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Are recent bank profits for real? Should we be buying shares?

Since the DOW and the S&P touched 12 year lows of 6763 and 666 respectively in early March 2009, the stock market has rallied by approximately 20%. The move has been fueled mainly by the Financials.

So what has changed since the massive shock of the September 2008 Financial Crisis?

A few Banks like Citibank, Bank of America and JP Morgan have all come out to say they made money in first 2 months of 2009. These claims of course spearheaded the current rally in the Financials and the broader market.

However, taking a closer look at these claims and insinuations, one could ask how Banks that were deemed insolvent only a few months ago have suddenly returned to profitability with overwhelming alacrity.

Recent earnings reports from Goldman Sachs, JP Morgan Chase, Citibank and a preview Wells Fargo's numbers have all been better than expected and have resulted in the Financials rallying higher and higher.

So how could so many investors be so wrong a few months ago when they sold banks into multi year lows?

Or could they have been right anyway?

Let's look at some key economic indicators between the months of September 2008 and March 2009, a climate where these Banks have claimed to make such remarkable profits.

First of all, nearly 2.6 million jobs were lost in 2008 alone, with another 1.9 million more lost in the first quarter of 2009. To be quite specific, let's look some headlines of the Government's Job Reports between the months of September 2008 and March 2009.

-159,000 Jobs Lost in September 2008, the Worst Month in Five Years

-240,000 jobs lost in the US in October 2008

-The nation's employers cut 533,000 jobs in November worst in a generation

- The U.S. economy lost 524,000 jobs in December, the 12th straight month of decline.

-Employers slashed 598,000 more jobs in January as unemployment rate climbed to 7.6%.

-651,000 US Jobs Lost in February; Unemployment Rate Now at 8.1%

-US jobs lost in March 2009 totaled 663,000; Unemployment Rate Now at 8.5%

Add to this the wave of foreclosures and bankruptcies filed by individuals, corporations and institutions, and you will get a clear picture of a depression at the least.

Examples are all around us. Household names like Linen and Things, Circuit City and Sharper Image are now history thanks to the financial crisis.

Only last week Mall Operator GEN GROWTH PROP INC (GGP) filed for bankruptcy protection sparking concerns about new wave of trouble in commercial real estate.

So

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