Who Polices the Financial Police?

 Posted by on April 19, 2011  Add comments
Apr 192011
 

Moody’s

Fitch.

Standard and Poors.

What a miserable-sounding bunch.  If I had to write a Western, those are the names I’d use.  Moody and Fitch, the two back-shootin’, dry-gulchin’ no-account, rattlesnake gunslingers.  Standard and Poors, the bank that sent Moody and Fitch out to shoot up the widda’s homestead.

Jest a mite past noon, I fell a-talkin’ — sorry.  I got carried away there for a second.  At lunchtime, I shared a coffee with my good friend Wrinkly Joe, and the conversation came around to the ratings agencies that pronounce on the creditworthiness of entire countries.

Who are they? I asked.

Fuckers who get paid to say things, he replied.

What.  You mean they say anything they get paid to?

Yep.

So if it suited some big finance guy to downgrade Ireland’s credit rating, all he’d have to do is slip Mr Fitch and Mr Moody a sizeable wedge and they’d call us a crowd of gobshites?

Pretty much.

Now, these three agencies, until very recently, were rating Irish banks and Irish sovereign debt as AAA, which means prime debt.  They thought Ireland was a cast-iron bet.  Therefore, as Wrinkly Joe pointed out, they showed the same degree of curiosity about the Irish banks as the auditors did.

Back in 2006 and 2007, when a travelling roadshow of money was making its way around Dublin, going from bank to bank to make their balance sheets look healthy when their audit date came due, certain well-known accountancy firms had responsibility for making sure that the Irish banks were operating a clean business.

Now, as it happens, WJ is related to an accountant who is utterly baffled by what happened.  He can’t understand how the auditors could have walked into the banks and failed to notice that they took in a deposit of a billion euros yesterday from another bank.  He can’t understand why they didn’t come back to see the billion euros leave the bank by the back door as they left  by the front.  He can’t figure out how they missed the €80 million loans to Anglo’s chairman or the fact that another bank took them over for a few hours while the auditors were in the building.

These are big names we’re talking about.  KPMG , Pricewaterhouse Coopers and Ernst & Young.  I’m not an accountant, much less an auditor, but the very same questions occurred to me.  What were these people being paid to do?  What did they think their role was?

There are methods of finding out if a company has been trading fairly, but for some reason, these top firms didn’t seem to use them.  Why?  Most auditors will look at your books, and if they can’t understand what you’ve been doing, they won’t sign off on your accounts.  But not these boys.  Not the auditors who looked over the books of Anglo, Irish Nationwide, Bank of Ireland or AIB.

No indeed.  These boys didn’t see any reason to dig into the accounts for the previous year.

What sort of conversations took place in the offices of the people who ran our banks?

Auditor : Could I just ask you about this large transfer of funds ..?

Bank chairman : Look over there!

Or did the conversation go

Hi, Seán.  We’re here to have a quick glance over the old bookaroonies, if that’s not too much trouble.

No probs, fellas.  I’ve got a table in Shanahans for one o’clock, so don’t be all day about it.  We had to invite old Neary as well, but that’s life.  He can regulate the cocktails.  Yuk yuk yuk.

And meanwhile, who was regulating the big auditing firms who somehow failed to notice that there was a gigantic hole in the balance sheets of all the banks?  When Lenihan said we all lost the run of ourselves, was he including those at the top of the financial heap, or just us little people?

 

_____________________

Published today:

Commission of Investigation into the Banking Sector in Ireland

 

 

  26 Responses to “Who Polices the Financial Police?”

Comments (26)
  1.  

    It’s farcical. Running one of these frauds is a licence to print money.

    Take the case of the today’s discovery that the US will never be able to pay its sovereign debts. Many people have been pointing this years, nay decades.

    Then a) S&P points out the obvious and the market does its usual pavlovian panic. b) People who shorted the dollar and stocks make a packet. Prove to me that b) didn’t have early knowledge of a). I

  2.  

    I beg to differ, Pope. The US most definitely WILL be able to pay all its debts. Unlike Ireland, the US has no obligations that are not in its own fiat currency. It has promised to pay back dollars, and as long as it owns a printing press, then by golly it can pay out as many dollars as it likes. The dollar is not backed by gold, silver, land, or required to match the price of a loaf of bread or a litre of milk or petrol. Its value is not determined by the EU or the German government. Its just a piece of paper.

