Happy Friday. A selection of thought-provoking prose for you this morning:
What’s still wrong with Wall Street (Allan Sloan/Time) I’ve never seen Allan so riled up:
Welcome to Round 2 of Main Street vs. Wall Street. The divide is the worst I’ve seen in my 40 years of writing about finance…
Main and Wall are never going to love each other. And they probably shouldn’t, because their interests aren’t identical. But if we’re going to get through this mess as a society and regain our prosperity, Main Street and Wall Street need to understand each other. And they don’t.
To rein in pay, rein in Wall Street first (New York Times):
Why were those profits so high? And did society get its money’s worth out of them? If those surging profits reflected the financial industry’s success in helping the real economy, we might be jealous but not contemptuous. You don’t hear a lot of carping about how Bill Gates and Steve Jobs became so wealthy.
Banks are still drowning in bad commercial loans (Fortune)
Real estate research firm Foresight Analytics estimates banks should have booked losses on around $110 billion of defaulted commercial real estate and construction loans. But so far they have taken their medicine in only about a third of those cases.
That means the banks could face a backlog of $70 billion or so defaulted but unreserved loans as we head into the teeth of down cycle in commercial real estate — where the bulk of bubble-era loans are due to be repaid or refinanced between 2010 and 2012.
The recession ain’t over by a long shot (Ron Paul/Forbes):
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble’s collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been.
GM faces long odds in paying back its bailout (NPR)
Signs of an improving economy in patchwork nation (Christian Science Monitor)
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