The New York Times summarized a report that tells us how Lehman Brothers was able to keep its dire financial situation under cover:

According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion of assets off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money.

...

But Lehman used aggressive accounting in its Repo 105 transactions: it appears to have structured transactions such that they sold securities at the end of the quarter, but planned to buy them back again days later.

The effect of the accounting was to artificially and temporarily lower the firm’s debt levels to hit certain targets, making the firm look healthier than it really was.

This is the same kind of financial “creativity” that led to the Enron bankruptcy. Note the date on the news article. This has been known for 2 1/2 years, yet no one has been prosecuted. I am beginning to wonder if what one insider I saw interviewed said is true. He said that the reason no one has gone to jail is that all these shenanigans are legal. Surely we are not that corrupt—surely?

Max Keiser has suggested that this kind of financial confusion is common, and done with the approval of the accountants to hide the true situation from the regulators. I know Keiser has good sources because of his background, or he could be guessing; I hope he is wrong. The only way we will find out is if there is another crisis.

In the meantime I suggest that you get ready for the end of the world when the Mayan calendar ends on December 21 prepare for a prolonged period of financial troubles. Make sure by your hard work that you would be one of the last to be fired in a crisis. Start now.

Here is the Max Keiser Report: