Update:
Chicago’s John “Dr. J.” Najarian co-founder of OptionMONSTER on the need for transparency when the assets bought by the US government are eventually sold.
On YouTube.
Part 2 from Jon Najarian is here.
I have been updating this information throughout the weekend as other banks failed and other deals have been done.
A summary of “the mother of all bailouts” from The Corporate Counsel.net.
I have also been on Twitter, passing information along to those that follow me there and remarking on developments as they happen.
Stay tuned for updates to this post and more on the financial crisis.
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Originally posted September 26, 2008
The Big 4 are no Chicken Little. They’re not even the boy who cried wolf.
If only we had received the benefit of warning, however early, potentially exaggerated, and conservatively based. If only the Big 4 had told us, in the form of significant deficiencies, material weaknesses, going concern opinions, or some other way of signaling, that some of the banks were technically insolvent or potentially illiquid under certain scenarios.
And what if the FAS 5 required statements on contingencies had been used to signal something other that the probability of a legal catastrophe or a natural disaster? What if they had been, instead, made useful in pointing to less than doomsday market breakdown contingencies and that company’s readiness to weather them? Unfortunately, they’ve decided to shelve those proposals for fuller disclosure for now. And we get more and more and more opaque…
My esteemed friend Richard Murphy in the UK states the obvious. Who has not yet been called to account for this mess? The Big 4.
So let’s look at an update of where things stand , at least from a competitive position and as the shifting sands may have a potential impact on the staff and partners of the Big 4.
My expert assessment: Feds better watch how much toxic risk JPM and B of A have taken on in addition to what they already have. Both are audited by PwC and we know what I think of those guys….
And Citi (KPMG) has been suspiciously silent during all of this. What’s going on over there???? Update: Citi is in the running to take over Wachovia. Update (2) Looks like Wells Fargo is getting Wachovia instead and Citibank is suing. Yeah, thats a good use of capital.
Red
AIG – Taken over by the Feds. Why is PwC still the auditor when they are paying off their clients, the shareholders, for misleading them? Why isn’t this an independence violation?
Bear Stearns – Purchased by JP Morgan who uses PwC (Formerly Deloitte)
Merrill Lynch – Was Deloitte, bought by Bank of America (PwC)
Lehman Brothers – (EY) Bankrupt. Pieces being picked up by Barclays and Nomura. Dick Fuld gives less than satisfying performance in front of Congress on 10/6.
Washington Mutual – Deloitte
Northern Rock – Nationalized (PwC)
New Century - (KPMG)
Countrywide (KPMG) – Bought by Bank of America (PwC) B of A to $8.4 billion to settle claims that Countrywide defrauded mortgage customers.
Wachovia (KPMG) – This article does not paint a pretty picture. Update: Potential takeover by Citi (KPMG) or maybe Santander or Wells Fargo. Looks like Wells Fargo.
Fortis – (PwC and KPMG) Update Looks like they are now on the way out, perhaps as soon as the weekend of the 9/27-28. Update (2) Looks like BNP Paribas will pick up most of Fortis.
Bradford and Bingley UK - Nationalized over the 9/27-28 weekend.
Royal Bank of Scotland (Deloitte) moves from Green to Red on news of a run and potential bailout.
LLoyds (PwC)
Yellow
Fannie Mae -Suing Former auditors KPMG, now with Deloitte and recently put under US government conservatorship.
Freddie Mac – PwC and recently put under US government conservatorship. (For a nice timeline and commentary on Fannie/Freddie issues and takeover check out this report from Currency Trading.net)
Morgan Stanley – (Deloitte) – Morgan Stanley has agreed to sell a 21 per cent equity stake to MUFG, Japan’s largest bank, for a cool $9bn.
Goldman Sachs – Recently accepted capital infusion from Warren Buffet (PwC)
HSBC – (KPMG) Largest European bank by market value is also teetering. Cut 1100 jobs on 9/26
Societe Generale (Deloitte and EY)
Credit Suisse – (KPMG)
UBS - EY
Wells Fargo – (KPMG)
Green (for now)
JP Morgan – (PwC) Has picked up Bear Stearns and now Washington Mutual, both formerly audited by Deloitte
Nomura – (EY)
Barclays - (PwC) Buying US portion of Lehman
Bank of America – (PwC) – Bought Countrywide (KPMG) and Merrill Lynch (Deloitte)
BNP Paribas (Deloitte, PwC, and Mazers) Looks like BNP will pick up Fortis.
Credit Agricole (PwC and EY)
Santander – (Deloitte)
Wells Fargo – (KPMG) – Wells Fargo moves to Green now that they theoretically have the strength to buy Wachovia. However, Maria Bartiromo asked some tough questions of their CEO on Friday and I was not convinced.
