Prior to 2008 Wall Street racketeers leaned on America’s accountants to switch to the mark-to-market method of valuing paper assets, the principal holdings of any firm in the financial sector, be it an insurance operation, bank, business development company (BDC), real estate investment trust (REIT), or the like. What part mob bribes to elected officials played in this has never been explained by an FBI deeming wise guy payoffs legal if the sums are big enough and you call them campaign contributions and deliver the bags to Presidents or Senators or somebody important like that.
Always the eager beaver on issues redefining greed, Chief Justice Malfeasance Roberts and his reactionary cronies on the Supreme Court recently threw out key provisions of campaign financing laws dating back to 1907, including high court decisions in 1990 and 2003, overturning bans on corporate-funded campaign ads and politically-driven ads within 30 days of a primary or 60 days of a general election. By opening up the floodgates to the world’s largest illicit slush fund, corporate payola, Mal finally secured his seat at the prestigious Business Roundtable, Gangland restraint of trade operation favored by Fortune 500 CEOs, even though industry magnates are understandably more comfortable passing cash under the table in small, untraceable denominations than openly bashing green candidates on the nation’s TV sets with every buck they‘ve got.
Mark-to-market meant that CPAs suddenly had to value paper at current market prices, forcing financial sector companies to report losses or gains as quotes fluctuated. Prior to mob infiltration into accounting, the profession‘s standards called for its books to carry most paper assets at original cost, typically the appropriate value. Large financial players make direct loans of $1,000 per bond and get $1,000 back at maturity, so normal transactions have nothing to do with interim market fluctuation, and since management typically maintains excellent control over company liabilities, changing quotes do not effect the financial condition of healthy businesses in the sector. At all. Ever. Unless you let Street wise guys muscle in.
An accounting source close to the writer tells me the move to mark-to-market was just what it reads like, a sea change in their practice, comparable to revising sections of the United States Constitution for the personal gain of Wall Street Dons and just as threatening to the politically-flawed economic fabric of the crime-ridden society you and I are struggling to function in.
With the switcheroo into mark-to-market, short-selling thugs could now bully prices of investments held by targeted financial companies, and drive quotes low enough to trigger codicil calls on the bonds the financial companies themselves issued. (Don’t worry, I’m about to explain it. Hang in there.)
Codicils are provisions in a bond indenture that management is held to throughout the life of that bond issue. Well before the Great Crash of 2008/09, Street thugs made sure that one of these codicils required bonds to be called automatically if the company’s net asset value fell below some stated level. Nobody keeps enough cash around to pay back all their bonds in a pinch. If forced to, any leveraged corporation would turn insolvent, thus falling into bankruptcy, often taking out common stockholders in the process.
While short-sellers pounded mark-to-market paper values into the ground in the Great Crash, they jumped all over financial company stocks, spreading the lie that these firms had a “broken business model” in the codicils of the bonds they‘d issued. That’s right, spreading the lie. In blatant disregard for the public good, SEC inaction encourages short-selling mob mouthpieces to wage elaborate propaganda campaigns aimed at wiping out your savings, pouring whoppers into the media, holding open meetings to slander people, basically whatever these hoodlums want to pull off, all designed to scare small investors to death and taunt big ones out of the way.
In the middle of the Great Crash, you could sit at home and watch this bulls$^% getting f#$^ing broadcast on f#$^ing GE TV right in your own f#&^ing living room.
Short-sellers knocked targeted paper asset prices down toward oblivion, investments held by financial companies as well as their own stocks. And net asset values of financial firms headed toward levels triggering codicil calls, a thing proper accounting methods had always protected against before the mob moved in. Bank of America shares went from the 50's to under 3. Others did even worse. Most of the quotes that got clipped were literally surreal. Prices had nothing to do with value.
To explain that disconnect, mob stooges started mumbling about "distressed markets". Not gamed markets. "Distressed."
Still. To this day there has been no mention of gamed markets. Of thugs and play shares and massive, systemwide accounting fraud. All Washington has been paid off to flee from the truth. Paid off by Wall Street thugs.
Bloodbath Mary over at the SEC shut down scheduled public hearings on short-selling later in 2009, claiming that short-selling had nothing to do with the 2008/09 market crash caused by short-selling, so nobody got a chance to ask the bitch what she planned to do about anything.
Nothing, I guess.
This whole situation is too ridiculous for words. After a century of criminal activity, the entire Italian Mafia has raked in what? .01% of the planet’s wealth destroyed by Wall Street Crime Families in a single worldwide market crash? .001%? .000001%?
And now we have codicil risk. That’s the best term I can think of to describe what stock market investors face when Wall Street Crime Families are allowed to game the system with some new stealth weapon like the mark-to-market switcheroo that did, in fact, wipe out a ton of our savings in 2008/09. Stealth weapons that come at us out of the blue.
What on earth does the FBI do for a living? When are they going to toss Bloodbath Mary and her Gangland stooges in the clink? Thieving regulatory crooks deserve to be locked up good and tight. Forever.
Forf#$^ingever. Lets put that on GE TV in my living room some afternoon.
