Oh goody, they learned nothing

Here I was thinking that the major lesson that banks and financial institutions would pick up from this near apocalypse were to not tie up all their assets in poorly thought out gambles and to act like they had a shred of common sense. What was I thinking? No, what they learned is that they weren't being crooked enough and that there were quite a few corners that could still be cut.

Big banks in the U.S. say they’re on the mend. The five largest were profitable in the first quarter, rebounding from record losses for the industry in the fourth quarter. Share prices have jumped, with the KBW Bank Index doubling since March 6.
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The revival may be short-lived. Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are.
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Citigroup’s $1.6 billion in first-quarter profit would vanish if accounting were more stringent, says Martin Weiss of Weiss Research Inc. in Jupiter, Florida. “The big banks’ profits were totally bogus,” says Weiss, whose 38-year-old firm rates financial companies. “The new accounting rules, the stress tests: They’re all part of a major effort to put lipstick on a pig.”

Further deterioration of loans will eventually force banks to recognize losses that their bookkeeping lets them ignore for now, says David Sherman, an accounting professor at Northeastern University in Boston. Janet Tavakoli, president of Tavakoli Structured Finance Inc. in Chicago, says the government stress scenarios underestimate how bad the economy may get.

Wait, it still might get worse? I was fucking leading the diminished expectations of happiness parade in the previous post! Thanks for the heads up, now I look like a jackass.

But hey, pretend profits are a step up from actual losses. If you want to look at a silver lining, things used to be so bad that banks couldn't even use bullshit accounting to hide the damage. Now they can. That's progress. Besides, people are too quick to judge and too quick to throw out terms like "bullshit accounting". Other than Enron, Worldcom, and Arthur Andersen, what companies have destroyed themselves with accounting magic? Don't try to think of any, just accept that it was only those three. Besides, isn't the best time to start idiotic accounting practices right after you narrowly avoided death for your idiotic mortgage, loan, and securities practices? I mean what are the odds of two financial apocalypses in the same fiscal year? I'm sure nothing bad will come of this. It all sounds so very smart.