank, they are made to feel small, but when a bank goes to borrow … oh never mind.

Also, they always prefer the story to be about govt fuckups rather than bankers fuckups.

It’s important to remember that ultimately this is not just about spin; it’s about the cover-up of a multitude of crimes, starting with those perpetrated on investors at the time of securitization of all those mortgages.

While the worth of those securities may have been impacted negatively by the borrower’s default on individual underlying mortgages, prior to that, they were rendered absolutely worthless by the behavior of the parties issuing the MBS at origination because they broke the rules governing the securitization process.

The Banks committed fraud on the investors, the investors and the banks are hiding the facts, and meanwhile, because all of this behavior has left them insolvent, they are, with the help of our governments, extracting the cash necessary to cover their asses from the only source left, the people.

Shorter;

They’re trying to stay out of jail.

That’s a great summation. I wish more people understood it as clearly as you. I’m a lawyer and an S&P 500 futures trader, so I’ve known and been gnashing my teeth and pulling out my hair about it all for the last six years. Now I’m bald and wear dentures. Grrrrr!!

Shorter;
They’re trying to stay out of jail.

I’ll say. As did the Prez, in so many words:

Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.”

Heh. We can only hope that Obama remembers that sentiment and turns it into a real, actionable campaign theme and rallies the populace accordingly.

Masacio,

I wonder if you’re aware of a guy named Zeus Yiamouyiannis?

He has a remarkable series of economic posts at Charles Hugh Smith’s site;

Of Two Minds dot com

1. http://www.oftwominds.com/blogjan11/Zeus-one01-11.html

2. http://www.oftwominds.com/blogjan11/Zeus-two01-11.html

3.http://www.oftwominds.com/blogjan11/Zeus-three01-11.html

He has an incredible grip on our situation and its causes, which he has no problem explaining in straight forward language.

His posts are succinct and easy to read.

A sample from the third link;

… This possibility of epic reprisal may very well compel banks to come to the table around debt forgiveness to avoid violent backlash and criminal prosecution, even over preserving their gravy train companies. The bitter irony of these companies and their galloping greed is that they ended up victimizing each other by selling junk to each other and extracting all the real value in salary and bonuses. Their assets rest on notional values, that when unmasked would drive each into immediate insolvency. They have simply been scam artists, producing little value and extracting mountains of money.

What might this look like? Looking at present trends and using the very useful framework of Kubler-Ross’s stages of grief, it might go something like this…

Average debtor:

1) Denial: Liquidate savings to pay for over-priced house and cost of living.

2) Anger and fear: Exhaust resources, experience want, compounded by austerity measures.

3) Bargaining: Attempt to negotiate with bank through HAMP and other mechanisms to lower payments. Banks don ‘t bite and even have incentives to foreclose.

4) Depression: Lose/default on the house and move in with family or cheap rental.

5) Find out life is better without being a debt slave and spend more time with community and the ones you love.

Bankers:

1) Denial: Collect 144 billion in bonuses after financial collapse and laugh as not a single trading day loss arises for zombie TBTF banks completely subsidized by governments.

2) Anger: Express false righteousness, indignation, and hubris over even modest/toothless demands/regulations attempted to be placed on them by governments. Exhibit sadistic zeal at being able to simply claim you own and liquidate properties they have no clear title to.

3) Bargaining: Experience dawning awareness that may have just cooked your own gooses as strategic defaults skyrocket, populist demands to prosecute fraudclosure gain traction, and quantitative easing ad infinitum dwindles and fails to keep stock prices artificially aloft. Improvise panicked attempts to “be reasonable” and actually negotiate, once the asset and money flow well runs dry.

4) Depression: Contemplate and realize possible bankruptcy by big banks. Retreat to the Hamptons to hire criminal defense lawyers, contemplate empty life, and shoulder the abuse of media and contempt of a global citizenry.

5) Acceptance: Trying to regain “good guy” status and avoid criminal prosecution by agreeing to be part of debt forgiveness.

Masaccio, I’m sorry about flubbing the spelling of your name sir.