Okay, sure, we already knew this: Bank Profits from Accounting Rules Masking Looming Loan Losses. First-quarter bank profits were nothing but a chimera, the finance industry's version of a griffin that vanishes with heavy wingstroke over a nearby rainbow.
Now for my Jon Stewart impersonation. Ahem.
So let me get this straight: Citigroup and friends can kick sand in the face of 98-lb. government weenie Tim Geithner -- hey, we don't need your plan to buy our crappy assets! -- because they're healthier now, and if you don't believe that, hey just look at their first-quarter profits -- which, uh, by the way, were all make-believe, like your two-year-old daughter's imaginary friend in the sandbox. Oh yeah. I've got LOTS of confidence this is going to turn out well.
Prediction: There will be a nasty double dip in this recession; the green shoots are brown shoots that have been spray-painted. We will face the bank problem once more. And everyone will moan and gnash their teeth and say, "But I thought they were getting better!" And the banks will trot out a lame line in the vein of, "It's not our fault; we didn't foresee things would get this bad."
Roger Ehrenberg nailed it here. The government is closing its eyes, taking the path of least resistance, instead of taking the hard road that would lead to a faster and fairer resolution of the financial industry's problems.