Living The Dream

Now that we have seen quarterly earnings from the big banks BOFA, JP, Wells, and Citigroup. Does this mean we all can go back to living the dream? Hardly. From reading the earnings releases and various other outlets you realize that as of today the gap between reality and full blown dementia is at its greatest in history. That the banks which are enabled by governmental regulators continue to perpetuate, endorse and legislate the worst of all accounting frauds. Most of the upside earnings from Citigroup were market to market adjustments on the toxic sludge which is their balance sheet. Of course analysts will tell you that Citigroup has stabilized. What else would you expect from the same ones that by and large missed the 95% move downwards? This is why Wall Street financial analysts are completely useless. You don't need them. In bull markets they cant be trusted to give you an honest opinion and in bear markets they are so shell shocked at their obvious incompetence, they give you nothing except excuses why they have you in a stock that is down 95%. Thrown them along with their financial models in the garbage.

I have stated before that the only thing other than the obvious (Tax Payer)that saved the banks pork was relaxing FASB accounting rules. "Relax" means accounting fraud in the real world. "Relax" in the real world gets you a jail cell next to Bernie Ebbers. But "Relax" means something totally different on Wall Street and the CRE world. You add in millions in lobbyist campaign money to the traitors in DC and we all get a dose of what "Relax" really means.

But don't be fooled. The truth is if the FASB were showing the real world value of MBS/CRE assets on bank balance sheets, not one financial institution on the face of this planet would be solvent. The two core industries (Finance & Real Estate) that are also the most predatory in the USA would effectively be bankrupt. If the US regulators were to require banks to mark their residential MBS exposure to market, the housing sector would immediately go into free fall again. If the regulators forced the banks to value their CRE holdings anywhere near market value, the REIT sector would go into a tailspin. What we effectively have is the government endorsing accounting fraud that would make Enron, Worldcom, and Adelphia look like boy scouts. All in an effort to preserve a predatory rotten to the core system that should die a miserable death as soon as possible.

Citigroup, BOFA, JP, and Wells all have their hands dirty with accounting fraud. They all released great earnings on the surface. They say lower credit losses helped results. What they fail to mention is that they all would be nuclear waste if there was one single ounce of honest financial reporting left in this country.

What we have in this country is a welfare state at the bottom and even larger social safety net at the very top.

After the Goldman Potemkin story gets extinguished and there is no more middle class left in this country, I am pretty sure we will see massive epic lawsuits centered around these banksters.

Just think about it....

....All in an attempt to push things under the rug. Extend and Pretend. Kick the can. Hoping against hope like a degenerate gambler at OTB that all of these shenanigans will rekindle past bubbles via animal spirits.