Accounting loopholes used by bankers to 'inflate profits' (and their bonuses)!

Following on from my recent post about the locusts, leeches and vultures in our society (i.e. financial services companies and lawyers) a report has been published today by the Adam Smith Institute showing how banks (the locusts) use outdated/flawed accounting rules to fictitiously boost profits in order to maximise their bonuses.

The report highlights how technically insolvent banks are using IRFS accounting rule annomalies to report massive profits by using expectations of future values when calculating/reporting profits ... to make it look as if they are not insolvent and to make it look as if the bankers are making lots of money (in order to boost their own individual bonuses).  Yet many of these assets, contrary to increasing in value can easily, and in fact do (as we have seen!), become worthless.
  

The report highlights how the 'financial engineering' going on in banks is no more than a legalized scam/ponzi scheme (e.g. Credit Default Swaps) and how it's effectively fraud (which compliments/augments the legalized counterfeiting they also undertake)! It also highlights how politicians and regulators are doing nothing to tackle the anomalies in the accounting procedures to stop them from doing this in the future.  

The report also exposes how the ratings systems not only allow, but positively support, them making up and using 'fraudulent' financial vehicles to fictitiously drive up profits (by giving scam 'products' triple AAA ratings),  whilst making it very difficult for hard-working small/medium enterprises to get a loan (due to not giving them triple AAA ratings and/or no rating at all). This makes it easy, and much more lucrative, for banks to 'manufacture profits' from 'financial products' (or 'vehicles'), rather than generate profit by lending money to an enterprise working hard to manufacture 'real products' (e.g. real 'vehicles')!

So what are the Government doing? ... Well rather than tackling the problem at its source (e.g. by starting to address the flawed rules/systems that allow such scams to go on), they have instead said they are going to set a little bit of taxpayers money aside (i.e. your money!) for small/medium businesses (whipppeee)! ... and at the same time they are preparing for the next bank bailout - which will occur when the value of all these fictitious financially engineered products actually prove to be worthless (and when the current commodity boom they are currently pushing also goes bust). With 'ring-fencing' effectively put into the long grass by politicians*, nothing of any substance will have been implemented to protect the taxpayer before the next collapse (currently being driven by the bankers).

The end result ... mega-rich bankers/speculators ... bankrupt nations/taxpayers. 

The process ... legalized fraud, robbery and counterfeiting ... endorsed by corrupt politicians and law makers (n.b. lobby groups such the CBI also lobby heavily on behalf of banks, claiming they are the 'Voice of Business', when due to the vast amounts of money given to them by the banks, they are really the 'Voice of Banks').

In China such people would be tried for economic sabotage ... and, if guilty, hanged ...

So when will people in the Western World realize what is happening and start to demand action ... a couple more years perhaps? ... when the next bailout is required?

Well, whatever the timescale, the bankers are clearly looking to make hay while the sun shines (i.e. taking a shedload of your future wages - i.e. the taxes they will take from you in the future to pay for previous/future bailouts) ... whilst the politicians/lawyers try to put up barriers, blow up bridges, and get their lifeboats ready ... so when people do finally realise what's actually been going on they won't be able to reach them ... or their corrupt bank friends!

* David Cameron has put plans for any ring-fencing at least 5-10 years away, and he also put aside our national interests last week when trying to protect his banking friends in the City from any regulatory changes taking place in Europe.

Locusts, Leeches and Vultures

Financial Services companies are locusts in society, and if anyone is still in any doubt about the level of greed/immorality of bankers then they need look no further than the latest news about HSBC mis-selling bonds which systematically stripped vulnerable old people of their hard-earned money/nest eggs ...

At the same time, ambulance chasing lawyers are like vultures, chasing any opportunity to profit from someone else's misery and pushing people to make fictitious claims (e.g. whiplash injuries). It is almost ironic that lawyers are trying to feed off the locusts now too, following the widespread mis-selling of insurance (PPI) by banks ... 

Oh what a corrupt, rotten, immoral world we live ... and whilst we are on this topic let's not forget the immoral behaviour of Insurance companies, the leeches, who have recently been exposed for profiting heavily from passing on the details of accident victims to ambulance chasing lawyers (and in the process pushing up car insurance premiums).

These leeches promise the world to get their hands on your money, but when there is a risk of paying any money back they'll use any trick in the book to wriggle out of it.  For instance it has recently been revealed how the vast majority of insurance companies aren't checking prior accidents/claims before providing car insurance (despite it costing pennies and being really easy to do) because they prefer to take a huge chunk of people's money knowing that they'll never have to pay any of it back (nb they carry out these cheap/simple checks as soon as you try to claim, and then use this to relinquish themselves of any liability).

The current state of the economy is due to successive inept and corrupt Governments choosing to believe financial services (e.g. casino banking, counterfeiting banking and insurance companies) to be the key to the future prosperity in the UK ... when in reality, just as locusts, these groups systematically destroy value, not add value, to an economy!

Unless these people are stopped and made to pay for their actions, they will bleed the country dry and the vultures will feed off any remains. The bankers and insurance executives will then try to push themselves onto other emerging economies to feed/leech off them (but places like China have already seen right through them - and anyone found trying to destroy their economy like the bankers have here would be tried for economic sabotage and hanged).

Hoping for growth - from corrupt service industries?

As manufacturing starts to wain, and retail sales and consumer confidence continue to fall, are we going to see politicians once again try to highlight (and rely upon!) 'potential growth' arising from the UK's 'expertise' in the service sector?

Well if they do, they won't refer to the hard-pressed and hard-working retail sector ... but the corrupt practices of groups such as insurance companies and 'no-win no-fee' ambulance chasing lawyers ... who, by actively conniving together (e.g. insurance companies referring people to pushy ambulance chasers!), have forced up already sky high premiums by nearly 40% this year ... 

The lawyers pocket £1000's in fees, and the insurance companies charge all costs back to the motorist.  On top of this, the practice of insurance companies referring accidents to accident lawyers* is also making them 4x more profit than from providing insurance premiums - a shocking revelation. In effect insurance companies are now more keen to be a claims management company than an insurance company - to the detriment of all motorists.

Many people are now charged far more for car insurance than their energy** (value = keeping warm, cooking and washing etc) ... with the average insurance bill set to exceed £1000 by 2012. Insurance premiums are colossal - yet they add no value. Insurance companies call it 'piece of mind', but get Government to enshrine its purchase in law to force you buy it!

Insurance companies and no win-no fee lawyers are parasities - who leech off hard-working people and who destroy real value/wealth creation in this country! So why do politicians allow such scams to continue ... well because they are lobbied heavily by insurance companies ... and because many politicians are lawyers themselves!

Combining these parasitic organisms with the corrupt practice of banks will cause this nation to implode (i.e. collapse) ... not 'grow' ... and if politicians think we can solve the country's problems by exporting these 'services' abroad they are even more deluded ... 

The leeches in our society know no bound ... and need to be driven out ... just like a plague of locusts/rats ... 

      

* Even Jack Straw, a Barrister and ex Justice Minister himself, has said this practice is a racket and must stop!

** Despite energy prices also shooting up, and energy companies being referred to the competition commission!