One Eyed Moody's Even Seeing the Games

When a rating agency like Moody's can see the games that are being played by the financial stocks, you know the gamers must be hardcore.

From Bloomberg

Banks have failed to make adequate provision for the losses on loans and securities they face before the end of next year, Moody’s Investors Service said.

U.S. banks may incur about $470 billion of losses and writedowns by the end of 2010, which may cause the banks to be unprofitable in the period, the ratings company said in a report published today.

“Large loan losses have yet to be recognized in the banking system,” Moody’s said. “We expect to see rising provisioning needs well into 2010.”

No really. You mean in Q1 the dramatic decrease in loan loss provisions for banks was not tied to economic reality? I have been saying for months that Q1 and Q2 for banks would look awesome and Q3 and Q4 should look horrible. As you get closer to an acutal audit the fewer games you can play. Underreserving for losses. Obvious that even Moody's can recongize it.