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Lehman: How $50bn was buried in London

Robert Peston | 15:56 UK time, Friday, 12 March 2010

$50bn is not a trivial sum to hide from investors, creditors, rating agencies and the US government.

Lehman Brothers buildingWhich is why the assertion by a US court-appointed examiner that Lehman used an accounting ruse to keep from public view some $50bn of loans and investments - and thus appear to be taking fewer risks than was really the case - is a serious charge.

To be clear, the examiner does not say that this device was responsible for Lehman's collapse. Its demise stemmed from its excessive investments in the US commercial property market and its dangerous reliance on short-term finance that could and was withdrawn.

However Lehman might well have collapsed earlier if the full extent of its loans and investments had been in the public domain.

Which is why it is at the very least highly embarrassing for Ernst & Young that the examiner says that global accounting firm is liable to claims for damages because of its alleged "failure to question and challenge improper disclosures" by Lehman.

And the examiner also says claims can be made against Dick Fuld, Lehman's erstwhile chairman, and a trio of its former chief financial officers.

Lehman's creditors and investors will be studying the examiner's report in a forensic way, to assess whether they should sue those criticised in the report.

Meanwhile there is also some unattractive publicity for the London law firm Linklaters and for the now controversial light-touch regulatory culture that existed in the UK till recently.

The examiner says that the so-called "Repo 105" programme that allowed Lehman to hide that $50bn of assets was not permitted by any US law firm.

So Lehman obtained an "opinion letter" from Linklaters in London that said the relevant deals were permissible under English law - and the relevant transactions that hid the assets were then conducted through Lehman's London operations.

There's no suggestion that this was illegal or in breach of any rules.

But some would say it is unedifying that the deals that buried the $50bn of assets were not permissible on Wall Street but could be done in London.

Comments

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  • Comment number 1.

    The following as I understand it are facts.

    The financial industry in this country has been regulated in the past by the following:
    The Bank of England,
    The Financial Services Authority,
    The Financial Ombudsman,
    The Treasury,
    The Basel ll Agreement,
    The European Union.

    And that’s an awful lot of people doing an awful lot of regulating.

    And in addition we have lots of auditors and even more accounting rules.

    And let’s face it, it’s not worked has it.

    Regulation has failed to prevent the current financial crisis.

    Regulation and auditors have failed to prevent bank collapses.

    Regulation has failed to prevent the mis-selling of financial products, such as endowment policies, personal equity plans, payment protection policies, equity release schemes, self certification and 100% + mortgages etc.

    Regulation has failed to address to the issue of unfair bank charges.

    There isn’t a week that goes by without another financial scandal being reported in the tabloids.

    It’s not more regulation or auditors we need, what we (the country) needs is the state to control the creation of money as debt.

    Because if we (the country), don’t have control over the creation of money, we (the country) will be forever at the mercy of those private corporations that do.

  • Comment number 2.

    The fundamental problem with the audit of Lehman Bros seems to my mind to be the one that is at the heart of the collapse - borrowing short to lend long 'secured'(!) on assets that are vastly overvalued (and that anyone with the IQ about that of a louse knew were overvalued!).

    Should the auditors have questioned this situation? In hindsight, yes obviously, but at the time all the 'professional' were taking GB's view that boom and bust had been abolished! Who can be blamed? Those in change of regulation and who were charged to be responsible. This is why I am so censorious towards Ben Bernanke and Mervyn King etc. Now in turn these guys were trained in Harvard (sharing the same study) and it too should take a share of the blame. The pack of cards collapsed as most people outside the regulators and the city knew it had to.

    What is so galling to logic is that these people have not yet been sacked.

  • Comment number 3.

    Why should we be surprised that the City could be more laissez faire than even New York. It confirms Brown-Blair worship of the City. The belief that what is good for the bankers is good for UK and the Labour Party. The so called light touch so praised by Brown in 2006. Auditors who are clearly paid not to listen and legal firms available for rent a brief. Do we need any more stories like this to convince the government that finance and banking need supervision and public intervention if we are not to be consumed by the beast once again.

  • Comment number 4.

    We know that large companies do these flaky things. We know that most often they don't get caught out until the firm goes bust, and then if they were stupid enough to still be on American soil some executives might go to jail. So far its all old news.

    The real scandal is not that firms make mistakes and go bust. The real scandal is not that they try every method, legal and not so legal, to avoid it for the longest possible time. The real scandal is not even that all the banks relied on governments not letting a failure like Lehman's go bust, because that would also tip them over the edge. There was even a financial consultant on TV this lunchtime (name withheld to protect the foolish) claiming that the financial crisis was the US government's fault for letting Lehman's crash and so calling the bluff of those banks that were betting it would never be allowed.

    The real scandal is that we are still in this situation. The sooner the less successful banking frauds and cheats are given a way to put themselves out of business without imploding the entire country, the sooner the rest of us can sleep at night.

    P.S. Time to put an auditor in court, even if its only a civil court.

  • Comment number 5.

    I will try and get in before Guy Croft. What yet another banking story?

  • Comment number 6.

    I smell a whitewsh with no-one and everyone to blame. In the mean time Lehman's creditors are down umpteen billion but who's going to compensate them for the obvious mis-management?

  • Comment number 7.

    I wish some of the $50 billion was buried in my bank account.

  • Comment number 8.

    Sorry to point this out but is a solicitors opinion a valid excuse for all of this? It doesn't sound like a get out of jail free card to me!

    The more that comes out the dirtier and dirtier it all seems.

    If what Lehman's were doing in London and what AIG Financial Products were also doing is symptomatic of what bankers got up to in London during the boom well a curse on them and all their household.

    Perhaps we should let them all go off abroad. I assume a London lawyers letter wouldn't be viewed as an acceptable form of defence if the bankers set up abroad and matters came to court in a foreign territory.

    Perhaps the bankers might want to ask Nick Leeson re the joys of being jailed abroad?

    Robert any thoughts?

  • Comment number 9.

    Great - This is not good and another nail in the coffin for the UK with the City of London taking a sneaky below the belt punch from the Yanks for crunching through the 'last minute dot com' approval of a very dodgy investment tactic.

    Bearing in mind that the UK's economy makes up a significant deficit in our world trade account, these reputational failures will cripple the UK's trading ability and further undermine reputation as a trusted financial centre. Instead every Tom, Dick & Harry from the underworld of unscrutiable trading will now think that British financial divisions and their advisor's will sign off any old scam, providing the readies are there to pay the already established greedy, overpaid & taxpayer subsidised bastards...

    Stick to the Co-Op bank, if you have to, grow your own vegetables and stick your money under the bed in the form of gold bars I say.

  • Comment number 10.

    Want to do something about this whole mess

    "A posting on the UK Indymedia website is suggesting another Financial Fools Day protest on 1 April, in response to the 'Banking Bail Outs and Bonuses'. The City of London Police have no information or intelligence to suggest that this will receive any substantial support although a policing plan is being prepared. "

    Come down - I will be taking a day off work to join in. You can get here very cheaply if you book your train ticket in advance!

  • Comment number 11.

