Category Archives: Financial

Lehman bankruptcy blamed on fuzzy accounting

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Accounting gimmicks moved liabilities off the balance sheet while CPAs Ernest and Young approved statements

Dick Fuld former CEO Lehman Brothers

By Ryan McCarthy,  Huffington Post

Lehman Bankruptcy: ‘Repo 105,’ Firm’s ‘Accounting Gimmick,’ Was Like ‘A Drug,’ Emails Show

The arcane “accounting gimmick” employed by Lehman Brothers as the firm failed in 2007 and 2008, was like “a drug” propelling the bank to conceal the true nature of its financial health, according to bankruptcy documents released yesterday.

As news organizations pore through the 2,200 pages of documents released by Anton Valukas, the examiner in charge of sifting through the most expensive bankruptcy in history, new details have surfaced about possible criminal actions by Lehman executives.
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Is Goldman Sachs profiting from financial crisis in Greece

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Even worse, are they and other US banks the cause of Greece’s financial dire straits?

SEC Ben Bernanke made the comments while testifying on the US economy photo: BBC

Testifying yesterday before the Senate Banking Committee, SEC Chairman Ben Bernanke said the Goldman Sachs and other US banks are being investigated for potentially setting up the current crisis in Greece. To top it off, Goldman is suspected of shorting the finances of Greece, betting that the economy will fail.

Bernanke told the Senate Committee that Goldman, over a ten year period, set up sophisticated credit arrangements that disguised the true nature and amount of Greece’s debt.

“We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Bernanke said, testifying before the Senate banking committee.”

“Addressing concerns that financial firms have been engaging in trades to bet on a Greek default, Bernanke said that “using these instruments in a way that intentionally destabilizes a company or a country is counterproductive, and I’m sure the SEC will be looking into that.”  Washington Post
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Next ten years will likely wipe out retirement dreams

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If you thought the last 10 years were rough on retirement savings, fasten your safety belt

RBC is reporting the obvious today – RRSP contributions to continue declining through 2020, says RBC Economics

The reasons were predicted in 1996 by Economist David Foot. The Baby Boomers who fueled the post war economic boom are going to earn less, spend less and stop saving.

Population Projections for Canada, Provinces and Territories 2005-2031 Statistics Canada

Population Projections for Canada, Provinces and Territories 2005-2031 Statistics Canada

The chart above shows the trend under worst, average and best case scenarios – sometime between now and 2015 there will be more retired people and fewer working people.

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Worst decade for stocks in history

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Since End of 1999, U.S. Stocks’ Performance Has Been the All-Time Clunker; Even 1930s Beat It

From Wall Street Journal

The perpetual lie from smooth talking mutual fund and brokerage ads has been exposed. You will not likely earn 17%, 13% or even 7% annually from the stock market.

The Wall Street Journal reports that from 2000 to 2009, the return from the stock market has been negative not positive.

“The U.S. stock market is wrapping up what is likely to be its worst decade ever.”

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