A report on the Lehman Brothers bankruptcy came out today. It’s ancient history really, because to happened a year and a half ago. But it’s relevant today to remind us of the obfuscation that we endure from banks, politicians, the boss and others.
Simply put, Lehaman fudged its financial performance by selling assets prior to a reporting date in order to improve its reported balance sheet and income statement. Then after teh reporting date, borrowed to repurchase the assets, at a slightly higher price. In other words, they paid someone to sweep the dust under the carpet for a few days.
There are some synopses of the story for finance geeks (like me?) here:
What’s in Repo 105 by FT/alphaville
Graphic: How “Repo 105? worked by Reuters
The moral of the story is that banks, fiduciaries, politicians are still playing the same old tricks. It’s a bit like the Pope failing to atone for the abuse of children by priests also in the news today. Nothing has changed and the consequences for the global economy, local economies and society will be dire.
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