Thursday, June 19, 2008

Financial Hocus Pocus II

On April 17, 2008, I shared the news with my citizens that Goldman Sachs had write downs of 3.7 Billion dollars for the first quarter of 2008. On June 7, 2008, The King Reported that Goldman had issued 17.80 billion in municipal auction rate securities of questionable value. Now, because of the open door policy of the Federal reserve and the ability to exchange mortgage backed securities for United States government treasuries and by invoking statement 159 of the FASB, Goldman magically produced 2.05 billion in profit. You do the math.

How can Goldman make a profit when 42 banks have had to raise 120 Billion dollars just to stay in business?

On another note, now that two Bear Stearns funds managers have been arrested, will executives of Trans Union, Equifax and Experian be the next to face civil and criminal charges. Credit rating agencies MBIA and Ambac are the fall guys for Mortgage Backed Securities and may face civil and criminal charges. The consumer credit rating agencies played a direct and complicit role in rating consumer credit. The FICO system was either fraudulent or defective or both.

King George
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