For my remembrance of the 9/11 attacks during which 2,996 Americans were slaughtered by 19 terrorists, my family watched 9/11: The Filmmakers’ Commemorative Edition.
The movie started as a documentary following one rookie New York firefighter through training and his nine months of probation. In doing so, the two filmmakers were following an engine company on a call when the first hijacked airplane hit. The strike was on camera.
…The following text is a transcription of the Stone Engraving of the parchment Declaration of Independence (the document on display in the Rotunda at the National Archives Museum.) The spelling and punctuation reflects the original. Courtesy of the National Archives.
In Congress, July 4, 1776
The unanimous Declaration of the thirteen united States of America,
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
With Credit Suisse expected to get swallowed up into UBS today and thus disappear as an independent entity, I thought it would be a fine time to reprint this article which describes the bank’s legacy.
Pay particular attention to comments at then of the post – – Credit Suisse has a subsidiary whose sole purpose in life is to launder money for clients. They have been laundering money since 1910. Yes, 1910.
Previously posted on 2/24/17:
Looks like Credit Suisse is in trouble again. The feds and NYDFS have opened another money laundering investigation.
Check out the report on 2/23/17 at Wall Street Journal – Credit Suisse Probe Opens Old Wounds for the following info.
A retired professor invested $500K in a startup back in 2000. When the company went public in 2008, his shares were worth $80M.
Cool! Good for him!
He didn’t want to share a lot of that with Uncle Sam, so he got some help from the Israel branch of Credit Suisse to cut his tax bill.
By 2013 he had $200M parked in his accounts in Switzerland.
Well, somehow the revenuers caught up with him.
He cooperated extensively, including wearing a wire to some meetings.
Current status for him is he was sentenced to seven months in a federal penitentiary. The Bureau of Prisons is expecting him (inmate 90504-083), but he is not in custody. (Check for yourself here.) That means he will be moving into federal housing soon. Unstated implication is that means he is now a felon.
Current status for Credit Suisse is another probe with possible additional prosecution and additional fines. Several bankers have been fired.
The rules have changed
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To keep track of the spreading banking crisis, I’m going to staring making notes here on the blog. This will not be full coverage. Instead, this will highlight some parts of the story as it emerges. This will help me track of developments.
Previous discussions:
Update to late Sunday afternoon, 3/19/23 (yeah, it is necessary to time stamp blog posts that closely):
3/16/23 – Wall Street Journal –Eleven Banks Deposit $30 Billion in First Republic Bank – $30 billion of uninsured deposits went into First Republic Bank. Five billion each from J.P. Morgan, Citigroup, Bank of America, and Wells Fargo. 2.5 billion from Morgan Stanley and Goldman Sachs. Five others deposited 1 billion each. Purpose is to shore up liquidity.
Article indicates a large portion, if not most, of the funds are from money that regional banks have moved into the super big banks. They are recycling some of it back to the regional banks. These are uninsured deposits…well…conceptually they are uninsured, but after the bailout that wasn’t a bailout of Silicon Valley Bank, those are essentially insured.
The shoring-up started about four days earlier with money from Morgan.
3/16/23 – Wall Street Journal –Credit Suisse Will Borrow Up to $53.7 Billion – For several days there have been rumors Credit Suisse has been teetering on the edge of collapse. They announced borrowing $50 billion Swiss francs, which is US$53.7 billion, from Swiss National Bank, the nation’s central bank.
…A few notes on the banking crisis. Trying to keep track of the evolving story.Read More »
Rap video from a few years ago showing the failed arguments for Keynesian economics and the consequences of messing around with the money supply and artificially forcing interest rates low.
Pushing down interest rates leads to mal-investment in projects that are not really good plans. When interest rates eventually rise, lots of plans need to be abandoned.
The results? “Bailouts, payouts, and machinations.”
The ‘cheap credit dog’ will come back to bite hard.
When the economy is flooded with trillions of dollars during COVID, the fully expected inflation forces the Fed to raise interest rates, in turn dropping vaue of bonds and then in turn tanking the value of the securities portfolio of every bank in the country. No wonder the FDIC and FRB think Silicon Valley is just the first bank to go.
We saw it in 2008. We are seeing it again today.
Despite everyone on the planet knowing FDIC insurance covers up to $250,000 per depositor per bank, the Federal Reserve, FDIC, and Treasury Department decided over the weekend to increase the coverage at Silicon Valley Bank (SVB) to $1,000,000,000 per depositor. Yeah, up from quarter of a million to a billion.
