I knew something was up when Citigroup shares were hovering just over penny stock territory and the media began to report on a “leaked” internal memo from the company’s CEO. In the memo, Vikram Pandit praised his staff and made the surprise announcement that the company was profitable in January and February. “We are having our best quarter-to-date performance since the third quarter of 2007,” he wrote.

Rather than characterize the charade as the public relations stunt that it obviously was, the compliant mainstream media reported the “leak” as if it were a rare inside glimpse that we were lucky to have found out about.

Following the Citi “slip”, Bank of America CEO Kenny “Bug Eyes” Lewis stated that his bank was also profitable in January and February and that B of A expected to ride out the remainder of the depression without additional help from taxpayers. Great, Ken. Glad that $65 billion was helpful.

Then Jamie Dimon, CEO of JPMorgan Chase revealed that his bank too was in the black this year. Hooray… the banks are profitable again! The depression is over!

Not surprisingly, the market surged on the news, with the financials leading the way. In less than three weeks Citigroup gained 200%, Bank of America was up 150% and JPMorgan Chase rocketed 80%.

But not so fast… it appears that the banks “profitability” is simply another bailout in disguise and further evidence of financial fraud upon the American people by Wall Street and their cronies in Washington.

A blog called Zero Hedge recently published the perspective of an anonymous banking insider which sheds light on the continuing scam.

The government has maintained that it must continue to prop up the former insurance giant American International Group (AIG) because allowing the company to fail would result in a cascade of counterparty losses that would cause the entire system to collapse. Apparently, the goal is to keep breathing life into the zombie AIG until the bulk of the company’s credit default swaps (CDSs) and collateralized debt obligations (CDOs) and the rest of the alphabet soup of financial insurance products are unwound.

It was assumed that this would be at a loss to AIG, of course. But now that the taxpayers are on the hook, it appears that AIG really threw in the towel, settling the outstanding contracts under terms that are extraordinarily generous to the counterparties (the big banks) and extraordinarily unfavorable to U.S. taxpayers, who are footing the bill.

Here’s how the insider who sent his report to Zero Hedge put it“During Jan/Feb AIG would call up and just ask for complete unwind prices from the credit desk in the relevant jurisdiction. These were not single deal unwinds as are typically more price transparent - these were whole portfolio unwinds.