Juggling Dynamite

For those dreaming that maybe today’s excessive valuations in most financial assets can resolve in a virtuous end of gentle mean reversion, or suddenly soaring GDP, sales and earnings that will miraculously ease current cash flow strains, we offer the following graphic of the once revered and now loathed mining sector. A new study finds that there are 589 publicly listed mining companies (roughly 40%) that should no longer be listed as they do not meet the continuous listing requirements required by the exchanges to have working Capital or Financial Resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.  See:  A Miner Problem, $2 billion in negative working capital.

Notwithstanding their ineligibility, these nearly 600 companies so far still remain listed on public markets, because they generate fees for a variety of service providers such as lawyers, auditors, banks, and the exchanges themselves. Investors in this once loved sector, have already been pummeled with capital implosion. However, speculative boom/bust cycles cannot complete, until the grotesque excesses of the prior bubble are finally culled through the cleansing recognition of write-offs, write-downs and bankruptcy. Then the cycle can begin again…

I find data like this fascinating. Top earning world leader is Brigadier General Lee Hsien Loon, Prime Minister of Singapore since 2004 (with an outrageous lead). China’s Xi Jinping is pulling up a very distant rear. Of course special perks, benefits and graft would be on top of these salary numbers…

Courtesy of Ian Bremmer, Eurasia Group

Bill Black has penned yet another patient summary of the staggering evidence of fraud at Citibank, as well as all the many ways that the captured government and regulators have done their best to bury it.

Mr President…you want to leave a legacy that will actually matter for years to come? It is time to do the right thing to end systemic financial fraud in the largest banks. This is foundational to everything else.  See: Meet Citi’s ethical underwriters that tried to save it and America

This is the fourth and final column in my series that began by focusing on Richard M. Bowen, III. Bowen blew the whistle on Citi’s sale of scores of billions of dollars in toxic mortgages, primarily to Fannie and Freddie, through fraudulent reps and warranties. After Bowen protested and blew the whistle within Citi to its senior management (including Robert Rubin) – Citi’s senior officers’ classic accounting control fraud strategy expanded both in terms of the volume of sales and the incidence of fraudulent reps and warranties – which rose to 80 percent.

I have explained how Bowen and his boss’ banking careers were destroyed by the retaliation of Citi’s senior managers and how the SEC, the Department of Justice (DOJ), and the Financial Crisis Inquiry Commission (FCIC) have followed the disgraceful policy of trying to keep Bowen’s detailed disclosures from becoming public and being used to bring Citi’s criminal controlling officers to justice…

Mr. President, we are fast approaching the most beautiful time of the year in Washington, D.C. when the cherry blossoms emerge. You have a beautiful rose garden that would be the perfect site to award the whistleblowers medals, praise them, call on other Americans to follow their lead, explain exactly how to do so, and promise that DOJ and the SEC will act on any reliable case brought by the whistleblowers. An excellent means of showing your commitment to change would be to announce that you were ordering the immediate restoration of the government banking regulators criminal referral coordinator system, directing the SEC to release all of the information Bowen provided it, and order the release of Bowen’s interviews with the FCIC and his full, original written testimony.

Everyone in America, other than the inhabitants of the C-suites of a few dozen Wall Street banks knows you should do this. There’s only one reason you wouldn’t do so, and that reason is unworthy of our Nation.