Is the World Already Broke?
Or, Is International Banking a Criminal Enterprise?
First I need to be clear. I have no axe to grind with bankers or banks. Most I have dealt with do a good job, and in a ethical manner. Not to say there are not a lot of incompetents but that is another story. But that’s retail level banking.
But this story broke yesterday —
Forget the perfectly anticipated Greek (selective) default. This is the real deal. The FT just released a blockbuster that Europe’s most important and significant bank, Deutsche Bank, hid $12 billion in losses during the financial crisis, helping the bank avoid a government bail-out, according to three former bank employees who filed complaints to US regulators. US regulators, whose chief of enforcement currently was none other than the General Counsel of Deutsche Bank at the time!
And the observation, though more for flourish, may actually be accurate —
Or actually, since every bank in the world is forced to lie, cheat and mismark its own balance sheets every single day, not least of all the European Central Bank which as of moments ago has to accepted defaulted Greek bonds as collateral, this may just be completely ignored.
After all opening this particular Pandora’s Box may well reveal that not only DB but the world’s entire financial system is completely and totally insolvent.
Here in a nutshell we have lying, falsification, double dealing and revolving door. Only thing missing is sex and I am not sure there. Its so bad I think this should be made into a reality TV series — The Derivative. A dozen banking nymphs jet around the world trying to sell fungible financial instruments on unsuspecting executives.
Here we have a bank that doctored its SEC filings to avoid any taint of being touched by the TARP bailouts. Which is kinda odd since DB could have given the money back a year later and been none the lesser for it. Unless of course the strings attached to the funds would lead to the discovery of an even bigger mess at DB than they were willing to admit.
This is just another case that can be made for anti trust action against the big banks. The bigger question is of course is the world already insolvent?