Don’t know how this will develop over the next few days or weeks, but at the moment it looks like yet another bailout for the ultra-rich and ultra-connected. Oh, and a second massive bailout over the weekend.
It also looks like these bailouts will likely increase panic. It absolutely will increase of moral hazard, in other words, running a bank poorly knowing the feds will bail you out and investing in banks without due diligence because you will get bailed out.
SVB was taken over on Friday after a bank run drained massive amounts of cash. On an depressing tangent, the run is reported to have been fueled by venture capital investors calling their investees and clients, telling them to pull money as fast as they could. Essentially, we saw word-of-mouth spreading via social media at the speed of electricity. Thus a run appeared out of nowhere that collapsed a huge bank in a couple days.
Treasury Department says these are nationalizations, not bailouts
Regulators also took over Signature Bank on Sunday: WSJ, 3/12/23, SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis.
That is the third largest bank failure in the history of the US. The feds guaranteed all uninsured deposits, bailing out another set of ultra-rich depositors. SVB was the second largest.
Oh, excuse me. This is not a bailout.
I will quote the WSJ article so you don’t think I’m making this up:
…Full bailout for huge bank, rich bankers, and filthy rich depositors.Read More »
Today, January 28, 2022, marks the twentieth anniversary of the Ulvog CPA firm.
It has been a joy to serve the nonprofit community for these two decades as an independent CPA firm. Focusing on the religious nonprofit community has been a professional honor and a personal delight.
Thanks to all the organizations who have made this journey possible.
Looking forward to many more years of serving churches and ministries.
God’s blessings to you all.
After the Great Recession back in 2008, there was great hue and cry demanding that hundreds of bankers be thrown in prison, every one of them to spend the remainder of their life in a dank, dark dungeon.
Nice concept.
Has a good, solid, rewarding emotional feel. Just the thought all those horrible bankers in jail gives you a warm fuzzy feeling all over.
The only problem is for that to happen, federal prosecutors have to actually, you know, prove their case.
Little teeny, tiny problem standing in the way – – proving manipulation is difficult.
So difficult that all convictions for alleged LIBOR manipulation in the United States have now been overturned.
So much for throwing all the bankers in jail.
The core challenge is proving one specific individual committed a specific crime. A particular bank as a whole may have committed crimes, which can be proved. A department overall can be shown to have committed a crime. The challenge is to prove one specific guy over there, yeah that one, had intent to and did violate a specific criminal code.
Wall Street Journal – 1/27/22 – All US Trial Convictions and Crisis-Era LIBOR Rigging Have Now Been Overturned – Three traders from Deutsche Bank were convicted at trial in 2018 for manipulating LIBOR. The charges were wire fraud, which is exquisitely broad.
The Second Circuit Court of Appeals reversed the convictions.
…All the convictions in the U.S. for Libor manipulation have now been overturned.Read More »
The California Board of Accountancy Update newsletter, issue #94 dated Fall 2021, has details of disciplinary actions with effective dates in summer and fall of 2021.
A simple lesson for all CPAs from these situations is just do your job with at least a bare minimum of competence. The firms below didn’t get in trouble because they missed some SASs or were oblivious to some new or big or recent ASU. They didn’t get in trouble because a client lost out on a contested tax position. They didn’t get in trouble because they fell a few hours short on CPE or miscounted A&A hours.
No, they had splendiferous belly-flops from the 50 meter high dive. Examples?
…Disciplinary actions from California Board of Accountancy – Fall 2021Read More »
The amount of money Congress has pumped into the economy in an attempt to fight the Covid pandemic is staggering. Don’t quite have enough adjectives to describe the amount of money that is forced into the economy without any corresponding increase in production.
The amount spent directly on the pandemic is more than four times the annual budget at the federal level.
This is one of the primary reasons we are seeing inflation rates running at a thirty year high.
A close cousin on the list of inflation causes is the Fed flooding the economy with liquidity. See previous discussion: Just how much money has the Federal Reserve created out of thin air and injected into the economy?
I’ve pulled together the amount of money appropriated by Congress in 2020 and 2021 which are focused on fighting the pandemic and stimulating the economy. Here is my tally, with amount of funding in billions of dollars, date Congress passed the legislation, and name of the program:
…
To help auditors in the CPA community, the AIPCA peer review staff publishes PR Prompts, a newsletter with information for firms providing audits, review, compilations, and other attestation services.