    No need for additional regulation of banking. As we can all see they make up their own rules have their own accounting firms and can confirm any misdeed or unethical practice as "legal." Why protect the money of hard working people when the banks are looking out for them? Just another exposure of the banking wide collusion to bilk the common depositor out of their savings and investment to enrich themselves. Your government, when advised of the problems, turned away and let the "market forces" manage the situation....thus a global financial collapse. Now that both socialism and captialism have failed the people they said they would benefit, it may be time to look at another model. Defenders of the status quo are either ignorant or owned by the banks.

  • Comment number 12.

    Hiding assets and not declaring loans etc is fraud in my book.
    Lies and deceit seemed to be the norm, question is how many more organisations are doing the same in an unregulated industry.
    Even with regulation its so secret how would you find out about wrong doings, hiding behind business confidenitality is wrong.

  • Comment number 13.

    This infographic puts the scale of Lehman's bankruptcy against 19 of the Largest Bankruptcies in History:

    http://awesome.good.is/transparency/web/0906/trans0609largestbankruptcies.html

  • Comment number 14.

    Which is why it is at the very least highly embarrassing for Ernst & Young that the examiner says that global accounting firm is liable to claims for damages because of its alleged "failure to question and challenge improper disclosures" by Lehman.

    Now we know why they haven't come out to defend their behaviour today! Hiding their red faces and looking for some poor third world country where they can set up a new tax haven, while they try to find the right marketing guys with the skill to help them spin this away.

    It won't work.
    Can't make a silk purse from a sow's ear.

    Now, where are the boys in blue with those rather fetching, if somewhat common, metal handcuffs. Will they be starring on the 10 O'clock news as the arrests begin?

  • Comment number 15.

    So, the FSA didn't look at why Lehman swapped jurisdiction for support of its financial status?

    This looks like the classic situation that should have rung bells and waved red flags at the Treasury, Bank of England and FSA, as well as law firms who work internationally, but they walked by on the other side.

  • Comment number 16.

    WEll done DEmpster. Absolutely sport on, except that it is the U.S.A. where private banks control the creation of money. In this country it is the Bank of England which is "independent" but actually makes joint decisions with the Federal Reserve and the European Bank. (see Secrets of eh Federal Reserve by Eugene Mullins). Has anyone wondered why China never had a credit crunch? The creation of its money is under state control. Perhaps this is the only acceptable feature of Communism. There is absolutely no need whatsoever for the credit crunch. It has been created by the biggest insider traders in the world for their own ends. I belive very soon they will collapsse the gold price. Mark my words.

  • Comment number 17.

    I have read this, and the blog post before it with an interested eye. I originally trained as an auditor, before crossing to the other side of the desk and running company finances. There are a number of points I would make:

    1. Whenever a company collapses, everyone's first reaction is to blame the auditors. They have professional indemnity insurance, and therefore have deeper pockets than the failed company.

    2. Auditing a multinational company does require a large audit firm with a multinational presence. More firms of smaller auditors won't fix the problem - Joe Bloggs Accountant on the high street won't be able to give a better audit opinion than the large firms currently can.

    3. It is not efficient to rotate audit firms any more frequently than say 5 years - it takes at least one audit to get to know the client well enough to understand where the problems might lie for the future.

    4. Where the audit firms do fail in my view is in encouraging their staff, even at junior levels, to believe that they are business advisors. When I left auditing, the first thing I learnt was how little I knew. There may be some case for professional training somehow including a compulsory element of time working in real accounts departments. Don't quite know how you would make it work, but I do think it would improve the quality of audits.

    5. The difficulty with all auditing is not spotting what's there - it's spotting what isn't there.

    6. If a company really has the motivation, then I'm sure it must be possible to hide it from the auditors. Be very clear - I have never tried, but I'm sure it must be possible if you try hard enough.

    I think the really issue behind all the bank collapses is that they financed long term loans out (i.e. mortgages) with short term finance - one of the things you get taught as part of your accountancy qualification is to fund long term investment with long term funding. Strange how all the finance directors missed this point...

    Trouble is the short term view of city investors means that no listed bank probably wanted to be left behind.

  • Comment number 18.

    Robert Peston: There's no suggestion that this was illegal or in breach of any rules.

    Robert, you are a financial journalist who worked for the FT.

    If you can't:
    1) highlight the accountancy rules that these actions transgressed,
    and
    2) highlight the laws that Linklater's interpretation pushed to the nth degree (and just how much evidence is there that a Judge sitting in an English Court would throw out Linklater's 'opinion' ?)

    then you may not be worth your salt !

    Let's have some serious journalism from you. Please. Put in a P.S. or a third post detailing these issues.

  • Comment number 19.

    `There's no suggestion that this was illegal or in breach of any rules.'

    Pull the other leg: it has bells on it!

    This is clearly an attempt to mislead the regulators and abuse investors, savers and other clients. Without this ruse the bank would have been broken much earlier.

    Under the Theft Act, the very act under which those three MPs and a Peer of the Realm were up in court yesterday, this is a straight forward case of someone seeking a pecuniary advantage.

    Where is Mr. Plod with his blue lights and noisy siren? Funny, there never is one when you want one.

    Poor old Gordon: he thought it started with the Yanks and their banks, now it is with the Yanks and our lawyers. Time for a clear out in Westminster, the City and amongst our learned friends. Do any of them really know what they are doing? Is everything a power play with these people? Do they have no moral sense at all? Come to think of it, do they have any sense at all other than the one associated with deep pockets and full boots?

  • Comment number 20.

    9. At 4:48pm on 12 Mar 2010, thetopbrummiecat wrote:
    Instead every Tom, Dick & Harry from the underworld of unscrutiable trading will now think that British financial divisions and their advisor's will sign off any old scam, providing the readies are there to pay the already established greedy, overpaid & taxpayer subsidised bastards...


    That's what they think, and from the looks of things they've been thinking that and acting on that for years already.

    Where are the defenders? Still in a meeting, are they?



  • Comment number 21.

    Its simple really. Banks (and related entities) should NOT in any way be allowed to use depositers money to engage in business of ANY kind apart from lending with adequate collateral. This business of engaging in high risk gambling/hedging/derivating (and high bonuses) with cheap depositers money WITHOUT any oversight should be banned. Especially if the government(s) are supposed to end up footing the bill when the gambling chickens come home to roost !!

  • Comment number 22.

    Its a damning indictment of our Government that Americans had to use our system to launder their dealings.We will have to change the ratings so so B+ actually equals AAA, still no problems there we have successfully managed that with the education system.

  • Comment number 23.

    my comment is regarding Mr Peston as a presenter, he must be knowledgeble on money matters but he needs to take training in how to present himself on air,
    i always turm
    the sound off when he is presenting as i cant stand the way that he talks it seems he does not know what to say, or say it correctly and it drives me crazy

  • Comment number 24.

    The fact that Linklaters gave a legal opinion that Lehman's US lawyers wouldn't is being described as if the UK firm has lower standards than the US firm or was somehow complicit in Lehman's activities. Peston's piece has that implication (despite the disclaimer). But New York law and English law are different in many respects. What constitutes a "true sale" (which is what this was about) is just one of them.

  • Comment number 25.

    Seeing as we’re getting near to budget time and tax is likely to be increased to pay for the bank bailout, consider this:

    • The banks have taken Government money to survive.