    Unless the US borrows in a foreign currency, it won’t default, because its easier just to pay back the debts in devalued dollars that they keep printing. The real value (ie: purchasing power) of the dollar will decline, of course, but that’s the problem of the poor sods who are stuck holding them – the poor, the elderly,.foreigner trade partners.

    Now foreign trade partners may well decide that they are tired of this funny money at some point, but it hasn’t happened to date because nobody trusts any other currency either, so the dollar remains accepted worldwide. Until that changes, no problems for Uncle Sam.

  3.  

    Here: http://www.reformation.org/rome_steals_us_lands.html
    US public land and mineral rights. That’s allegedly what’s backing US debt. I’ll hazard the same is true for Irish land and mineral rights, and Irish debt issued out at the ECB discount window. Only thing is we don’t have the biggest military in the world to defend against our creditors. We’ve got the spineless pussies we elect each and every time instead, and the few rusting pikes in the few thatches aren’t much use when your vote as a member state is suspended as it can be under Lisbon in the case of those MS that are deemed to be endangering the currency union through their financial delinquency . The meek shall inherit the earth? I doubt that was the correct translation from the Q document. More like ”a faceful of dirt” imo.

  4.  

    Ratings agencies, accounting firms, brokerage houses, investment banks – one big cluster fuck. And guess who gets bent over a railing for the high hard one. Yea, Joe Soap, that’s who.

    That is because finance, worldwide, is a two-tiered system. Global consumer capitalism for you and I and socialism for the above mentioned. Capitalism, as currently construed and practised on the world population is a dimwited ponze scheme predicated upon a rank impossibility; endless growth. Ireland hit the wall, the US, Portugal, Spain, Greece, the rest will follow. The Chinese think they have it figured; how to cash in without hitting the wall. They have a surprise coming. The collapse is built in. That is why these financiers are not willing to expose themselves to the ruthless lunacy that is capitalism. They get tax breaks, subsidies, bailouts – in a word, socialism. “A rising tide floats all boats.” No shit Sherlock, but Joe Soap dosent have a boat, so he drowns. Socialism, we are told, isnt good for us. Our tax dollars spent to support the weaker members of society will make us lazy. But the big guys, 1% of the population, they are too big, too important to stand on their own two feet. They require us, and our taxes, to keep them afloat, no matter what they do.

    Now the Icelanders, they have an idea. Tell the international investment bankers to blow themselves. What!? Threats abound, how dare they, investment banks in Britain and Germany and who knows where else call on the World Bank and the IMF to step in and tell this piss ant sovereign nation that it better pay up or else. Or else what? If Iceland stands alone, I guess we will find out. But what if the other nations followed suit? I know, they wont, but what if? The Icelanders were allowed to vote the issue, as oppossed to the rest of us who had it dropped on us from above without so much as a ‘by your leave.’

    Iceland’s government must still be accountable to the people. How, in this day and age of governments as wholly-owned corporate subsidiaries, has Iceland remained a free society?

    And dont worry, Spike. As we speak the US govt is descimating the american middle class and cutting the rug out from under the poor, the sick, the elderly. All in the name of ‘debt service.’ Our own tax dollars can and will be used for this, and military, govt and corporate support but the weaker members of our society have been thrown under a bus. Lest we get lazy, dont ya know.

    So ‘Uncle Sam’ may be OK, and his global corporate overlords pleased. But Joe Soap, here as in Ireland, is getting fucked to death.

  5.  

    No argument, rmari. I think it’s a disgrace, and I was (and am) strongly in favor of liquidating insolvent banks. I think Lenihan’s actions were a thundering disgrace, and said so at the time (I work in finance, it wasn’t hard to see how bad an idea it was). I think what both parties in the US are doing to the middle and working classes (and have done for 30 years) is a crime.

    But in the end, we all have to look in the mirror as well. FF et al were only able to get away with this because we allowed them to by re-electing them. They bribe us with the mirage of a housing boom or cheap insurance, and we can’t or won’t see that we’ll end up paying for it, plus the cut that they and their cronies siphon off the top. We elect FG/Enda and he ignores the mandate. Americans keep alternating between Democrats and Republicans, but neither do anything to serve the interests of the electorate over those of corporate America. Obama promised change, and is in many ways indistinguishable from Bush. They are never, as a class, held accountable by the electorate.

