“Although perfectly legal, this move is also perfectly delusional, because some day soon these assets will be written down to their fair value, and it won’t be pretty.”
-Steven Roth, professor of management at the Tuck School of Business at Dartmouth College, on Bank of America’s earnings fraud
We been discussing how many of the recent profits were not “real” — i.e., based on one time sleights of hands — losing a losing month, AIG flow throughs, bailout monies, etc.
Thus, it is gratifying to see on the front page of the NYT Business section, Andrew Ross Sorkin’s article with the provocative but accurate title, Bank Profits Appear Out of Thin Air.
Read on...
Lately Peacenik hasn't mentioned the "black hole" that has been sucking the world's delusional wealth away. Obama's and CNBC's PR campaign had a lot of people thinking the worst was over. The DOW had it's best rally since 1938. But. But the black hole has not gone away. The PR is failing. Yesterday the DOW lost almost 300 points. The public is no longer believing in the banks' mysterious profits. Today the Globe reports that banks are bracing for huge credit card losses. Today we learn again that pension plans are woefully underfunded. States, provinces, countries, cities, towns, companies, and people are all broke. Can a world-wide run on banks happen in 2009? Do you have enough cash to last a couple of weeks? Peacenik's black hole sensor is tingling.
