Maybe, but the odds are better.
I don’t think so, but time will tell.
Now we have bureaucrats running things and running off the top talent with pay caps and bonus taxation.
That leaves the mediocre and the desperate to run the banks.
Well, let’s understand why they’re a little better — for now:
1. One of AIG’s counterparties that was paid off as part of the $180B we’ve thrown down that rathole was Wachovia, which is now owned by Wells Fargo. That’s about $700 mil right there.
2. They’re getting their capital dirt cheap - their NIM - net interest margin - is probably very, very good right now. As in “once in a lifetime good.” The interest rate at the short end of the curve is fantastically cheap.
3. FASB has allowed them to move the Type 3 assets back out of the limelight again.
Did they do well? Yes. Did they do so well that they’re out of the woods? Maybe. A highly qualified maybe. There’s plenty of more debt that is even now being downgraded, there is the CRE wave of defaults coming, there’s corporate debt, builder/developer loans, student loans, credit cards, etc that are all non-performing.
I find the timing of this pre-announcement suspect and suspicious as well. Methinks that this is a PR move to make sure that they’re not on Turbo Timmy’s list of insolvent or troubled banks in the very near future...