A NEVER ENDING QUESTION

It's a never ending question. 

Just whom does one believe?

Last week big banks JP Morgan and Goldman Sacs drew some criticism from the Federal Reserve over the capital plans of the two giants. JP Morgan CEO Jamie Diamond also faced claims that he tried to cover up a $6.2 billion trading loss by misleading regulators and investors.

For weeks now, especially since the run-up in the stock market, just about all we've been hearing is how much better prepared for an economic downturn, should it occur, the big banking industry is.

Neil Barofsky is a name most likely unfamiliar to many.  A senior fellow at New York University, Barofsky is also a former special inspector general of the 2008-2009-born TARP or the $700 billion Troubled Asset Relief Program. The one used to supposedly right the USS Big Banking.

Barron's this past weekend ran a blurb, "Banking's Bitter Harvest," quoting Barofsky: "It's foolish to believe we're not on a path to another crisis."  Now for the skeptics, it's true Barofsky has a new best-selling book out, "Bailout." 

But nevertheless his point should be of interest. He says the big banks are even bigger today than before the bailout and still viewed as too big to fail.

 Part of restoring public confidence is assuring that the banks have learned their lesson and are more financially sound for their ordeal. In many ways it's tied to the wealth effect the MSM pushes. 

Take a look at this from The Big Picture.
http://t.ritholtz.com/bigpicture/#!/entry/discuss-customers-who-distrust-their-banks,5147ab21d7fc7b5670738c90

Or here.
http://bucks.blogs.nytimes.com/2010/02/03/the-least-trusted-banks-in-america/