I
am reposting this from Aotearoa:
a Wider Perspective
$112
billion in Derivatives and off the books accounting. John Key can’t
help himself!!!
14
May, 2012
In
an astonishingly critical lecture Associate professor Dr SueNewberry, from the University of Sydney told an Auckland audience
that the NZ government has defrauded the New Zealand population. Well
of course she did not speak in those terms of course but she might as
well have because if you or I had used the accountant procedures we
would be in jail for defrauding .
First
of all it turns out that the government has invested $ 112 BILLION in
derivatives. Derivatives are basically bets and as JP Mogans $2
billion loss showed bets can go wrong. We don't know what the
underlying value is but we don know what John Key thinks about them.
Here is is confessing on Breakfast
TV.
But
no only that she told the same audience that the way our government
keeps its book is a total shambles in fact these are the words she
used; The "Investment Statement" is an inappropriate
description for "what is really a piece of accounting fiction",
and she expressed her worry " about the lack of information on
the state's operations in financial and derivatives markets.
In
fact here is the article as it appeared on the Sunday
Star website
An
Australia-based New Zealand economist is criticising the accounting
practices of the New Zealand government, saying there are glaring
omissions in the figures, the finance minister has too much power and
the recently released "Investment Statement" is an
inappropriate description for "what is really a piece of
accounting fiction". (Also known as fraud)
Associate
professor Dr Sue Newberry, from the University of Sydney, told an
audience at the University of Auckland's Business School that
government accounts ignore "off-balance sheet exposures"(also
known as Fraud) amounting to more than $112 billion.
Newberry
expressed concern about the lack of information on the state's
operations in financial and derivatives markets. (more secrecy)
The
criticisms preceded an announcement last week by state-owned
generator Mighty River Power that movement in the value of
derivatives (Also known as collapsing derivatives market of betting
loss) cut into the company's bottom line to the tune of $106 million.
However,
Treasury responded that New Zealand's accounts provide detailed
information, including use of derivatives. and have been cited
worldwide. (known as lying in my circle of friends)
Newberry
said New Zealand's Constitution Act 1986 requires parliament to
approve borrowing and spending, but the Public Finance Act delegates
these powers to the minister of finance, along with the power to
delegate further. So the city of London bankster scum can tell him
how to bankrupt this country)
Those
powers appear to be delegated without limit and are exercised outside
of the parliamentary process, Newberry said. (On whose say so)
"Even
a company does not delegate powers without putting a limit on it,"
she said.
There
has been a significant increase in the government's activity in
financial markets over the past decade, she said. However, the
government's accounts do not show that clearly. (This clearly shows
we do not own our own government as labour clearly has also been
"advised" to invest in the fake product that is the
Derivatives market)
"What
happens if you do show the extent of exposures to derivatives is
really quite massive," she said.
Derivatives
are both an asset and a liability (Also known as betting. It acn go
right but generally it goes very wrong) . Newberry said the way these
are accounted for is by netting these off rather than showing the
totals of each. However, the dangers of derivatives were revealed in
the global financial crisis in that one side of a contract can
collapse while the other side remains in force. "Netting off
obscures that," she said. (In other words while the underlying
assets, probably more crappy mortgages or bonds of sorts collapse you
are still in hock to and must pay up)
Newberry,
hosted by the Business School's Retirement Policy and Research
Centre, said adopting "Generally Accepted Accounting Practice"
( More banking scamster accounting practices of which John Key know a
great deal) standards is disguising the rapid growth in financial
market activities and the extent of the government's exposures.
A
spokesman for Treasury said the government's financial statements
provide detailed information on the Crown's financing, including
derivatives. ( Well I didn't know about them, did you?)
"Analyses
of financial instruments, of risk management policies, of exposures
to market risk, credit risk and liquidity risk, are provided and New
Zealand government accounting standards have been cited for their
strong levels of transparency in international studies,"
Treasury said.
Derivatives
with the Debt Management Office (NZDMO) mainly consist of interest
rate and cross currency swaps (Isn't that the crap John key used to
deal in. The same crap which collapsed his former boss Merrill
Lynch?) used to manage risks associated with either debt issuance or
with fixed-income asset purchases. The office also executes
derivatives with other parts of the Crown. (The city of London
perhaps)
"NZDMO
tends to manage risk associated with these trades by transacting with
the private sector. The other Crown entities use the trades with
NZDMO as hedges for their own risks," it said. However, to get a
complete picture of derivatives used would require talking to all
entities involved.
Delegation
to transact is subject to controls and managed by skilled
professionals, Treasury said.
"These
professionals act within transparent risk policies and parameters and
are accountable for their efforts and must meet detailed reporting
guidelines and frameworks." (You think???)
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