    • The Government increases tax and cuts public sector jobs to pay for this.

    • The extra tax and/or loss of your job means you can no longer keep up with your mortgage payments.

    • The bank in receipt of the government money then repossesses your house.

    How about that for a moral hazard.

  • Comment number 26.

    Bernie Madoff went to New York and Friehling & Horowitz.

    Lehmans went to London and Linklaters.

    Seems perfectly reasonable to me.
    What's the problem?
    This is how we exist nowadays.
    If you are not careful you might get left behind.
    Lose your bonus entitlement.

  • Comment number 27.

    "But some would say it is unedifying that the deals that buried the $50bn of assets were not permissible on Wall Street but could be done in London."

    Robert, you will go down as the pre-eminent chronicler of the crash. Your analyses have performed outstanding public service.

    But I fear this is one of your off days.

    This conclusion is nonsense. In fact it states the complete opposite of the truth. The scandal here has nothing to do with UK law. It has everything to do with form over substance US accounting standards.

    The UK legal question was who owned the stock repo'd out. Linklaters' opinion simply stated the legal effect of the transactions was to transfer ownership of the stock away from Lehman. This is a truism under UK property law. US law may be different. But the UK position is clear. Every lawyer in the City knows that. Come to that, so do the Lehman creditors. In their capacity as Counsel to the Administrators Linklaters are no doubt even now recycling their earlier opinion to point out to those self-same creditors that all the inventory Lehman repo'd out in its mad final days as it scrambled to raise cash no longer belongs to Lehman and so is not available to satisfy their claims.

    From an accounting perspective, though, things look different. This is not only because lawyers are from Mars and accountants are from Venus. It is because the legal questions noted above are primarily relevant when people go bust (as the Lehman creditors have discovered) but the accounting standards are written to the situation when people do not go bust - i.e. are prepared on a going concern basis. If and so long as that is the case (a rather important caveat) the economic substance of a repo, any repo, is that of a secured borrowing. One would expect rational accounting standard setters to write there rules to deal with the economic rather than the legal substance. The scandal here is the US GAAP standards, seemingly, did not do that. And, of course, the fact that they were exploited accordingly.

    Of course, US GAAP has form with form, so to speak. Remember Enron and the US accounting standard that said there was no need to consolidate an entity if 3% of its ordinary equity was outside the group, as if any sane person would think owning only 97% made a difference.....

  • Comment number 28.

    There's no suggestion that this was illegal or in breach of any rules.

    I appreciate the beeb's lawyers probably thought it was a good idea to put this in and i certainly do not suggest any differently, but the whole attitude of professionals (accountants / Lawyers etc) of show me the rule which says we cannot do that is a large part of the problem

    Repo 105 is not new, it dates back to 2001, for those who said that my earlier suggestion of mandatory change of auditor every c 2-3 years would have made no difference, well it would have meant that around three instead of 1 of the big four Audit firms would have had to, at best virtually turn a blind eye to the buried $50bn

    It is vital, imo, that the full correspondance and events come to light, which initiated, after being told this was not a sale under US law, why a UK law firm was asked to give a legal opinion of whether this was a "sale" under UK Law and why this letter, soley to be relied upon by Lehman Broker Investments (Europe) should have held such weight with the management of Lehmans and Ernst and Young.

    If there is any hint whatsover that Ernst and Young suggested this be sought, or was needed to enhance the appearance of the balance sheet, then never again should Auditors be involved in anything other than performing a strict Audit.

    To be clear i am not implying this is the case, but imo it is vital everything as to how this accounting practice became used, comes to light

  • Comment number 29.

    Dear Robert Peston.

    You sound like a newspaper vendor not a punchy investigative journalist.

    Spent force with posh friends?

    This was a scam. Exploiting weakneses in a system is not laudable. London and UK Govt are self announced 'best brains'.

    We want to know the details of why the London lawers and regulators said OK to something which the USA [now it knows about it] says is not OK.

    Just how do the layers explain the sense of hiding what the USA would not hide? Do they claim to be better judges of risk and probity?

    Or is it that they are so low, that they are willing to exploit any badly written law / regulation; as opposed to draw attention to the need for remedy.

    Come on Robert give us a view.

  • Comment number 30.

    13. At 5:17pm on 12 Mar 2010, tomtmrw


    The graphic took five minutes to download and is so huge I can't see it clearly, it takes too long to scroll.
    about as helpful as an audit is to an investor!
    See, the problem is when people try to go all 'modern', just like the banks, it doesn't work, it isn't clear and it isn't smart.

  • Comment number 31.

    The issue that continually comes up is the one word - integrity.
    This is a Biblical requirement, and all the regulations in the world will never work until/unless the "watchmen" watch with integrity.

    The UK has a huge tradition of working with our LORD to impose Christian integrity - but that was more than a century ago. How I yearn for today's leaders to be the same, but either they repent or they will be thrown out. Yeah

  • Comment number 32.

    19. stanilic 'Pull the other leg: it has bells on it!'

    With all due respect, perhaps you just don't understand the nature of liberal-democracy and the legislative/executive process?

    You are not alone. The system counts on most of the electorate not understanding how it really works in the interest of those who profit from it. That's what anarchism, or 'freedom', is really all about, and it's why some foreign regimes try to keep us out. Watch 'The Warning' at FRONTLINE and then re-read your anarchism tracts (with people like Ayn Rand in mind). Most working for these big organisations today are just doing their jobs, as were most in ENRON. :-(

  • Comment number 33.

    So Lehman were able to claim its assets were $38.6bn lower than they actually were at November 2007. By May 2008, Repo 105 was concealing $50.4bn.

    In 2007 Lehmans awarded themselves $5.7 in bonuses.
    In 2008 (after they went under!) Lehman bankers received $3.5 billion in bonuses.

    Knowing what we know now, is there any chance of recovering some of these bonuses?

    (No need to respond. I already know the answer to this question).

  • Comment number 34.

    The "opinion" is in fact a "true sale opinion" i.e. that the transaction in question amounted to a sale.

    Having taken the trouble to go though the nine volumes of the examiner's report, I can find no passage criticizing England for not having the same laws in this area as the State of New York or for that matter the English law firm for stating that what was not a true sale in New York could be a true sale in England.

    English laws are different in all sorts of areas: the death penalty, libel suits, election of judges, monarchy, federalism etc. and unless someone wants England to become the 51st State that should not be a problem and is certainly not an implied criticism of London as a financial center or its system of regulation.

    What was criticized in the examiner's report was that the US entities in Lehman despite US law firms reluctance to classify the transactions as a true sale went ahead and participated in Repo 105 transactions through the London entity and above all the disclosure in Lehman's public filings.

  • Comment number 35.

    Are we really surprised that people who are paid to check complex businesses miss things - like £50bn of buried assets?

  • Comment number 36.

    3# Let me guess the solution - unleash George "the rottweiler" Osbourne onto the banks - why, he'll talk to them and he'll admonish them and then he'll jolly well give them a really stiff talking to!!

