Companies are reporting large first quarter profits, but the Dow is tanking—what is going on? Bank of America reported $4.2 billion in Q1 profits, this is on the heels of Wells Fargo, and Citigroup positive announcements that came in previous weeks. But their shares are falling, along with the shares of many other companies. The investors are not buying that reports indicate real profitability. Rather, it’s some creative accounting that allows the banks to show profits. Also, Wall Street just doesn’t believe that this deep recession will not continue to impact the profitability of the commercial businesses outside of the banking sector (the sector that received bailouts, by the way). And inasmuch as the employment situation continues to deteriorate the risk of defaults on mortgages and consumer loans linger, impacting everything else. The Dow and other major indexes were falling all day today, posting losses of close to 4 percent on average. By 3 pm, the DJIA lost 281 points and continued on a downward trajectory. The Conference Board report on the direction the economy will be heading for the next 6 months was not encouraging. The Leading Economic Indicators index compiled by the Board fell 0.3 percent in March, following a 0.2 contraction in February. The index has not risen since last June. So the debate continues: “Have we, or haven’t we reached the turning point in this recession?” Two weeks ago when the Dow reached the 8,000 point level it certainly seemed we did. Now, the point we are at is more of an “inflection” than a “turnaround.” Stay tuned. Finally, President Obama convened his cabinet for the first time today and asked to cut $100 million out of the federal agencies budgets over the next 90 days. Alright, so everyone will start counting the paperclips and pens, to make sure they are not ordering extra. But that’ll be the extent of the effect of this measure. The total budget is $3.5 trillion, so the gesture is largely symbolic—and it’s doubtful that anyone will be cancelling their tea-parties because of this.