Repo 105?

If there has ever been a Betty Crocker  recipe for book cooking it's this Repo 105 and 108 which is the same just a percentage separates the two by 3%.  Now accounting becomes rocket science,  firms are hiring grads from MIT with math majors and you would have to be one to even begin to calculate their books.

Repo 105 is an accounting maneuver where a short-term loan is classified as a sale. The cash obtained through this "sale" is then used to pay down debt, allowing the company to appear to reduce its leverage by temporarily paying down liabilities—just long enough to reflect on the company's published balance sheet. After the company's financial reports are published, the company borrows cash and repurchases its original assets.  Now isn't that clever,  a temporary move to hide your toxic assets until underwriters are done looking your books over and then give the borrowed money back to your buddy.  But oops,  Lehman could not pay back the borrowed money and all hell broke lose.

Same thing happen to AIG when they created insurance for the swaps and derivatives sold to fund managers and other countries throughout the world like Greece,  the rug was pulled because Lehman went BK so AIG could not cover their spread.  Then the bailout started, they all got money from the Feds on the backs of American taxpayers (Thank You) with that there was no demand for what they should do with the bailout money.  So now with all that cash  from the Feds the battlefield has begun.  Wall Street does not want to be regulated and has hired attorneys along with lobbyist with the hundred of millions and even billions to halt regulators from the fat cow profits they designed.

They got the bailouts and instead of helping they bit the hand that feeds them so this shell game that contains no red ball can continue.  Because let's face it, no profit has ever been created like the subprime meltdown, we have a junkie on our hands.  What you need to do is control your own investing, many programs available with the purchase of stocks directly through a company itself,  no need for a broker or fund manager, instead of feeding this junkie cut them off.


traynickel