    Elect independents, who promise specific action, and remind them that you’ll throw them out on their arses too if they don’t follow through. Demand that power be devolved from the Dail and back to the local level. And most of all, as was raised on this site before, think critically – especially when some political hack is offering a “free” lunch (or mortgage).

  6.  

    Spike, that’s a good point. However the latest little speculative flurry is a further indication that the dollar is falling off it’s perch as a world currency. The Chinese are pushing for a kind of Keynesian special drawing rights international currency because they suspect their dollar holdings will largely evaporate when the dollar crashes. If this gets traction then the dollar will collapse and however much they print, they will still be liable for debts denominated in other currencies.

    It’s rather similar to what would happen here if this country left the Euro. Our debts would still be in Euros and the borne-again Punt would be depreciating rapidly as we print more of the stuff. Whichever way you slice it, repudiation of debts is the only way forward sooner or later.

  7.  

    Who polices the Financial Police? Why, the Financial Police Police, of course! But who polices them…

    Like your Western there, Bock, although I don’t think that a bank would call itself “Poors” – even though that’s what it makes all of its clients. Not a good marketing strategy.

    Pope: “Running one of these frauds is a licence to print money.” Just like the American Govt. Madoff said that it’s the biggest Ponzi scheme. Well, that’s not exactly the same as printing money – just paying old investors with new investors’ money. Just another kind of fraud.

    Spike: I think that foreign trade partners are deciding that they are tired of this funny money. China and Russia I read have agreed to do trade in each others currencies, for example.

    John:

    “The meek do inherit the earth, but they tend to inherit very small plots, about six feet by three.” (Robert A. Heinlein)

    In the words of Mordred, the half-brother of King Arthur in Camelot: “it’s not the earth the meek inherit, it’s the dirt.”

    http://www.revneal.org/Writings/meekness.html

    (A Christian page – the doc really wants to say that the “meek” are not like this…)

  8.  

    Rmari: good comment. Those who have will do whatever they can to keep it and get more. Endless growth – yes. A stock’s price drops because the company didn’t make as much as last year, or as much as experts thought they should. Even though they made a shitload of money anyway. But it wasn’t MORE money.

    Money Song – Pink Floyd

    Money
    Get away
    You get a good job with good pay and you’re okay
    Money
    It’s a gas
    Grab that cash with both hands and make a stash
    New car, caviar, four star daydream
    Think I’ll buy me a football team

    Money
    Well, get back
    I’m all right Jack
    Keep your hands off of my stack
    Money
    It’s a hit
    Don’t give me that do goody good bullshit
    I’m in the high-fidelity first class travelling set
    I think I need a Lear jet

    Money
    It’s a crime
    Share it fairly
    But don’t take a slice of my pie
    Money
    So they say
    Is the root of all evil today
    But if you ask for a raise
    It’s no surprise that they’re giving none away

    elyrics.net

    Python Monty – Money Song Lyrics

    I’ve got,
    Ninety thousand pounds in my pyjamas,
    I’ve got forty thousand French francs in my fridge,

    I’ve got lots of lovely lire,
    Now the Deutschmark’s getting dearer,
    And my dollar bills would buy the Brooklyn Bridge.

    There is nothing quite as wonderful money,
    There is nothing quite as beautiful as cash,
    Some people say it’s folly,
    But I’d rather have the lolly,
    With money you can ma-ake a splash.

    There is nothing quite as wonderful as money
    (money money money)
    There is nothing like a newly minted pound
    (money money, money)

    Everyone must hanker for the butchness of a banker
    It’s accountancy that makes the world go ’round
    (round round round)

    You can keep your Marxist ways
    For it’s only just a phase
    For it’s money makes the world go round
    (money money money money money money money
    money money)

    stlyrics.com

  9.  

    Shite. And I always thought that crack was an original. Just goes to show like the oul Greek said nothing new under the sun. Or was that Proverbs can’t remember

  10.  

    Ecclesiastes as it turns out. Tch. All is vanity and grasping at the wind indade. Sorry Bock blowin a bit too hard here I’ll back off.

  11.  

    So the ‘meek’ are those like horses who’ve been broken by God then. Well karma or God live long enuf and that’d describe pretty much everyone. Thanks for the links. And the words. Nothing like Floyd is there? Greatest band in the multiverse. Hadn’t heard the Python one either. OK bye.