    Now, who do we think first thought it would be a spiffing idea to let the banks do what they want...that's right - Margaret Thatcher.She had a really good friend from the US called Ronnie Reagan (for younger viewers he was a Republican prototype of George Bush- just as bright) and together they preached deregulation. Blair failed to contain that beast but is anyone seriously suggesting we leave the economy in the "safe hands" of George Osbourne. I'd sooner trust George Galloway! (but I would draw the line at Bush)

  • Comment number 37.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 38.

    The major problem we have at the moment is that banks pay agencies like Standard and Poors etc to value their bundles of rubbish mortgages (that they sell) and quel suprise - they are rated at AAA with gold oak leaf clusters and a heavenly halo.

    The fault lies with a number of parties - government, business, regulators and the people that buy the crap.

    Remember - Banks are in it to make money and if they shaft their grandma in the process they don't care. Really - they don't give a flying xxxx. They are run by people who see money as everything.

    There is no easy solution - would we trust government to run banks - xxxx me - they'd be worse than the professional scum that run them now! At least they are "professional" scum.

    One option is that we have more transparency - this would enable people & businesses to invest with more confidence. We should be able to test what we are told by banks - the market will of course decide.

  • Comment number 39.

    Dear Robert

    There appears to be a thorney issue you can help me with. I have asked in a letter to the BBC, a letter to the treasury, a letter to the Chanchalor and I awit a anweser from my MP. Meanwhile I would like your view. The question is: what agreed repayment plan is in place and from which date will the Banks begin to repay the loans the Bank of England provided to them over the last 14 months? The BBC i have my email address for you to reply on. Regards, Paul

  • Comment number 40.

    30. At 7:59pm on 12 Mar 2010, copperDolomite wrote:
    13. At 5:17pm on 12 Mar 2010, tomtmrw


    The graphic took five minutes to download and is so huge I can't see it clearly, it takes too long to scroll.
    about as helpful as an audit is to an investor!
    See, the problem is when people try to go all 'modern', just like the banks, it doesn't work, it isn't clear and it isn't smart.


    Maybe you are running a Commodore 64 with a tape drive and slow dial up, lol, or trying to see it on an Iphone. I am sure this graphic could be of help to Mervyn King, the FSA and our glorious leaders and make the difference.

  • Comment number 41.

    40. At 10:26pm on 12 Mar 2010, simondav wrote:

    No, a relatively new laptop hooked up to a very quiet broadband connection in a science facility. I know UK science is a bit underfunded but we aren't yet reduced to the old commodores lurking around somewhere in the storage facility.

  • Comment number 42.

    they are all at it, even the banks in the UK ,how much off balance sheet stuff has yet to be written off ? and the governments do it too hide it the smelly stuff , its all an illusion, this has culminated in the largest fraud ever in the history of the world

  • Comment number 43.

    "But some would say it is unedifying that the deals that buried the $50bn of assets were not permissible on Wall Street but could be done in London."

    Could it be said Robert that this in fact shows that as we approach a general election Gordon in fact had a lot more to do with allowing the global financial system to go rotten with our loose rules and laws than he had to do with saving the said system from US infections? Saving it further from a "unique global economic phenomenon"!

    Does it also show that when Blair criticized the FSA for wanting to investigate "perfectly respectable banks" he was speaking from a position of power - but also of total ignorance of the risks?

  • Comment number 44.

    On a day to day basis the banks/lenders are operating on "new" lending criteria.

    It is as ludicrous as the old " Give the cash to anyone" basis.

    The annual cash transaction totals for the UK , Eurozone and US amount to many trillions, but the "top" guys only see the "Big" deals.

    They consider any conservative, small profits to be made out of retail banking to be beneath them.

    "Thousands? Thats for little people!"

    The essence of the whole problem is that overinflated ego's have decided that only "mega" deals are worth considering; so ordinary day to day banking is out of the question.

    Hence, the banks are making huge profits at a time of fiscal crisis.
    Why?

    Because again they are playing the funny money game.

    In the real world, my multi national, multi billion turnover employer has had two lots of redundancies in a £100 Million plus, almost £1 billion T/O plant.

    People who now have to do the work of two are going sick through stress, the company based its redundancies on a projected downturn to 45 loads a day and we are averaging 93, and on Thursday shifted 138 worth approx £4.5 million.

    The company actually broke its sales record in January and is now getting customer complaints because of stock shortages and late deliveries; they cut the transport from 2 to 1 companies to get a better rate and the small co that took it on on the basis of 45 trailers a day can not cope with putting in 70!

    Manmagement in this country and abroad are generically incompetent, self-serving and logistically illiterate, the investors suffer complete myopia regarding the future of companies and the banks make generic decisons across whole industries and refuse to look at the individual companies fiscal status.

    Its the STUPIDITY, STUPID!

  • Comment number 45.

    What would have been different if we'd had a Tory government for the past few years?
    I suspect things would have been a lot worse; they only way to get elected in this country was to pander to greed.
    I don't think we've learned our lesson, sadly.

    We all expect things to be fair, but what is that, exactly? Is it fair that we have people frog-marched to court for taking a few quid under the table for a morning working on a market, while the traders and bankers are merely criticised for the global distress their activities have caused?

    Why aren't they in court? Why aren't they hounded as the anti-social toads they truly are?

    44. At 01:23am on 13 Mar 2010, moncursouthernreiver

    You're company is on the road to ruin - they are losing staff, creaking equipment, gaining in complaints and all of that will lead to a loss of orders. Most clients do not want to do business with an organisation that grinds down staff. It leaves a bad taste and clients will avoid that by finding alternatives.
    Seen it all before.
    Get yourself a new job, a copy of the health & safety regulations, a union or a sick note and a lawyer.
    They have a duty of care not only for physical health but mental health.

  • Comment number 46.

    I live in Australia which has a host of Regulators. The Financial Markets and technology have moved well ahead of legislation and Regulators in several major world markets. Product approval processes, prior to public sale, will allow Regulators to acid-test if existing systems have ample checks and balances, weigh up the risks and update legislation/regulation before product approval. Much like the Food & Drug Administration does, to ensure it does not okay toxic items.

    In summary, its not the number of regulators but the Quality of regulation and "What are they regulating" in the constantly evolving market which missed the mark and will continue to do so......it appears.

  • Comment number 47.

    Re 46 FlamingBull...
    Congrats to Australia for missing the worst of the mess.
    But Australian banks are still vulnerable.
    This sorry wreck was caused by the mis-selling and over-valuation of property, residential and commercial, and in that regard, Australia is still in a dodgy area.
    Keep your fingers crossed and the bullet may dodge you, but over-pricing of property still threatens Australia.
    It has already ruined Japan, the US and UK.....time will tell.

  • Comment number 48.

    Anyone who believes that 'The City" will get us out of the economic doldrums is living in Cloud Cuckoo land.
    Surely anyone with half a brain cell must realise that our only hope is in the revival of our industries and
    the export of manufactured goods bearing the proud slogan "Made in the U.K" From Thatcher to Brown there has been a constant chipping away at our industrial heritage, resulting in the ever growing export of
    goods and services and ever growing unemployment at home. Sure, we exist in a gobal economy but unless the current trend to rely mainly on financial products for our export trade is reversed we are doomed.


  • Comment number 49.

    I said before that all, or most of the major banking fraud comes out of America, well to me it looks like that.

