How the banks are cooking the books
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Friday, April 24, 2009
How the banks are cooking the books

A number of you have asked me how it is that I could claim the bank stress tests reveal 16 of the top 19 banks in the USA are "technically insolvent" when banks are reporting "record profits" this week? They're cooking the books!

Want proof? Let's use the numbers from Wells Fargo Corporation (WFC) as an example.
 

This week, WFC reported their financial condition publicly with “master of the universe” bravado and bluster about their superior banking management. They claim a 1st Qtr profit of about $3 Billion. Remember that number: $3 billion.
 

I suppose when you are down on your chips and running a bluff, you have to give out the right sort of attitude and moral high ground to make it work, to hide the fact that you are just crooking the books like everyone else.

That smoke you feel being blown up your backside is nothing more than legalized accounting fraud being presented to the world in the form of Wells Fargo’s 1st Qtr 2009 earnings release.
 

As suspected, the infamous “record $3 billion profits” pre-announced 2 weeks ago by Wells Fargo are nothing more than a result of our Wall Street-financed Government, including our President, forcing the FASB to change the way big banks account for toxic assets.
 

From WFC’s earnings release :
“The net unrealized loss on securities available for sale declined to $4.7 billion at March 31, 2009, from $9.9 billion at December 31, 2008. Approximately $850 million of the improvement was due to declining interest rates and narrower credit spreads. The remainder was due to the early adoption of FAS FSP 157-4, which clarified the use of trading prices in determining fair value for distressed securities in illiquid markets, thus moderating the need to use excessively distressed prices in valuing these securities in illiquid markets as we had done in prior periods”

Essentially, what WFC did was post $5.2 billion mark-to-fantasy gains, which were then added into its revenues, by reversing out previous charges expensed against their securities and loans held for sale. Without this $5.2 Billion "gain," Wells Fargo loses . . . . . . $2.2 billion.
 

In looking at WFC’s balance sheet, I see that their “securities held for sale” miraculously jumped to 27% of their net loans vs. being only 21% of loans at the end 2008. This is obviously WFC taking full advantage of the new mark-to-fantasy accounting standard, piling as much toxic waste into this category as they can and marking the price levels up substantially. It would be really interesting to see what kind of worthless crap was conveniently moved into this category but we in the public aren't allowed to see.
 

That is how the banks are reporting "profits." Using these types of accounting gimmicks is how they intend to report the banks have "passed" the "stress test. It's all gimmickry.

My report, published last Sunday about the bank stress tests and how 16 of America's top 19 banks are "technically insolvent" is proving to be absolutely on-target . . . . . using real accounting methods as opposed to the new fantasy methods.

Vindication is such a sweet thing!

NY Times stories about me show 2 faces of media
I've become somewhat of a hot topic in the main stream media (again) and it is providing a genuine opportunity to demonstrate with perfect clarity the clear, intentional and subtle bias appearing in front of millions of you every single day.

It began last Sunday night after I published a story on this blog outlining the salient points of the "Bank Stress Tests" due to be made public on May 4. I obtained the results early and alerted the world to what will be very bad news.

My story spread like wildfire because this blog is a trusted source of news for millions of people. (More than thirty million unique visitors and two hundred million page views in the last 3 years)

When the U.S. Stock Markets opened, Bank stocks were immediately impacted by folks spreading my report. Bank stock values plunged by eleven percent within 6 minutes. On the S&P 500 alone, bank stock values plunged by about $527 million dollars.

As "main stream" media outlets in the U.S. and overseas began covering the story, foreign stock markets started analyzing which of their banks had exposure to U.S. Banks and stocks of those foreign banks began falling too.

Enter the US Treasury - with a brazen lie
Things were happening so fast and so severely that no less than the United States Treasury Department issued a statement around 10:22 AM declaring "No basis for the report by Hal Turner of North Bergen, NJ." The Treasury went on to say that there was no way I could have the report because the Treasury itself doesn't have it yet. That's when things got really ugly.

You see, about 10 days earlier, on April 10, that same US Treasury had announced publicly that they had ordered banks like Citibank and Goldman Sacks to keep the stress test reports secret. Analysts around the world started asking themselves "How can they say they don't have the report yet when ten days ago, they warned banks to keep them all secret?"

That lie caused panic. Folks realized the Treasury was lying and figured to themselves that the only reason they would lie is because the report on my blog must be true. The sell-off continued.

When it was all said and done, bank stock values worldwide had dropped by about $2.3 BILLION dollars.

Fair reporting versus biased/malicious reporting
When the story was "hot" the New York Times covered it - and me - with a fair and accurate report. I provide the link below so you can read it for yourself

Yet today, just a couple days later, after those with vested interests in hiding the facts decided I needed to be discredited, suddenly the media coverage has changed.

Now, the same New York Times is calling me "an incendiary blogger" . . . . . going on to report that I'm "a white supremacist" . . . . . "right-wing radical" and finally " “a belligerent, foul-mouthed talk show host."

WHOA! The smear machine is in full damage control mode!

In similar fashion, the Financial Times of London first reported about me accurately, saying I had a "scoop." But the next day they were saying "white supremacist" and claiming I am "widely derided as a racist crank."

If it was just these two large newspapers acting this way, one could chalk it up to coincidence. But it isn't just two newspapers. There has been similar conduct by Bloomberg Business News, CNBC, TheStreet.com and a whole slew of other allegedly reputable news outlets.

These smears aren't reputable, they're fulfilling someone's agenda. If they can't kill the message, kill the messenger.

Folks, the media does this same thing each and every day in countless stories they pass-off as "news." They manipulate, massage, shape and edit their stories to mold what YOU think. Not what you know. . . . . what you THINK.

This is exactly why the New York Times is $1.3 Billion in debt with only $34 Million left in the bank and probably heading for the ash heap of history (or a government bailout). It's also exactly why a whole slew of other newspaper around the country are going belly-up. People like you are waking up to their lies, manipulation and outright sleaziness, and coming to blogs like mine to get the truth.

Let this be an example to you. If the largest newspaper in America willingly resorts to this type of hatchet job to discredit the truth, you better believe the rest of the "main stream" is doing it too.

Don't take what they report as fact. Think for yourselves. Oh, an in case you want the facts, you can read my report about the bank stress test results HERE

NY Times being fair and accurate about me (Here)

NY Times doing their hatchet-job on me (Here)
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