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Rolfe Winkler, CFA  

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  • Bank of America: With Unsustainable Profits, Its Balance Sheet Is Still Ugly [View article]
    You two are funny. There's no backtracking here, and that's the point. All of the banks employed obvious accounting gimmickry to goose reported profits. Nothing reported was sustainable. Not from a single large bank.

    The only substantive difference between today and three months ago is that Treasury has put forward a plan to buy toxic assets at above market prices to rescue bank balance sheets. (The PPIP)

    This is a terrible idea because it just replaces bank-financed leverage with government leverage in order to artificially inflate asset prices.

    If and when PPIP gets off the ground, it will benefit bank shares. Until then, nothing has changed. Net interest margins are a bit better, but writeoffs will totally overwhelm any profits from new lending.
    Apr 21, 2009. 09:14 AM | 1 Like Like |Link to Comment
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