Today's good news?

Given market plunges around the world, we may need something to cheer us up a tiny bit:

Even Citigroup Inc., by far the hardest hit of the big U.S. banks by subprime-related problems, earned $3.62 billion last year. That was with a $9.83 billion fourth-quarter net loss and more than $22 billion in writedowns and additions to loan-loss reserves.

For JPMorgan Chase & Co., the third-biggest U.S. bank, the focus was on the 34 percent drop in fourth-quarter profits from a year earlier. Its full-year $15.4 billion profit, a record, was largely ignored. ...

Economist Robert E. Litan, a senior fellow at the Brookings Institution who has done numerous studies of the U.S. financial system, said the banks are in far better shape than the dire assessments suggest.

''Strip out the losses and Citi could make close to $10 billion a quarter,'' Litan said. Noting how quickly the bank has been able ... to replace the capital depleted by losses, he added, ''Why would anybody buy stock if they thought Citi was going down the tubes?''

The link is from Mark Thoma.  This is one of several reasons why I don't see solvency problems -- apart from homeowners that is -- as today's major economic plague.  Elsewhere, it seems that tax-free municipal yields are higher than Treasury yields, an unusual and counterintuitive state of affairs; this is a sign that large institutional investors are spooked and have their head in the proverbial sand.  They've run into T-Bills, but they have no reason to hold the tax-free munis.  That also means if you see a big spread between T-Bills and commercial paper, you shouldn't interpret it as a high implied default risk for major companies.