Did our government assume all those "Toxic Assets" the bankers were complaining about?

[Toots]

Is that why they are suddenly so very profitable? Is that why all those workers at Goldman Sachs and other financial institutes deserve such huge bonuses? What has happened to those "Toxic Assets"? Are we fore closing on them? I would think we should make them buy back some of those problems before they pay such huge bonuses....I guess I will never understand how these things work..

[Democracyinkind]

1. Before they buy back what they have been able to sell, they should stop hiding what's still on the

books.

Basically, they have made an industry-wide deal to discard honest bookkeeping in order to "overcome" the crisis. While this is not a uniquely american scam, American banks are the largest perpetra(i)tors of this scam. In Switzerland, there was a total outrage against UBS when they splitted up their toxic assets over 6 quarters in order no to go bust. People finally came to the conclusion that this kind of bookkeeping is a scam and they pressured UBS into stopping this particular scheme .... Now they are just sitting on the rest, ,like the american banks, pretending that those assets still are worth something or will be wort something soon again. In a capitalist system, these banks would have been extinguished after 1 quarter of this bullshit fraudulent accounting.

[jschurchin]

2. The banks are still

holding them on their balance sheets. They are called Level 3 "assets". "Assets", yeah thats rich. Back in March the accounting rules were ammended to allow the bankers to value this garbage at par. In other words, the value assigned to this paper at issue.

For example, say your a investment bank who packages 250 million in mortgages into a new security. You then sell this paper to other banks at face value, "par". Now, 60% of these mortgages go into default. This paper is no longer worth 250 million, it is now worth 100 million. Before March the banks had to relize these losses as "mark to market". In other words, show on their balance sheets that this paper was garbage.

Now thanks to our "friends" in congress, this accounting rule has been suspended. Banks no longer have to "mark to market" instruments that are worthless. They can assign a value of par to them. So paper that in reality is worth 100 million is "magically" worth 250 million.

We are on a slippery slope here folks. Sooner or later, more likely sooner, we are going to pay for this foolishness. And if you thought the last market dive was bad, you haven't seen anything yet.

[Bigmack]

3. kick... nt

[AllentownJake]

4. Legalized Accounting Fraud

As some posters have pointed out.

Here are two articles that explain what is going on.

http://market-ticker.denninger.net/archives/1514-Tying-It-Together-Massive,-Pernicious-Fraud.html

http://market-ticker.denninger.net/archives/1518-FDIC-Bankrupt-Uh-Huh-Again.html