    I would still be happy to be proven wrong. This is just a further take on it all. And passing the excuse away from the boardroom so directors can still have the shares and pensions from the firm.
    Maybe, Robert, you could have a separate article to explain what does add value to the shares of a firm?
    Being a dullard it would be good to know.

  • Comment number 50.

    No not fraudulent as you say, but interesting to note the statement "not permitted by any other US firm". What do you think Diamond, Barcap and Barclays were up to, let alone the others, during the last 6-7 years?
    This is business, cut throat and ruthless.
    If heaven forbid books could be opened up for a thorough "audit" and "sober reflection" on past activities, scandal and outrage might be amongst the tamer things thought and said!
    There are few if any constraints on business activities, if you really sit down and analyse it, provide rules and regulations are not openly flouted, most get away with it. "Sorry guv, didn't realise, won't do it again". Joke.
    Companies will move assets with accountants and lawyers (fat salaries too) advice anytime it is in their best interests to do so and as for morals and ethics?
    Hey this is business, there are none!
    Why do you think Barclays and the others got away with it for so long - its best to turn a blind eye and let the taxes come rolling in than 'rock the boat'.
    After all, what can they honestly do to change anything?
    Shut them down?
    PMF!

  • Comment number 51.

    Rob can you clarify whether the auditors etc were aware of the lack of this lack of integrity, transparency and accountability and ignored / manipulated the legal process or not. Are Audit Firms paid to look the other way and do what they are told to earn their top dollar.

  • Comment number 52.

    51. londonunderground 'Rob can you clarify whether the auditors etc were aware of the lack of this lack of integrity, transparency and accountability and ignored / manipulated the legal process or not. Are Audit Firms paid to look the other way and do what they are told to earn their top dollar.'

    Why ask?

    Watch this and think for yourself. Try reading this too, and see the German's on the Giant Squid.

    The problem is, regardless of how much people are told, they just won't/don't believe it, mainly because it's all too unpleasant (right-wing political correctness masks the modus operandi).

  • Comment number 53.

    "To be clear, the examiner does not say that this device was responsible for Lehman's collapse. Its demise stemmed from its excessive investments in the US commercial property market and its dangerous reliance on short-term finance that could and was withdrawn."

    It's all part of the same stinky accounting jigsaw Robert!!!

    .... and for me, if the Board 'didn't know' $50 billion of assets disappeared in some quirky, money shuffling, ‘bottle/glass glass/bottle’ bit of accounting, it stinks even more!

  • Comment number 54.

    A new TV series.
    Country cousins and complicit county commissioner's corrupt cost accounting compounds, con-found City Circle. (Wagon Wheels whirl.)

    The Dupes Of Hazzard.(ft.''Gunfight At The OK Moral)

    If your friend in the US had won the Lottery and sent a letter to you here in the UK requesting that you hold some of the money, say because they thought they would get a better rate of interest here....

    Would you resist ???

    Er.Hands up please...

  • Comment number 55.

    53. thinkbe4 'It's all part of the same stinky accounting jigsaw Robert!!!'

    Is it at all possible that policians, on both sides of the pond, want us all to think that naked capitalism stinks?

    Oddly, liberal-democracy and its perennial programme of state cuts is still the only game in town....

    In fact, these cuts have just become even more austere.

  • Comment number 56.

    @52 Statist
    We are slowly getting there.. but surely banks own records would prove exactly who has 'raided the barn' or perpetrated fraudulent crimes in office.
    Drilling down Big Banks have several clients such as rich individuals or corporations holding pension funds for employees etc.
    In the Global picture every single cash movement that comprise the billions should be recorded in Accounting Books to track to the penny (or cent) both credits (winners) as well as debits (losers) at the client level for every single transaction(*)
    *(unless my understanding of DB and CR is incorrect).

  • Comment number 57.

    repo 105 . hmmmm.
    Being of suspicious mind, is it possible the Barclays were also using the same technique and could that explain why they managed to squeak through against all the odds? Surely not.... as a counterparty to the Lehman trades, perhaps ?

  • Comment number 58.

    Rob and Rock
    Now, if 6 turned up to be 9,
    I don't mind, I don't mind.
    Are you trying to prove that
    You're made out of gold and, eh, can't be sold
    So, Are you experienced?
    Have you ever been experienced?
    Well, I have..

  • Comment number 59.

    Maybe all the tasty birds employed in the offices
    were weapons of mass distraction designed to hide
    the big underlying figures or monies

  • Comment number 60.

    56. londonunderground 'We are slowly getting there.. but surely banks own records would prove exactly who has 'raided the barn' or perpetrated fraudulent crimes in office. Drilling down Big Banks have several clients such as rich individuals or corporations holding pension funds for employees etc.'

    But we know the FSA was supposed to regulate, we know the SEC was supposed to regulate. We also know that Brown and Blair promoted light touch regulation and that legislation facilitated this. The FOI applies to pubic bodies only doesn't it?

    What I don't understand is why far more people don't see our current anarchistic conditions as almost identical to those which led to Fascism in Italy, National Socialism in Germany and something very similar in the USA under Roosevelt's NRA. In the 1930s, many in the UK and USA were sympathetic to Mussolini and Hitler's responses to these abuses by speculators. WWII changed all that, and my concern is that the baby was thrown out with the bathwater. Socialism itself isn't evil, in fact, only banksters and the ignorant make out otherwise. We don't hear 'death-camp' noises made about China today, and whilst banksters would have one believe otherwise, China is still Stalinist (National Socialist)!

    Most people aren't discriminating finely enough these days, to all our cost.

  • Comment number 61.

    So much for Gordon Brown claiming that the credit crunch was a wholly American affair. This is obviously not the case.

    What a surpise that in the lead up to the collapse of Lehmans we find a hoard of toxic debt in our own 'cesspit' known as the 'City'.

    We'll be lucky if Brown's shaky weak system of Financial regulation is not yet to be blamed for playing a significant role in the collapse of Lehman's, with the obvious consequences.

  • Comment number 62.

