Silly talk about the size of the City has merely created fog obscuring 2 real issues

[Black Swan]

Good stuff from Bill Emmott - former editor at The Economist;

The three worst words of all: ‘off balance sheet’

For all the endless chatter about “efficient market hypotheses” and other nonsensical notions of market perfection, what banks were actually doing in the run-up to the crisis was concealing their securities holdings and operations as much as they could. As Enron should have taught us seven years ago, the most deceitful words in the English language are not “the cheque is in the post” or even “of course I will love you in the morning”, but rather “off balance sheet”.

The three worst words of all: ‘off balance sheet’ | Bill Emmott - Times Online

 

[GammaJammer]

Nothing new in that old lie though - as old as derivatives themselves.....

 

[squall321]

banks screwing everyone over shocka

 

[Black Swan]

Nothing new in that old lie though - as old as derivatives themselves.....

The irrational euphoria that's (partly) come back for retail investors will be severely tested over the next few months IMHO. There has to be a second leg down surely? 2010 will be the year recession issues are felt amongst the general population...

 

[london_lad]

They also use accounting treatment of such toxic/**** securities, by declaring them as HTM (held to maturity). By doing that, they dont have to mark them to market for quarterly and annual reporting, but based on their actual cost, and on an ongoing basis depreciate them slowly until they get rid of them. This is transferring current loss into next 15 to 20 years. Why do you think banks haven't started lending or taking risks when they have so much monoply money on their balance sheets (now)?

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