Financials: Do what I say not what I do…

So we have a strong rally in the last couple of days in the financials. So is the market happy with the level of disclosure from the financials re CDO and subprime exposure? Let's take a look on some events of the financials:

Goldman Sachs (GS) says "… no exposure…" the stock rallies by more than $7 billion. Wow!!! But level 3 assets are huge compared to their equity base, just take a look:
Equity base: $39 billion
Level 3 assets: $72 billion
Level 3 to equity ratio: 185%

Bank of America (BOA) " …manageable" of writing down $3 billion of loans after not disclosing it in their quarter, and expects more profit declines as a result of the credit market tribulations.

Countrywide Financials expects profit next quarter; it rallies after its conference call although its core business is suffering a 48% decline in loans. Its business model is suffering as it depends on securitizations. How will it do more business and profit next quarter?

Merrill Lynch (MER) waffled on their exposure and still expects some write downs next quarter, but the stock seems to bottom and gained some 8% and change.

Without exception all financials are up although more write downs are coming and most of them did not disclose proper exposure.

More importantly my issue is the trust and confidence in their reporting. They have stone walled every one about their financials and write downs and they still do. Do you take their word although all indicators and analysis shows that credit squeeze is not over yet and will show its ugly head in their financials. Do you believe in the rally and the confidence vote?

I am not trying to pick a bottom or call there will be more declines, I am not smart enough, but I do not have enough comfort to buy a significant position. I do like BOA but I will wait to research if really their exposure is "manageable".

More on BOA later.