Toxic Assets Still a BIG Problem

Here's an interesting and informative article that talks about the huge amounts of bad debt on the balance sheets of our banks, that with a stroke of a pen and a change in accounting rules, suddenly disappears. Out of sight, out of mind, right? Well, not so. I have a feeling that the huge lump of dirt the government swept under the rug is still there, and we'll see its effects at some point.

Read it HERE

Excerpt:

Banks’ Toxic Assets Still There: The Accounting Cannot Be Trusted

In other words, much of the improvement we have seen in the banking system, particularly among the big 19 stress-tested banks - such as J.P. Morgan (JPM: 42.21 +0.97 +2.35%), Goldman Sachs (GS: 163.76 +4.54 +2.85%) and U.S. Bank (USB: 22.02 -0.08 -0.36%) - has come from changes in the accounting rules, rather than a change in the fundamental economic value of the securities. There has been some real improvement in the condition of the banks, but that is mostly due to the large round of capital raising in the wake of the stress tests.