    "Financial engineering" - what a nice phrase for hiding accounts & deceiving the public.
    The Valukis’ Report finds that Lehman's senior exec did what it did "to buy itself more time, to maintain critical confidence.”
    Richard S. Fuld Jr., Lehman’s former chief executive, certified the accounts.
    Mr. Valukas: “Unbeknownst to the investing public, rating agencies, government regulators, and Lehman’s board of directors, Lehman reverse engineered the firm’s net leverage ratio for public consumption.” Valukas then calls a spade a spade (something we need much more of) when he says: Mr. Fuld was “at least grossly negligent.”
    Lehman executives engaged in what the report characterized as “actionable balance sheet manipulation.”
    Repo 105 = boosted the bank's balance sheet by as much as $50B with the intent of securing favorable marks from the credit rating agencies which of course, determine Lehman's access to capital.
    When Lehman collapsed in the fall of 2008, the firm had $25B in capital supporting $700B of assets and liabilities. Wow, this is just incredible!
    Here's the part the really shocked me: Lehman obtained an "opinion letter" from Linklaters in London that said the relevant deals were permissible under English law; so, the relevant transactions were then conducted through Lehman's London offices.
    Linklaters have been accused of negligence in their advice to investment bank Lehman Brothers. Linklaters advised Lehman that under British law a "Repo 105" arrangement to hide $50B of losses was legal, despite Lehman having been told by its advisers in America that the move was illegal. Though "Repo 105" arrangements are technically legal in Britain, Lehman shareholders have instigated legal proceedings against Linklaters for neglecting their fiduciary duty of care.
    The hanky-panky history:
    In 2003, an internal review into accounting irregularities at Freddie Mac found that the government-sponsored mortgage finance firm had periodically rented out its balance sheet to a Credit Suisse Group. The review found that Freddie Mac entered into a series of deals with Credit Suisse that allowed the investment bank's trading desk to unload some $8B in mortgage-backed securities. Over the years, the practice became common (and therefore acceptable?) - borrow money at the beginning of the quarter and invest it in short-term bonds that mature before the end of the quarter.
    "Nobody knows if other banks are doing this kind of thing," said Brad Hintz, analyst at Sanford Bernstein (who was Lehman's Chief Financial Officer in the 1990s.) But he said the question is sure to come up in conference calls with Morgan Stanley and Goldman Sachs Group Inc.
    The mechanism that Lehman used for concealing assets and liabilities was much more complicated than borrowing at the beginning of the quarter and paying down debt at the end of the same quarter. It involved a series of short-term transactions similar to repurchase or repo deals, which entail selling assets and agreeing to buy them back in the future. Instead of treating them as financings, Lehman classified these repo deals as "sales," which permitted the investment bank to keep the transactions off balance sheet. Here is how it worked: Lehman essentially transferred assets to its London unit, which was the only jurisdiction where the bank could get cooperation. At the end of a quarter, Lehman would sell high quality assets to a counterparty - in the report are mentioned multiple European and Japanese banks - for cash. The investment bank typically got cash equal to about 5 percent less than the face value of the asset. Lehman used the cash to pay down debt. At the start of the next quarter, Lehman would buy back the assets and borrow funds again. The net impact - the bank appeared to have lower assets and liabilities, making it appear to have less debt relative to its equity.
    These transactions may have started out small in 2001, but by 2008 Lehman was using them to move major money. The bank did about $50B in the second quarter of 2008, which reduced its reported assets by about 7%. In turn that reduced its leverage ratios by nearly 2 points. On other words these financial shananigans enabled Lehman to look much better its competitors. According to data compiled by Bernstein's Hintz, Lehman's net leverage ratio was 14.7 in the second quarter of 2008, compared with 20.8 for Goldman Sachs. Net leverage excludes repo assets; it looks only at assets compared with equity.
    Lynn Turner, a former chief accountant for the SEC, said the decision by Lehman executives to make greater use of Repo 105 is consistent with what companies do when they get themselves into trouble. "Companies never just fudge it a little bit. They start out just doing it a little bit and over time it grows and grows." While Turner said he was not aware of the Repo 105 transactions during this time at the SEC, he said it is fair "to wonder if anyone else is doing it."
    The larger picture is that when global firms decide to engage in such corporate malfeasance, they will take advantage of laxer regulations outside the United States, which believe me are lax enough already!
    The Lehman case supports French President Nicolas Sarkoszy's contention that global standards are required. At the recent World Economic Forum in Davos, President Sarkozy noted that "from the moment we accepted the idea that the market was always right and that no other opposing factors need to be taken into account, globalization skidded out of control."
    Yes, indeed! I don't think Sarkozy will get global regulations, but by golly, he should be able to get EU regulations that will protect EU countries.

  • Comment number 63.

    @ 60 Statist
    (you may be implying) it was by design and intention supposed to work / fail this way i.e. owg nwo etc

    Regulators were looking in the wrong direction for dirty mafia / drug monies etc because the powers that be were more interested in how much more they could have been getting (instead of being thankful for what they got) and failed to protect the incompetence or fraud by their own banking custodians

  • Comment number 64.

    61. nautonier 'So much for Gordon Brown claiming that the credit crunch was a wholly American affair. This is obviously not the case.'

    What he did was diffuse responsibility - i.e. assert that it was a global problem.

    If it wasn't for the Chinese saving all their money and not floating their currency etc. If it wasn't for all those poor people (and canines would you believe) greedily borrowing money from banks etc.

    The problem is that he, and others like him, don't appear to appreciate that in diffusing all this responsibility they thereby make out that they are powerless to do anything alone, which in turn makes many people wonder what the point of national politicians/government are.

    See how the Socialist International (free-market anarchists - note the absence of China and Russia!) do it?

  • Comment number 65.

    I now understand what rare talent these 'talented' bankers have, which justifies their bonuses. It is to think up such crackpot schemes AND go through with them.

  • Comment number 66.

    63. londonunderground '(you may be implying) it was by design and intention supposed to work / fail this way'

    I reckon regulators have less control not just by design, but because it's all too much for anyone these days. The cat-and-mouse game between lawyers and legislators is one thing (and the lawyers have the edge because of the time it takes to re-legislate) but a deteriorating level of overall ability in our population is another given low birth-rate, more bright females out at work, and high low-skilled immigration. :-(

  • Comment number 67.

    # 48. At 09:21am on 13 Mar 2010, Pamela Read wrote:

    > Anyone who believes that 'The City" will get us out
    > of the economic doldrums is living in Cloud Cuckoo land.


    I've been saying the same thing for years. I've spent the day
    meeting really smart people at a science fair in Manchester.
    These people deal in facts, while the bankers deal with
    childish nonsense words, jargon and fairy stories.

    Look – they're just counting our money up, for goodness
    sake! The City can't get us out of the economic doldrums
    because it's a zero sum equation. You may be able to
    mint fresh money, but you can't mint up the value that's
    meant to be related to the money. It's that simple – we
    need value, not symbols of value.

  • Comment number 68.

    @66. Statist (again)
    Yes the system turned into a monster

    automated trade capture
    automated straight thru processing
    automated straight thru verifications
    automated straight thru confirmations
    automated settlements
    automated reconciliations
    warnings and error reports switched and ignored off (to save paper)
    generational dumb down of business experts due to reliance on technology
    1,000,000's of trades each day in each location in each branch
    all done at broker level with no idea about underlying client deals or underlying assets in funds

    Regulation training was £50 billion is spent on smack each year
    How do you identify and report a smack dealer
    9/11 was caused by terrorists
    How do you identify and report a terrorist

  • Comment number 69.

    #48 Pamela Read

    I couldn't agree more.
    But of course the government's solution, that of applying university know how, actually only makes things worse.
    How so?
    1. the universities know diddly squat about manufacturing.
    But the support agencies love them to bits since they take people off the dole.
    2. the universities self finance by charging foreign students.
    Those same foreign students get UK government grants and then take technology home.

    The combination of 1&2 puts UK tech companies out of business.
    But all the right boxes get ticked.

    And that is before the macro economic effects of state aided university departments shows up in increased prices of our exported goods.
    ie we are not competitive at exporting since our housing costs are way higher than our competitors. Housing costs being inflated by the action of the government/City as a way of getting us all into more debt.
    We need to get into debt to pay for the cheap imports we are addicted to.
    Woe betide the government that eases off the gas pedal and makes us pay our way. With or without a manufacturing base to fall back on the pain will be real. It will not be felt by the government or their banker friends though so everything will work out OK. Yeah right..

