Over the next couple of months banks will almost certainly report that they were profitable during the final three months of 2009 and are on the road to recovery.
Don’t believe it.
The turnaround banks are touting is only possible because they’re still refusing to acknowledge $1 trillion or more worth of bad loans on their books.
The banks will never respond to President Obama’s demands to make more new loans until they’ve dealt with all of those overvalued assets.
Nor will the Federal Reserve stop abusing the nation’s savers by driving interest rates to record lows until the banks start lending again.
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