In a barely-reported item, the SEC has announced that it is taking action to “make it harder for public [banking] companies to disguise their level of debt.” I’ll bet most investors did not realize it was possible to do so, but banks have been able to use a “window dressing” technique in their accounting statements to make their balance sheets look stronger than they really are. Both links below discuss this proposed SEC action, and note that the now-defunct Lehman Brothers Bank used this arcane “accounting trick” just before its collapse two years ago. The articles indicate many banks are still using this same accounting trick.

I find two things about these reports very interesting. The first thing is that this reveals that banks have been able to “disguise” their true financial condition to investors, depositors, shareholders and the general public for an indefinite amount of time already and they have been able to do so with government approval under the “old rules.” This shows that there has been an ongoing and significant level of cooperation (collusion?) between the banks and the government to hoodwink the general public about the true level of fiscal problems in the banking system.

The second thing of interest is that one link below makes it clear that the proposed rule-making by the SEC apparently has no intention of completely taking away the ability of banks to dupe the public about bank’s real financial condition. The second link quotes an SEC Commissioner as saying that “the expanded disclosure rules are helpful but won’t necessarily prevent deception by firms to make their balance sheets appear less risky than they are.” Isn’t that comforting? Not only is the SEC proposed rule-making acknowledging that government rules have permitted banks to “disguise” their true financial condition in the past, but the SEC is also saying that any proposed SEC rule-making will still permit some “deception” to continue. If even an SEC Commissioner expresses no confidence that “deception” and the “disguising” of the financial conditions of banks will come to an end under any proposed SEC actions, how can John Q. Public have any confidence in either the health or honesty of the American banking system? Obviously, if the banks were in great financial health, there would be no need to “disguise” their true condition. This means that the banks must be in worse shape than they want to disclose to investors, the public or the world community if they feel the need to “disguise” their true financial condition.

Revelation 17-18 prophesy that the current banking-based, global financial system will collapse in the latter-days of our current age. That banks are trying to conceal their true financial condition reveals that our American (and global) financial system is in worst shape than it is willing to admit. Revelation 18:3 prophesies that the global financial system of the latter-days (which is destined to collapse) will be composed of an alliance of the “merchants of the earth” (i.e. “global multinational corporations” in modern terms) and the “kings of the earth” (global governmental officials). According to this prophecy, these two entities cooperate to enrich themselves at everyone else’s expense. Does this sound like our modern system which has a “revolving door” of people who go back and forth between global multinational corporations and governmental offices? The fact that the SEC apparently has no intention of proposing any rules which would actually eliminate the banks’ accounting deceits shows how accurately Revelation 18:3’s prophecy applies to our modern world! For more in-depth information on why the Bible refers to our modern, global financial system as “Babylon the Great,” please refer to the articles at this website which are mentioned in my previous blog posts.