Stocks look to end the week in the black as the DOW has gained some 50 points or about ½% since Monday while the NASDAQ added 40 odd points or a bit less than 2%. The big jump in February retail sales +.3% as per the Census Bureau was the big headline. A number that benefited from a very easy year ago comparison, tax credits and a revised lower January figure, so while it is a good number its not as great as the headlines suggest. The ECRI Weekly Leading Index continues to slip, though at a slower rate, the smoothed annualized growth rate slipped to 13.1% last week the top line number increased to 130.6. The Fed’s latest Flow of Funds report is out, I’ll try and cover it on Monday.
Seems the Europeans are smart enough to block big US investment banks from sovereign debt underwriting following the parade of less than ethical behavior demonstrated by said banks of late. This pushed Goldman and JP Morgan Chase out of the top 10 though Morgan Stanley Managed to make the cut. Lack of ethical business standards leads to loss of business, something we need to see a lot more of.
What I really wanted to talk about today was the Lehman Brothers Bankruptcy Examiners Report, 2200 pages detailing the banks demise. A lot more material than I can cover here, a link to the report will be on my Blog if you’re interested. In a nutshell it is a parade of hubris, executive incompetence, accounting gimmicks, the use of derivatives to inflate the balance sheet, ala Greece and good old-fashioned greed and stupidity. Just like Enron, Worldcom and the other corporate frauds, the executives starting with the CEO Dick Fuld had no idea what was going on of course. The major accounting firms complicit in the previously mentioned corporate frauds played a central role in this one as well and like the credit ratings agencies, well frankly they can’t be trusted either particularly if you’re an investor. Once again the regulators demonstrated they couldn’t identify a duck even after it was dropped in their lap along with a complete description. The media prove once again that they are cheerleaders first and factual investigative news reporting outfits second, can’t alienate the nice folks on Wall Street that buy all that commercial airtime or to quote Rupert Murdoch who owns Fox News amongst other outfits “were all about ratings” as the courts agreed truthful reporting isn’t necessary. Of course we as taxpayers get to pay for this parade of what is increasingly looking like outright criminal behavior, but at this juncture frankly that isn’t all to surprising.
Sources:
JPMorgan, Citigroup Helped Cause Lehman Collapse, Report Says
Bloomberg | Linda Sandler, Bob Van Voris and Don Jeffrey
and
Wall Street Journal | Mike Spector, Susanne Craig, Peter Lattman
Examiner: Lehman Torpedoed Lehman
The report all 2200 Pages….
Lehman Brothers Holdings Inc. Chapter 11 Proceedings Examiner’s Report
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. Much like my daily radio show on KPIG 107.5 FM in Santa Cruz California and KPYG FM 94.9 Cayucos/San Luis Obispo California. A thousand Blogs were able to spot the current problems and many began discussing it years before it reached crises proportions. While there were exceptions, and these exceptions are becoming more common, the mainstream media failed to get it and largely continue to do so.