  • Comment number 70.

    Working on the premise that the universities are training people here using are best brains (supposedly) and then shipping them back to the low cost countries to directly compete with the UK.
    The question you have to ask is organising this technology stealing?
    The same people that are raiding our pension & life insurance poliees to build new factories overseas.You are funding your own demise thats the plan since 1990.
    They have no intention of maintaining a presence in the UK,its a mature market. All these guys are after is direct access to your payslip in the form of direct debits so that they can syphon off the cash they have just paid you with to move it overseas.
    Thats been the game for the last 20yrs slowly transfering the cash overseas to build up new business operations in emerging new young markets.They had no intention of paying our mortgages off or for that matter providing us with a retirement income its just a scam.

  • Comment number 71.

    Most blue chip companies are running huge pension defeceits, they have no intention of paying out on your pension plans the game is to fold the business declare it bankrupt after working the above scam for 20yrs.
    Your monthly pension contributions have allowed them to build new manufacturing operations overseas, then you just close down the UK operation and say its not viable any more, hey presto scam complete.
    No liabilties to pay out on because the business is insolvent!

  • Comment number 72.

    Nobody is that really naive enough to think there running the pension funds for the benefit of there employees surely. For the company they have a ready access to large funds to expand the business without excessive borrowing of cash from the banks. Its a similar thing with share option schemes but you need to ask were is the cash going to be invested.Thats the sensitive thing which gets lost in the blur of overseas investing by your pension fund manager. He is using your contributions to gamble in deals.

  • Comment number 73.

    Taking money off you the consumer/employee, then calling it there money and using the money transmission system to move it and buy in to high risk foreign investments. In short gambling with your money!
    The plan may have been to make them look incompetant from day one, act stupid con the government, con the employee or pensioner thats just seen his life savings and prudent investments evaporate into thin air!
    Who says there is no morality in business ?, they are reaming the average Joe every day or until the orange is well and truely dry.

  • Comment number 74.

    #70 KeithRodgers

    Asked who was doing the stealing?

    A parliamentary committee asked the same question.
    Report just out a few days ago:

    [Unsuitable/Broken URL removed by Moderator]

    The conclusions AFAIKS was that everybody was making money.
    But nobody knows how much because nobody was counting.
    But the bankers made sure they got their share.
    Everybody else too.
    I mean if there was free money being given away and everybody had turned their back..

  • Comment number 75.

    #70 KeithRodgers

    Asked who was doing the stealing?


    Link is

    [Unsuitable/Broken URL removed by Moderator]

  • Comment number 76.

    Moderators are busy tonight.

    Search for "commons HC 271"

    The report was published on the 9th March.
    And I'm late for the pub.

  • Comment number 77.

    And you still want to blame poor little Northern Rock for the UK's troubles, Robert?

    Good job you spilled some sponsored & unfair beans unnecessarily then, to help enable GB to steal from the little pensioners who wouldn't even know how to sell a share whilst they were ripped off.

  • Comment number 78.

    #64 Statist

    I clicked on your link to SI (Socialist International) and noticed that the current President of SI is none other than George Papandreou aka current Prime Minister and Foreign Minister of Greece!

    http://en.wikipedia.org/wiki/Socialist_International

    i.e. the guy that is currently selling the whole austerity measure package (as a necessity) to the entire Greek nation.

    You just can't make this crap up!

    Funny ol' world...innit?


  • Comment number 79.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 80.

    The blog itself was

    Innnnn..teresting...

    the rest taught me nothing.

    I'M NOT FROM THE "IRONY" GENERATION:)


  • Comment number 81.

    78. DebtJuggler 'You just can't make this crap up!'

    They can, and they do...all the time, as they're Social Democrats!

    Now, before anyone starts mutterting words like 'conspiracy theory', ask yourself, if the USA/Wall Street didn't want the USSR to be socialist, would it be likely to fund/welcome it in Europe via The Marshall Plan and Lisbon etc?

    Massive expansion (dumbing down 5-1% -> 50% in a generation or so) of Higher Education in the USA/UK has just served to muddy the voices of dissent in the wake of massive expansion of the potential for free-speech via the net/web, I suggest.

  • Comment number 82.

    Lawyers must be rubbing their hands in anticipation. The real victims, us, won't see a penny.

  • Comment number 83.

    81. '5-10% -> 50% in a generation or so..'

  • Comment number 84.

    64. At 4:46pm on 13 Mar 2010, Statist wrote:

    61. nautonier 'So much for Gordon Brown claiming that the credit crunch was a wholly American affair. This is obviously not the case.'

    What he did was diffuse responsibility - i.e. assert that it was a global problem.

    If it wasn't for the Chinese saving all their money and not floating their currency etc. If it wasn't for all those poor people (and canines would you believe) greedily borrowing money from banks etc.

    The problem is that he, and others like him, don't appear to appreciate that in diffusing all this responsibility they thereby make out that they are powerless to do anything alone, which in turn makes many people wonder what the point of national politicians/government are.

    See how the Socialist International (free-market anarchists - note the absence of China and Russia!) do it?

    >>>>>>>>>>>>>>>>>>>>>>>>>

    Yes - as I've said on many occasions on this blog - this was abdicating responsibility - I've looked at the above web link and I'm still trying to fathom what its all about - essentially democratic countries are the wosrt at regulating their capitalist economies whereas some state controlled countries have much better 'discipline' (to put it mildly).

    I can't think any other than the politicians have lost control of the City and the UK - we are not now in control of our own destiny.

    When Pres Obama now comes out and sings praises for Goldman Sachs - You may suspect that he must now have been briefed by his aides 'on the quiet' - 'As these Goldmen people are the guys who bankroll every Presidents campaign and will attack e.g. the GB £ on the currency markets to make sure that our US $ currency remains dominant - So please Mr President, Sir - Please back off Goldmans!'

  • Comment number 85.

    Interesting comment from the FSA about insider trading, they think they have a problem! What planet are these guys on?, they have had a problem for years when brokers tip family members off to dump or buy shares that suddenly go down or up in price!
    They have made noises to make it look as though they are tackling the problem but thats about all, it makes the general public think something is being done.
    Make it a crimminal offence for anybody and I mean anybody to pass on information for advantage with say a jail sentence of 10yrs. That should clean up the city and the board of directors. Fear of doing time is a big deterant, but if you are sworn to secreasy you keep stung.
    The private club remember the bowler hats and aprons LOL!

  • Comment number 86.

    Its fair to say that the Financial Services sector is out of control totally unregulated and getting away with financial murder (fraud).
    1)Politicians are supposed to represent the electorate but end up being in the pockets of who ever funds there political campaign, (example being the senators blocking health care reform).
    2)Stockbrokers and company directors that use privaleged information to buy and dump shares while the average Joe takes the hit because he only finds out later.
    3)Investment Bankers that gamble with somebody elses money and pay a very small return to the average Joe and up until now have done very well. Then the credit bubble burst and the full scam was revealed in all its glory.
    4)Insurance Brokers are very effective at clawing back the hard earned cash of every average Joe and piling up the cash for the Insurance Companies and Banks. Then going back to the customer and saying there investments are failing to deliver buy another policy!
    Look at the track record - poor investment returns on a)endowment mortages, b)pensions, c)insurance policies that have more holes in them then a seive.
    5) Realtors (estate agents) pumped up the price of the houses, way above what they are really worth to build equity in everybodies home. Which is now being taken away from every individual and leaving a lot in the USA with negative equity. I read on CNN that a 1/4 of all US homes are now negative, thats a terrible position for a family to be in.

