Wednesday, August 11, 2010

Day 283 – Bringing in the Sheaves

As ye sow, so shall ye reap.

          We’ve filled out all the papers to file bankruptcy and reviewed them with the lawyer who is handling our case. We found him in the yellow pages. He specializes in bankruptcies. My hope is that this means he knows what he is doing. I wouldn’t say that he is a class act, but for a bottom feeder he seems competent enough.
The bankruptcy court looks back 6 months from the filing date to do an earnings test. This means that we will need to wait one more month to actually file because, if we file now, my severance pay will fall into the six month period and we will fail the test. Next month—no problem. By next month my average monthly income, looking back the requisite six months, will be well below the poverty level. Isn’t it odd to be in a position to refer to that sorrowful happenstance as ‘no problem?’
The bankruptcy itself is still depressing to me. I never figured myself to be in this boat. Odd as it may seem from a logical point of view, I’d rather get a job and continue to eke out monthly payments for the rest of my life to banks that have in effect orchestrated my indenture than to use the legal means available to get out from under the burden.
I keep thinking back to the comments posted by Jigaboo at Going Concern about how I’m giving accountants a bad name. While I know his assessment isn’t accurate, or even logical in the circumstances, we do agree, Jigaboo and I, that I have failed to live up to my own sensibilities and training. Fortunately, for my own sense of self-worth, I am not alone in this failure, nor is my failure even very notable in the grand scheme of things.
The banks to which I owe money have failed in a much more spectacular fashion than I have. They haven’t actually collapsed like Lehman Brothers, but they have taken large sums of money from Treasury and borrowed large sums at zero interest from the Fed in order to stay afloat. The fact is that the banks to which I am indebted on my pesky credit cards, principally Bank of America and Citibank, are way more leveraged than I ever was, and they will, because of this, forever be precluded from calling me irresponsible.
If they can take bailout money and use it to pay huge bonuses to the executives and traders who got them into trouble in the first place, I ought not to feel too bad about taking advantage of the bankruptcy laws that were put into place to protect me from folly, my own or someone else’s. It’s just too bad that I can’t orchestrate a bankruptcy to give myself a big bonus in order to retain my talent. After all I don’t want myself running off to ply my singular penchant for nonsense on behalf of some other self. I’d rather keep my self where it is, in spite of its lackluster performance to date. Alas I fear that I may lose my self if I can’t come up with the wherewithal to offer said self an attractive and competitive compensation package.
I can’t address the failures of the big banks without also addressing the failures of their audit firms—the supposedly independent accountants whose function it is to assess the validity and value of the assets and liabilities on the banks’ financial statements and tell the rest of us whether or not they are ‘fairly stated.’ There’s been a lot written already about how these auditors have also failed in spectacular fashion. There will be a lot more written in the coming months as public and regulator focus shifts from the financial institutions that robbed us of our prosperity to the accounting firms that were supposed to keep them honest. The irony is that my friend, Jigaboo, apparently does not think that these people are making accountants look bad.
For an thoughtful, incisive, and wholly excellent treatment of the nature and ramifications of at least one audit firm's failure to live up to our expectations, I direct your attention to an article by Francine McKenna at re:The Auditors.

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