After a year-long investigation, court-appointed bank examiner Anton Valukas has produced a deadly 2,200 page report which details the activities that led to the Lehman Brothers bankruptcy. The report is a keg of dynamite.
According to Valukas, Lehman was "Unable to find a United States law firm that would provide it with an opinion letter permitting the true sale accounting treatment" using Repo 105. So, Lehman executives went outside of the country in an effort to enlist the support of a London law firm that would approve the procedure.
What did Geithner and Bernanke know, and when did they know it? It appears that they either knew what was going on at Lehman and looked the other way or acted as the "chief enablers" of accounting fraud.
The financial institutions are taking their money and running. They know it's over. And the only source of cashing out is the US Treasury and Fed.
This is the huge scandal: collusive government officials who operate as de facto agents for an industry saturated with corruption and conflicts of interest. Connived at the coverup of Lehman's true position because he doesn't work for the 10 million people who are now standing in unemployment lines, or the 35 million people who are now on food stamps, or the 6 million people who have lost their homes to foreclosure, or the hundreds of millions of people who have seen the home equity evaporate, their retirement funds plunge and their hopes for the future dashed so that a handful of insatiable landsharks could fatten their bank accounts in the Cayman Islands.
An important investigation would take only a few weeks. Look at the Fed's $1.3 trillion in cash-for-trash swaps. If these prove to be junk mortgages for which the Fed has given good US Treasury bonds, at the proverbial taxpayer expense, then the Fed and Treasury administrators should have criminal charges brought against them, the accounting firms of the companies pledging these junk mortgages and other financial junk should be closed down and RICO charges brought, and the banks themselves should be wiped out.
Michael Hudson has urged the appropriate Washington oversight committee to open an investigation along these lines. But, what are the chances?
Excerpted from Whitney @ Counterpunch
