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Old GG MB
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The US Federal Reserve Bank, GS, JPM and the New Fantasy Accounting Standards Board
Up until mid-2009, the Financial Accounting Standards Board (FASB) was an independent, non-profit organization, that set the accounting standards for all USA businesses. In 2007-08, the 'toxic assets', sub-prime, and 'derivatives' markets were blowing up, and big firms (mainly banks)were not reporting their true exposure and risk in their financial statements. The FASB of the day, had been discussing these items before the 2007-08 mess and had already begun drafting new regulations, tightening up considerably, the reporting of these 'toxic 'mark-to-market' vs the previous 'mark-to-book' financial instruments', derivatives, and CDSs. When the big US banks, and the public, became aware of the changes, the TBTF banks panicked and had their puppet and front man at the US Federal Reserve Bank, Ben Bernanke, screaming threats at the FASB, threatening to have it disbanded (some posters on this mb may well remember the public's screams against the US Federal Reserve Bank's intervention in the media of the day). The members of the FSAB of the day refused to change their position on the reporting recommendations and QUIT, EN MASSE! The MSM immediately went blank (blacked out) on the issue, and what emerged a short time later, was seven new, full-time members, appointed by the US Federal Reserve Bank (whose shareholders are all TBTF banks), and their new born, FANTASY Accounting Standards Board (NOT to be confused with the FSAB prior to June 2009). An excerpt of the above, and link, appear below: https://en.wikipedia.org/wiki/Financial_Accounting_Standards_Board Excerpt: “In June 2009, FASB was criticized by an advisory panel of investors after making changes on mark-to-market accounting in response to political pressure. Lobbyists had obtained its permission for banks to apply a special accounting treatment for toxic assets.[7]”
The reader's attention is drawn to fact that this 'wikipedia' excerpt may be as credible as Hillary Clinton's book 'Hard Choices', and more recently, what happened to the information on her private server.
The 'new' Fantasy Accounting Standards, introduced by Ben Bernanke himself, allowed the TBTF banks, financial institutions, and companies to 'adjust' their financial reports by omitting or 'down-playing' any financial information that could be injurious to the reporting entity. At this point in time, many investors that had used 'Financial Analysis' to determine an entity's value realized that the information in the financial reports was 'doctored to make firms appear healthy' and abandoned the 'Financial Analysis' process. Considerable debate ensued, and still endures, as to whether Technical Analysis was and is valid, since equity prices used in TA are based on faulty/deceitful financial statements. (that decision is left to the reader) Subsequent to the NEW FASB appointments and rules, investors have watched as US financial indexes, particularly the DJIA, 'surge-to-da-moon'. (some suggest the markets are being manipulated). How fast has the 'surge-to-da-moon' happened? Here is the DJIA's progress: The DJIA crossed above 11K on 11 Oct 11, 12K on 31 Jan 12, and 13K on 30 Jul 12---3K in 9 months 6 months later, the DJIA crossed above 14K on 28 Jan 13, 15K 29 Apr 13, and 16K on 30 Dec 13—3K in 17 months 7 months later, the DJIA crossed above 17K on 14 Jul 14, and 18K on 24 Dec 14----2K in 12 months. (one caveat on the above dates: for those who like to 'pick-the-fly-shit-out-of-pepper', if the dates shown above are out by a day or so, take your corrections, complaints, and comments to Yahoo, that is where they came from) The DJIA has been attempting to cross-and-hold 18K since 24 Dec 14 until 20 July 15, when it started to fall, peeling off almost 1900 pts in 30 calendar days. WoooooooWooooooo what a ride down, with no bottom in sight. Yumping Yiminie, Dats fast! So what does this have to do with the Price of Gold, the PM s, XAU, and the HUI ? Well, back in 2009, when the US Federal Reserve Bank and it's TBTF shareholders set up the new Fantasy Accounting Standards Board, they needed a whipping boy, and what better than a small group of gold miners, heavily weighted to a very few high profile miners----ABX, GG, NEM. FCX--that they could manipulate, and use to drag the rest of the miners and the PoG down, without hurting their designs to drive the DJIA up. If the DJIA's current Kamikazi dive of the last 3 days is arrested or has been a 'head fake' and turns up, what happens to the PoG and PM s? OTOH, if the DJIA's current Kamikazi dive of the last 3 days can't be/isn't arrested and the PoG and the PM s rise, what happens to the high profile miners---ABX, GG, NEM, FCX---that the US Federal Reserve Bank and TBTF have been manipulating down with the new Fantasy Accounting Standards? Will the DJIA continue it's Kamikazi dive next week?, or---, ----do a 'dead-cat-bounce' ? Or, Will the DJIA have another 'miraculous recovery' ? (It's already dove over 10% from it's ATH) JMHO |
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