KPIG Radio / The Profit Motive May 27

Despite mixed economic data stocks enter the final hour with large gains. 1st Quarter GDP was revised down to 3%. Initial claims for unemployment fell again; the 4-week moving average increased 2,250 to 456,500.

The Wall Street Journal is out with another piece detailing the big banks use of Repo transactions to make themselves look financially sound when in fact the are anything but. The Repo-105 like transactions, these were instrumental in brining Lehman down, were supposedly mistakes as per statements by B of A and Citigroup who have routinely used these transactions for years. Along with Deutsche bank there is a clear pattern of deliberate balance sheet manipulation as per the WSJ Piece that sources the Federal Reserve for the Repo 105 data.

Lehman is suing JP Morgan for 5 billion alleging that they deliberately caused Lehman’s bankruptcy by illegally extracting 8.6 billion in the last 4-days, I guess there is no honor amongst thieves. Lehman is also suing Barclay’s PLC under similar circumstances related to Lehman’s collapse, looking to recover 11.2 billion. Following the March report on Lehman’s bankruptcy by court-appointed examiner Anton Valukas.

On the subject of court cases the criminal probe against AIG executives has been dropped by the Department of Justice. Like William Black said the best way to rob a bank is to own one and apparently this applies to insurance companies as well.

All the better if you can get the taxpayers to foot the bill and pay your bonuses at the same time. Despite all this we still don’t have any real financial reform, our elected representatives are still walking around the financial sector like they’re on eggshells because its business as usual both on Wall Street and Pennsylvania Avenue as the banks loot the nation with help from our elected representatives while your average American gets thrown under the bus.