The newsletter is unbranded and AICPA gives explicit permission to peer reviewers to put their logo and branding information on the newsletter. Those of us who are peer reviewers have specific permission to send it to our clients.
The following comments are provided to you courtesy of the AICPA. I gratefully acknowledge their work in preparing this info and gladly share it with you.
For ease of reading, I will not put all the following material in quotations.
Topics in this post:
PR Prompts – Fall 2021:
Revenue recognition: 4 top concerns noted by peer reviewers
To learn where challenges exist for entities and their auditors, the AICPA conducted a survey of peer reviewers, asking them to identify the areas where their firm or their peer review clients have experienced challenges in auditing revenue recognition. Over 230 peer reviewers responded to the survey to share what they’ve seen or experienced relative to the new accounting standard, FASB Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers. The biggest Topic 606-related challenges were identified as the following:
…
To help auditors in the CPA community, the AIPCA peer review staff publishes PR Prompts, a newsletter with information for firms providing audits, review, compilations, and other attestation services.
The newsletter is unbranded and AICPA gives explicit permission to peer reviewers to put their logo and branding information on the newsletter. Those of us who are peer reviewers have specific permission to send it to our clients.
The following comments are provided to you courtesy of the AICPA. I gratefully acknowledge their work in preparing this info and gladly share it with you.
For ease of reading, I will not put all the following material in quotations.
One section of the newsletter provides background on new accounting rules that will be required in the near term:
PR Prompts – Fall 2021:
Upcoming accounting standards updates (ASUs) not-for-profits (NFPs) should be familiar with at the end of 2021
The following is a summary of FASB ASUs with initial effective dates for most NFPs beginning in calendar-year 2021 and for 2020-2021 fiscal year-ends, or with effective dates that were deferred to 2021. Also, summarized are ASUs on the horizon with effective dates for most NFPs in 2022 and later. Additional information and guidance related to a number of these ASUs can be found in this AICPA article.
…Brief overview of new accounting rules for 12/31/21 financial statements.Read More »
Distressing inflation news keeps rolling in…
Multiple comments from senior federal officials indicate we are going to have inflation for a while.
Treasury Secretary Janet Yellen indicated inflation will continue into 2022.
She indicates the source of inflation is bottlenecks that have themselves generated inflation. Unstated in the article, and apparently unacknowledged by Secretary Yellen, this these bottlenecks are caused by the government shutting down the economy and in their staggering hubris thinking they can flip a switch and seamlessly open up the economy.
CNBC – 10/5/21 – Yellen sees inflation staying higher for the next several months.
Article also points out Fed chairman Powell called inflation news last week “frustrating.” I suppose so. When you think you can control the economy of the world with a few keystrokes from your laptop, such news would be quite frustrating.
Most unsettling tidbits in the article are the estimates from the Federal Open Market Committee that inflation measured by the PCE will be 3.7% in 2021. THey think it will be lower next year. I hope so.
St. Louis Fed President predicts 2.8% for the full year of 2022.
Few days ago we discussed the Personal Consumption Expenditure for August 2021 shows ongoing inflation.
The August number of 0.4% increase results in a year-over-year increase of 4.3%. Bad news is this is the highest increase in PCE since 1991, all the way back when Pres. Bush was in office. That is a 30-year high in the inflation rate as measured by PCE.
…A bit more on that high inflation rate seen in August PCE.Read More »
Looks like there is another flood of reporting ready to appear in print on bank secrecy and hiding wealth.
This project will be called the Pandora Papers.
If you recall, a major series of reports back in the 2016 timeframe described money laundering efforts flowing through one particular law firm in Panama. You can read my comments on the coverage.
The International Consortium of Investigative Journalists (ICIJ) brought together around 600 journalists from about 150 media outlets to analyze a data leak with 2.94 TB of info. That’s terabytes, as in thousands of gigabytes.
The ICIJ kickoff summary was published on 11/3/21: Pandora Papers: An offshore data tsunami.
If you are at all interested in offshore banking, or money laundering, or the world-far-away of hiding or relocating wealth even without nefarious intent, you will want to pay attention.
Looks like there will be a lot of coverage, what with 330 politicians and 130 people on the Forbes billionaire list showing up in the data.
From a first glance, it looks like this project have as one focus the structure of banks and professionals that service this market.