The shit has hit the fan and Lehman Brothers was busy cooking the books before they imploded. Where have we seen this before? Let's see, we had Enron, Worldcom, Citigroup, accounting scandals, AIG scandals and here we are.

Maybe we got a bail out because it is within bankruptcy court these discoveries are made. With a Lehman Rescue would we ever have known this latest rip off and scam?

Below is a Dylan Ratigan show clip, where he explains what Lehman Brothers did, in a nice visual and analogy so you can grasp the magnitude.

Next, you need to read the Bankruptcy Court appointed examiner, Anton R. Valukas's report, provided here by Jenner & Block and 2200 pages long.

Deal Book explains what a repo 105 is:

Repos, short for “repurchase agreements,” it involved what amounts to a short-term loan, exchanging collateral for cash up front, and then unwinding the trade as soon as overnight.

and illustrates how it works with this graphic:

Reuters put up a graphic, below, giving a visual on how repo 105 at Lehman Brothers worked.

Naked Capitalism points out Tim Geithner, running the New York Fed at the time is implicated in the Lehman Accounting Fraud from this report. Oh yeah there he is again (recall AIG 100% payouts).

The unraveling isn’t merely implicating Fuld and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations.

We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down (and the failed Barclay’s said this was not infeasible: even an orderly bankruptcy would have been preferrable, as Harvey Miller, who handled the Lehman BK filing has made clear; a good bank/bad bank structure, with a Fed backstop of the bad bank, would have been an option if the Fed’s justification for inaction was systemic risk), the NY Fed at a minimum helped perpetuate a fraud on investors and counterparties.

Seeking Alpha goes through the accounting fraud, shows how it's illegal through Sarbanes-Oxley, which was supposed to prevent the next Enron and then shows how the Federal Reserve, the SEC did nothing and were complicit.

Zero Hedge asks when will former Lehman Brothers CEO, Richard Fuld, leave the country and go into hiding to avoid criminal charges. The report judiciously calls him grossly negligent.

From Bloomberg, JP Morgan Chase and Citigroup helped pushed Lehman into bankruptcy and now banks are issuing denials that they too, used 501 repos.

Banks then finally squeezed Lehman, wanting their cash for fictional trash back:

JPMorgan Chase & Co. and Citigroup Inc. helped cause the failure of Lehman Brothers Holdings Inc. by demanding more collateral and changing guarantee agreements, according to a report on the biggest bankruptcy in U.S. history.

Wow. See what a bankruptcy can do? Why expose all sorts of stuff that is in the public interest. No wonder so many financial institutions were deemed too big to fail. Makes me wonder if the phrase should be re-calibrated to too big to expose.