    The question is how do you regulate something which has too many secrets and individuals that are sworn to secreasy by organisations outside normal society rules?

  • Comment number 87.

    10. At 4:57pm on 12 Mar 2010, writingsonthewall wrote:
    Come down - I will be taking a day off work to join in. You can get here very cheaply if you book your train ticket in advance!


    The Police have the demos sorted these days with their kettles and there's a good chance you'll get a kicking.

    Suggest you switch tactics to 'direct action' or wait a few months and there's a chance the police will be marching with you with the rest of the public sector due to their pay freeze.
    If you get a chance ask em where were they at G20 ?

    ps can we put lawyers at the top of the list?

  • Comment number 88.

  • Comment number 89.

    I am not surprised at all on how E&Y auditor signed off without questioning. My friend just got employed by them as a account, with no uni qualification, he's failed twice, no accounting qualification, no experience, he got in cos friend introduced. I wonder how many people got in like that...

  • Comment number 90.

    Went to the right school.
    They give numbercrunchers a bad name
    Sad but true

    I think anyone who makes investment decisions based on an audit report these days needs therapy.

  • Comment number 91.

    But some would say it is unedifying that the deals that buried the $50bn of assets were not permissible on Wall Street but could be done in London.

    It is more unedifying that multi-millionairs and billionaires and companies can be tax-haven resident and pay less taxes, in percentages and some even in absolute terms than people earning a modest four-to-five figure income.

  • Comment number 92.

    http://news.bbc.co.uk/2/hi/business/8566904.stm
    This is the link to the FSA insider trading report, have a read its so hmm how can I put this obvious is the word!


  • Comment number 93.

    84. nautonier 'I can't think any other than the politicians have lost control of the City and the UK - we are not now in control of our own destiny.'

    Just a slight shift in emphasis:- It isn't so much that they have lost control, as released, or devolved, control, i.e deregulated the economy.

    That is the nature of economic/political anarchism or liberal-democracy (sold post WWII as Social Democracy). It requires clever verbal spinning to do this, and to still maintain the appearance of Governance for an electorate. It helps if you can find ways to dumb that electorate down over genetically (e.g. increasing low-skilled immigration, shifting the birth-rate by liberating bright females, etc). It's been going on for ages. :-(

  • Comment number 94.

    92. KeithRodgers Fancy that. Do you remember this?:

    'Toothless watchdog fears as FSA culls staff

    A third of the enforcement workforce will go to enable fewer but better-qualified regulators to be recruited'


    The Times 16th August 2007

  • Comment number 95.

    93. At 6:33pm on 14 Mar 2010, Statist wrote:

    84. nautonier 'I can't think any other than the politicians have lost control of the City and the UK - we are not now in control of our own destiny.'

    Just a slight shift in emphasis:- It isn't so much that they have lost control, as released, or devolved, control, i.e deregulated the economy.

    That is the nature of economic/political anarchism or liberal-democracy (sold post WWII as Social Democracy). It requires clever verbal spinning to do this, and to still maintain the appearance of Governance for an electorate. It helps if you can find ways to dumb that electorate down over genetically (e.g. increasing low-skilled immigration, shifting the birth-rate by liberating bright females, etc). It's been going on for ages. :-(

    >>>>>>>>>>>>>>>>>>>>>

    :-( (Is this Russian punctuation/emphasis?)

    The air-craft carrier HMS 'UK' is/has:

    a NATO member;
    a UN council member;
    a EU member;
    G7 and G20 member;
    most of its business and energy/utilities air traffic now in foreign hands;
    getting on for £2 Trillion in foreign and sovereign debt;
    over-run with foreigners telling us Brits what to do;
    dictated to by celtic chip on the shoulder megla-maniac politicians;
    over-run by internationalised banks;

    I'd say that the UK has been 'taken-over' - Wouldn't you?

  • Comment number 96.

    88. At 5:27pm on 14 Mar 2010, DebtJuggler wrote:

    #84 nautonier

    I fear you may be right!

    Check this out...
    http://www.bbc.co.uk/blogs/newsnight/fromthewebteam/2010/03/friday_12_march_2010.html

    >>>>>>>>>>>>>>>>>>>>>>>>>>>

    I did check it out and its scary

    I think that Pres Obama is a 'decent opportunist' and has had a rude awakening to how the global financial system works (largely in favour towards the US) by having now had the benefit private, of a few behind the scenes 'briefings'.

  • Comment number 97.

    Here is a typical problem:

    Today, Hector Sants of the FSA said "said the FSA would be taking on an extra 460 members of staff" Odd that, as it has been privately suggested to me, that these new staff will not be experienced in the banking industry. Perhaps this is right, perhaps it is not. I can see a good argument that people what have worked in the industry will be part of the problem and unwilling to look at solutions, on the other hand if these new people do not have banking industry experience they might not be able to get to grips with the details of the shenanigans! Somehow I don't think that FSA is capable of getting to grips with the problem unless there is a radical restructuring of the regulatory system.

  • Comment number 98.

    I caught Gordon telling porkies again today on some BBC programme where he was being asked questions by an audience......

    He talked about how the UK was going to do so well out of the new industries, we'll lead the world and all that guff.

    Sadly nobody present seemed to have read the WWF report which compared 27 leading economies in terms of their sales of clean tech products and services so thet couldn't point out that the UK was 20th out of that 27 and was only that high because we sold a lot of glassfibre insulation.

    It was also apparent that nobody had read Malcolm Wicks report on Energy Security where he puts up figures to show that the UK invest not just a bit less but considerably less than all our main competitors in energy R&D and says he thinks this may be partly due to us not having a major industrial base in energy.

    Doesn't bode well does it. However the next time the BBC interview Brown like this can I come along because apart from all the above I really really want to ask him why he flogged the UK's only nuclear power station reactor builder to the Japanese twenty minutes before announcing the need for the UK to build more nuclear power stations.

  • Comment number 99.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 100.

    86. At 4:57pm on 14 Mar 2010, KeithRodgers wrote:
    What you want to do is read about John Christensen of Tax Justice Network - there are a couple of online videos.

    IMHO threatening economic well-being of entire populations is wore than fraud, it is an act of war. We need to reassess exactly what and who is threatening our and European security. Who is more dangerous to the well-being of masses of people, or whole nations? Osama or the traders?

    Get politically active and hold our MPs to account. Start a Skeptics in Westminster where you live and get educated, while you are getting active. They'll get the backbone to stand up for this country when we demand that they do, when we refuse to be fobbed off by the words of not banking and corporate experts, but the destructive thickos they have shown themselves to be. Being stupid is no defense for criminals.

    This is our democracy. Not theirs. We, as the tax paying public can have the kind of country we want rather than what they give us.

 

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