Surreality vs. Reality?

An article at Yahoo! Finance Tech Ticker, "Elizabeth Warren: 'Problems Lurking' in Same Banks Tim Geithner Says Are 'Much Stronger,'" reveals some interesting differences of opinion about what some might consider to be the backbone of our economy:

First up, we have this:

Three years ago this month, the first major financial domino fell as Bear Stearns was forced to accept a "take-under" offer from JP Morgan. We've come a long way from the dark days of 2008 and "the core of the American financial system is in a much stronger position than it was before the crisis," Treasury Secretary Tim Geithner's recently declared. (See: Geithner's Victory Lap: Claims Financial System "Much Stronger" vs. Before Crisis)

Indeed U.S. banks posted net income of $87.5 billion in 2010, the best since 2007.

And then there's this:

But former TARP Cop Elizabeth Warren isn't as sure as Geithner that the coast is clear.

"I think there are parts [of the system] that have changed but I still worry, a lot," she says. "We have more concentration in the banking industry than we had before [and] we're going to have a ‘too big to fail' problem lurking around the edge of this financial system until we've demonstrated how we're going to deal with financial institutions who take on too much risk."

Surreality vs. reality?

Comments

[Doable Finance]

One is a government guy and the other is former head of "whatever." She is seeing things differently as she is not a part of the strength and weakness of the system anymore whereas for better or worse he is still responsible for how the economy is holding up.

[nowhereman]

HE'S ALSO RESPONSIBLE FOR HOW IT'S BREAKING DOWN.

[MG]

They're both right. The precedent now exists for another bail out of the TBTF's. Terrorists, martial law, falling stock markets, ATM's that won't work, these threats will be used again. That's why the criminal Geithner is correct when he speaks to the strength of the TBTF's. More interconnected as Warren says only adds to the inevitability.

[Clean house... spring is coming!]

Keep Warren..add Farrell, Bill Black, and Janet Tavakoli...clone Pecora...go to town!

Four time bombs that will blow up Wall Street
Commentary: Too late to jail bank CEOs; only revolution will succeed

SAN LUIS OBISPO, Calif. (MarketWatch) — Put Goldman Sachs CEO Lloyd Blankfein in jail for six months, and all this will stop, all over Wall Street and America, a former congressional aide tells Matt Taibbi in his latest Rolling Stone attack, “Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing are doing more to protect them than to prosecute them.”

http://www.marketwatch.com/story/four-time-bombs-that-will-blow-up-wall-street-2011-03-01

[Christopher Hill]

Michael, not sure if you know about this tally that Reuters put out last week concerning writedown/credit losses at U.S. and European banks since 2007. Eye-opening, to say the least:

"FACTBOX-European, U.S. bank writedowns, credit losses"
http://www.reuters.com/article/2011/02/24/banks-writedowns-losses-idUSLDE71N1J720110224

Based on that data, and the fact that the number of "problem banks" in the U.S. grew to 884 in the fourth quarter- with total failures reaching an 18-year high in all of 2010- I don't believe the U.S. banking system is out of the woods just yet.

[Mark]

Neither of their opinions will matter. We're already in a debt-monetization trap and that will drive everything.

http://www.planbeconomics.com/2011/03/02/bill-gross-who-will-buy-treasuries-when-the-fed-doesn%E2%80%99t/

[$200 CHEESEBURGER....hold the pickle]

Wall Street prospers, Main Street suffers

http://www.youtube.com/watch?feature=player_embedded&v=g9uyyS-h_5Q

[Well it seems surreal (valuations for bonuses) on Wall Street....... and harsh realities on main street]

John Hussman had somewhat scathing comments about status of FASB 157
and the Boards unwillingness to actually hold their constituents to a
reasonable standard in this weeks commentary.

http://hussmanfunds.com/wmc/wmc110228.htm

Scroll down to the open letter to the Financial Accounting Standards
Board section.

An Open Letter to the Financial Accounting Standards Board

To: Financial Accounting Standards Board
From: John P. Hussman, Ph.D.

Dear FASB Board members,

As one of the few economists that urgently warned three years ago
about the oncoming financial crisis (see Minding the Hinges on
Pandora's Box ), I am not simply disappointed, but stunned that the
FASB has indicated a willingness to move back to amortized cost in the
accounting of bank loans, in a banking system that is well known to
have trillions of dollars in mortgage loans with underwater
collateral, as well as millions of delinquent but unforeclosed loans.
Rather than opting for procedures that would require adequate
reflection of impairment or even quasi-market valuation such as 3-year
averaging, the FASB appears intent on laying a lovely turf lawn over a
toxic waste dump.