Lets think about it. If banks are having record earnings, why have TARP? Why have TALP? Why have PPIP? Why has Geithner said the banks will need a lot more funding? Why has the Fed said it is a bigger problem than we all know?
Think about it people! PAY ATTENTION!!! WFC had a great day and a great report. But it is hiding behind the M2M changes. The paper losses not being reported will allow all the banks to report record earnings because they have never had the freedom to report as they wish. Meridith Whitney tried to warn us that the banks will capitalize, short term, on the changes to M2M but in the long run, they will have to sell those assets and then take the losses. WFC make $3B but it is likely their losses in assets is around $15B or more. But we will never hear about that.
Its a great time to be a bank. Watch for all the insurers and REITs to try to qualify as a bank so they can also fall under TARP and M2M accounting changes.
Let the bulls have their day. There is nothing wrong with that.