  12.  

    I think that the idea is that meekness is not a weakness, but rather submission from a place of strength. The question is always whom to submit to.

    Since you likes da lyrics (pardons, Bock, here’s some more. A little long, but…

    Gotta Serve Somebody – Lyrics
    Bob Dylan

    You may be an ambassador to England or France
    You may like to gamble, you might like to dance
    You may be the heavyweight champion of the world
    You may be a socialite with a long string of pearls.

    But you’re gonna have to serve somebody, yes indeed
    You’re gonna have to serve somebody,
    It may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    Might be a rock’n’ roll adict prancing on the stage
    Might have money and drugs at your commands, women in a cage
    You may be a business man or some high degree thief
    They may call you Doctor or they may call you Chief.

    But you’re gonna have to serve somebody, yes indeed
    You’re gonna have to serve somebody,
    Well, it may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    You may be a state trooper, you might be an young turk
    You may be the head of some big TV network
    You may be rich or poor, you may be blind or lame
    You may be living in another country under another name.

    But you’re gonna have to serve somebody, yes
    You’re gonna have to serve somebody,
    Well, it may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    You may be a construction worker working on a home
    You may be living in a mansion or you might live in a dome
    You might own guns and you might even own tanks
    You might be somebody’s landlord you might even own banks.

    But you’re gonna have to serve somebody, yes
    You’re gonna have to serve somebody,
    Well, it may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    You may be a preacher with your spiritual pride
    You may be a city councilman taking bribes on the side
    You may be working in a barbershop, you may know how to cut hair
    You may be somebody’s mistress, may be somebody’s heir.

    But you’re gonna have to serve somebody, yes
    You’re gonna have to serve somebody,
    Well, it may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    Might like to wear cotton, might like to wear silk
    Might like to drink whiskey, might like to drink milk
    You might like to eat caviar, you might like to eat bread
    You may be sleeping on the floor, sleeping in a king-sized bed.

    But you’re gonna have to serve somebody, yes indeed
    You’re gonna have to serve somebody,
    It may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    You may call me Terry, you may call me Jimmy
    You may call me Bobby, you may call me Zimmy
    You may call me R.J., you may call me Ray
    You may call me anything but no matter what you say.

    You’re gonna have to serve somebody, yes indeed
    You’re gonna have to serve somebody,
    Well, it may be the devil or it may be the Lord
    But you’re gonna have to serve somebody.

    sing365.com

    Bye!

  13.  

    I’ll consider this further and get back to you if I’ve anything to say. Cheers.

  14.  

    I’m considering this now – actually just read it thru for the first time. Hope that this is not too much of a diversion. I thought he was referring to the devil and the Lord homiletically – but I see that he had a “Christian period”:

    i’m a huge Dylan fan but am very disappointed with his christian period. He used to be a freedom fighter, he exposed hypocrisy in all its forms, the kind of man you would never expect to kneel before anybody or to be brainwashed. It’s a good thing he returned to his former self afterward. I remember an interview where he was asked what religion he believed in and he answered – i believe in myself. Now that’s Bob Dylan.

    OnlyAPawnInTheirGame
    03-29-2011

    (interesting that this comment thread was started in 2004, and it took over 7 yrs for someone to make this comment).

    Also, http://en.wikipedia.org/wiki/Bob_Dylan#Religious_beliefs

    http://en.wikipedia.org/wiki/Bob_Dylan#Born-again_period:

    In the late 1970s, Dylan became a born-again Christian[160][161][162] and released two albums of Christian gospel music. Slow Train Coming (1979) … produced by veteran R&B producer, Jerry Wexler. Wexler recalled that when Dylan had tried to evangelize him during the recording, he replied: “Bob, you’re dealing with a sixty-two-year old Jewish atheist. Let’s just make an album.”[163] The album won Dylan a Grammy Award as “Best Male Vocalist” for the song “Gotta Serve Somebody”…

  15.  

    That first quote is from

    http://www.songmeanings.net/songs/view/3458764513820552090/

    (where’s the edit button?)

  16.  

    This has moved a long way from financial regulation.

  17.  

    Yeah – sorry.

