Rip off the subprime Band-Aid
“This ‘Keystone CFO’ routine has got to stop,” says David Weidner in MarketWatch. The “slow drip” of financial institutions reporting write-downs or exposure to subprime mortgages—yesterday it was E-Trade—is just prolonging the “torture.” It’s time for “an honest, conservative accounting of where these big institutions stand.” If a firm can’t accurately value its assets, it should write them down in “a one-time event.” But there are finally some signs that Wall Street is owning up to its “dire straits.” Like the $100 billion SIV bailout fund: while “more a Band-Aid than major surgery,” it’s at least an acknowledgment that banks “need to help themselves” out of this mess.
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