Phantom condos and phony accounting

Jim The Realtor shows a brand new expensive looking condo development in San Diego County that has no gas meters hooked up. That means they never sold any. Just more empty condos, and they are not counted on new home inventory reports.

Financial author Michael Lewis thinks another day of reckoning is coming. I agree. Like the phantom condos that don’t appear on reports, too many of the accounting numbers are not based in reality.

LEWIS: I think that we are in for another day of reckoning down the road. I just don’t know when it is.

I think that they haven’t even properly evaluated the institutions. They haven’t been honest about what these institutions have on their books. They’ve had phony stress tests.

So, we’re in a kind of, I think, right now, in a period where there’s a false sense that it’s over, that the crisis is passed. I don’t think the crisis is passed.

There are new waves of foreclosures coming as yet more mortgages reset to higher levels. Hundreds of small banks are in wobbly condition and may fail.

Worse, too many regulators play nice with Goldman Sachs and their ilk because when they’re out of government, then those same companies will make them rich. So, it’s best to not piss them off too much.

This is not government of, by, and for the people, is it? In fact, it’s nowhere close.