It’s enough to make one weep!

Just a couple of items from disparate sources came together last Friday to demonstrate just how possibly corrupt it has been over the last so many years!  But there is a golden lining to this stuff.

That is the ever increasing spread and reach of all forms of digital communications, from the humble email through to Wikileaks, is making it increasingly difficult for those that wish to cheat and lie their way through their lives, at the expense of others, to do so without detection.

Anyway, back to the theme of the Post.

The first item is from here (thanks to Naked Capitalism for the link):

Under the article title of – The Wages of Sin: Former Citi Execs Pay Token Fines for Lying to Investors

A news story today provides further confirmation of the rule by the banking classes in the US, with only token gestures to the rule of law.
(and after an in-depth review closes with:)
The message seems pretty clear. Sarbox [Sarbanes-Oxley Act. Ed]was intended to curtail phony corporate accounting in the wake of Enron. But why resort to complicated transactions like the energy company’s famed Raptors when Citi shows that mere lying will produce the same results with much less fuss?

The second from Karl Denninger, from which closes with these words are offered: GDP Report: Liar Liar Pants on Fire:

All three years of the revision period were revised down. Again, if a mistake or inaccuracy (as opposed to intentional falsehood) is responsible for errors, one would expect them to be normally distributed – that is, some would be positive, some negative.  This is obviously not the case.

Is there any good news in the report?  Well, yes – there was a material uptick in non-residential fixed investment, centered around equipment and software.  How much of this is a normal replacement cycle (deferred last year) and how much signifies real expansion is an open question and one not easily answered.  However, I wouldn’t call this particularly “robust”, despite the pump monkey characterization this morning in the media.

The drops in some of the previously-published numbers were, however, simply stunning.  For example, PCE (personal consumption) was previously reported for Q1/2010 as 2.13.  The revision is 1.33, a thirty percent downward revision.  That’s not an error, it was a falsehood.

Worse was the services false report.  The previous reported number for Q1/2010 was 0.69.  Revised was 0.03, a downward revision of ninety-five percent.

The services revision backward was truly sickening – the entirety of 2009 was negative with the exception of the fourth quarter, where all but the first was previously reported positive, and the changes were ridiculous.  First quarter was revised down from -0.13% to -0.75%, second from +0.09% to -0.79%, and so on.  Again, that’s not an error, it’s a lie.

Needless to say when I get all my graph source data updated, it’s going to look worse than it did – including my “government ponzi support” graph, one of my favorites.

The futures are diving on the report, as well they should.  Not because it’s bad – but because the entirety of the 2009 data set was a bald-faced lie.

Frankly, I’m much less interested in what is happening to Western economies – my views have been regularly reported on Learning from Dogs.

What appals me is how far we seem from those famous words in the Gettysburg Address given by President Abraham Lincoln on the afternoon of Thursday, November 19, 1863 (my emphasis):

It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.

P.S. As it happens, after finishing this article last Friday, Jean and I watched the film The Verdict in the evening.  The words used by the lawyer Frank Galvin (Paul Newman) in his summation struck me so powerfully that I have made them a separate Post for tomorrow.
By Paul Handover