    Uh, how ’bout this?

    http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/1999/sp23.shtml

    3 March 1999

    Chancery Bar Association and Combar Spring Lecture
    Lincoln’s Inn, London
    Speech by Howard Davies
    Chairman, Financial Services Authority

    The establishment of the Financial Services Authority is an innovation in many respects. The FSA is the broadest and most comprehensive financial regulator in the world … we are probably the only regulatory authority in the European Union to have a 12ft square stencil of the words of a Bob Dylan song in its entrance hall: on loan, I hasten to add.

    Just kidding…

  18.  

    No problem. The new befriending policy is much easier to get along with than the old confrontational approach, but of course, as we all know, when something else happens and I write a post condemning some military action, we’ll be back to business as usual.

  19.  

    Some1lovesu I was driving into a roundabout near Kilcok this evening trying to say the Angelus and keep her arse-end from stepping out (have an AMG E55 just bought rear wheel drive she’s a bitch) and the comments you made cam into me head while was saying ”Behold the handmaid of the Lord / Be it done unto me according to thy word” and I copped what you mean. Islam means ‘submission” too. So I’m kinda gettin it. HJesus I’m pissed entirely ok right that’s it Bock I don’t blame you if you ban me. Hope you don’t I love this site already. nite

  20.  

    (Old AMG hasten to add. Not tryin to boast nor brag nor anything saw how you tore down some bloke said he was head of Global Airways or something trying to impress a loada random collections of molecules with how great he was feckin eegit who gives a shit. I just love cars. Love them love them love them)

  21.  

    Glad those comments didn’t get you into an accident! Me thinks cars love you, too.

    I don’t think that Bock will ban you – I mean, you’re only 3 letters away from being GOD*…

    *(G – J)

  22.  

    Nice of you to say :) Yeah I think they do too. Well. With the exception of one but she didn’t mean to smack me into the tarmac when I was a sixteen year old kid on me bike and nor did the drunk behind the wheel just wrong place wrong time trying to occupy the same space as half a ton of Mazda doing near 60 in a 30 mile zone. Forgave them both long since. Have three oul yokes. The AMG, an XJ8, an a Camry. One or more is usually up on axle stands or a lift in some garage in Monaghan or Cavan getting bits pulled off and replaced with other bits sourced from micksgarage.ie so I need a spare not being greedy. And I always hope to run into one of those Yellow twats Gormley or Sargent or one of them sandalistas wobbling along on his bike now they’ve all lost their Ministerial mercs thanks to Karma and just slide up past them and give them a blast of 8 or 6 cylinders of peeyoor Cyavan CO2. Sure you could easily spell that DOG. Or as our Greek speaking friend Bock might say Kynos (which is the greek for dog). Arf!

  23.  

    Bock knows Greek? Wow you really ares into cars!

    LIsten – if you want to spell it DOG, then you might as well spell your name DOJ* – which is another make of car (American)! Hmmmm….

    Bock, hope it’s alright us having this little meaningless chat here.

    * Dodge

  24.  

    Had one of them too. A Dodge Dart to be specific. While workin on the buildins in Noo Yawk an Noo Joisey as a young fella of 19 in 1985. Illegally of course. On a B2 visa with a makeyup Social Secuirty number derived from a USIT Countdown discount card. Big oul boat of a yoke. Bought her off an old guy in Montclair/Verona. We used drive to Tom’s River for the weekend and she’d occasionally boil dry which could be inconvenient in the fast lane of the Garden State parkway. We’d have to pull in and on one occasion when we’d no spare water had to rely on Kreb’s Cycle as manifestin in the kidneys of 5 strappin Cavan bys to replenish the radiator. The a/c stank ever after but we got our weekend at the beach. Had a 1964 Ford Falcon before her. When I bought her the paint had all oxidised off so repainted her in blue an white Hammerite. Sold her for 200 more’n I paid for her to a yank in Tierney’s Bar in Montclair whose granddad cem from Mullagh. Told him she was the only genuine Cavan car in the US officially endorsed by Breifne Park and he swallowed it hook line an sinker. He wasn’t diddled tho’. They knew how to build American cars back in 1964. No such thind as planned obscolescence. Et she’s still runnin today even. Anyway yeah sorry Bock hope u don’t mind.

  25.  

    Course DOJ also stands for Dept of Justice.

  26.  

    Well, GOD is also supposed to be the Ultimate Judge.

    Also Day Of Judgement.

    And you should know this one – Double Offset Joint.

    http://acronyms.thefreedictionary.com/DOJ

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