Bill Cara - Mike Shedlock aka Mish is a consultant who writes a blog on Global Economic Trend Analysis. Yesterday he wrote about “The sorry state of U.S. Govt accounting practices”, which a mutual reader (Motts) calls “distressing”.
It bloody well is, but who is doing anything about it?
People who are not self-employed in business or trading are using OPM. And because those “Other People” don’t have a system where they can effectively scream and demand and obtain changes, these problems go on and on and on.
I have complained about Freddie Mac (NYSE: FRE), a U.S. Government Sponsored Enterprise (GSE) that not only foisted a multi-billion dollar financial accounting scandal on their shareholders, they ripped them off by paying the departing CEO a multi-million dollar exit bonus.
Then yesterday, Fannie Mae (NYSE: FNM), another GSE, also reported grievous problems in the financial accounting area.
There seems to be no end to the problems and the fraud when Other People’s Money is on the line.
So yesterday Mish wrote about the failures in the accounting practices of the U.S. Government. Mostly he just pointed to the report of the Auditor General. But to save us from having to read a 158-page PDF (which is time my readers need to read my Week in Review :-) ), Mish clipped a few charts and tables and comments to save us time.
Good stuff.
However, I think it’s going to take a bear market of epic proportions before there is a shareholder/trader revolt in many countries before these distressing issues are addressed.
The insiders who are to blame for these problems are very hard at work protecting their turf. They know a good thing when they see it.
You know, I don’t like to call a senior judge an “idiot”, and private equity firms “bandits”. I was, in fact, taught to stay away from personalities, and to stick to issues and principles. But there is a bigger picture here.
There is an article in today’s Toronto Star, headlined: “Plan for internal financial controls too weak, some say”. These regulators – people in authority – are a disgrace. They and their white shoes ought to be turfed out the door, but we are electing buffoons in government to do a serious job, and so these regulators and self-regulators get to hang on.
It’s up to us to do something about these problems. The longer they persist, the more capital that is stolen from us.
Posted by Posted by Bill Cara on March 14, 2006 10:20:04 AM | Category: Cara Today in the Market
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