by CHEF MANGO..
Putting the financial system on a solid foundatuion is critical to relaunching the US economy says Lehman Bros.
There's been a breakdown in banking - yah like you never heard before!!
At root the problems of convergence in the sector have had commercial banks on low-interest earnings pushing their bottom lines by lucrative investment bank-style charges or fees.
In turn such competitive pressuires have led to inducements to CEOs for procuring securities business et cetera.
With business methods failing TRUST is on the wane. As are bank earnings, the top 5 - Citigroup, JP Morgan Chase, Merrill Lynch, Goldman Sachs and Morgan Stanley - levelling incomes at 1998 levels.. AND.. coming in with a HUGE bad debt load off corporate lending.
NYU's Stern School puts distressed/defaulted corp bonds/loans at $880B. As losses rise big firms face legal action from investors convinced of a "massive con". 300 class actions are pending for up to $5B.
Wall St looks real sick and investors are staying home against a perceived "rigged game". US confidence and credibility - hallmarks of rise and shine - are taking a coldbath.
Big picture watchers (last decade and a half) tell how market forces shoved into a straight-laced banking sector has "made the whole financial system corrupt" according to respectable advisors, Rohatyn. And yes, repackaging loans into securities was no more than playing to the whims of the market.
Quinn Mills at Harvard's Biz School says banking excesses were a "train wreck waiting to happen."

All reading like a big bottom line of ERRORISM.. and with Pres. Bush's Administration pushing the wrong (read military) 'spend-up' buttons it can only get worse..
Bye for now
CM.
Text and Verse for believe you me's:
http://www.businessweek.com/magazine/content/02_40/b3802046.htm