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Exclusive: Big Banks' Recent Profitability Due to AIG Scam?

All this may well be true, but additionally, with zero interest rates the banks loan books should be very profitable. The spreads should be very good and should contribute to their profitability.

Added Debt Won't Rescue the Great American Ponzi Scheme

All of this is superbly rational, but one should remember the famous observation by Lord Keynes: The market can stay irrational longer than you can stay solvent.

Don't Blame Mark-to-Market for This Crisis

When pundits like Forbes come out against Mark to Market they are not saying that it was BEHIND the crisis. What they are saying is that it is a cheap and effective way to fix the crisis going FORWARD. Even though it is clear to me that it was greed and irresponsibility that brought about these conditions, I can see a strong argument that a suspension of the M2M requirements is a relatively easy way out of the crisis.

Sure M2M is proper and suspending it will bring about an improper, less-than-optimal situation. But so is spending trillions to support the banks, or nationalizing them (temporarily). Everyone agrees that the situation is so serious that something has to be done even if it involves bending or suspending some of the usual prudent rules.

Why rule out M2M?

If there is a need (and there is a need) to punish those whose greed got us to where we are, then we could seek a way to link suspension of M2M to the continuation of previous management.

But let us not confuse an awareness of how we got to where we are with the search for the best method to get us out of the mess.