Pros Say: We Need More Bailouts, Bigger TARP

Thursday: JPMorgan Chase's Q4 profit beat expectations — but was disappointing nonetheless, falling 76 percent. Bank of America and Citigroup shares are skidding at press time. Uncertainty in the tech sector continued; after Wednesday's bombshell that Apple CEO Steve Jobs is taking medical leave, Microsoft said today it is considering layoffs. Pimco co-CEO Mohamed El-Erian U.S. will have a "messy" healing process. And reportedly, Venezuela President Hugo Chávez is going oil-broke and letting oil companies bid. CNBC heard from experts who said bank writedowns will top $1 trillion, the U.S. needs more bailouts — and a much bigger TARP fund.

More Bucks For the Banks — Govt. Can't Waste Time!

Kevin Caron of Stifel Nicolaus said he anticipates writedowns by banks will top a trillion dollars before the financial sector firms up, and until that happens, prices — both consumer prices and asset prices — are going to remain soft.

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Moody's Investors Service's John Lonski added that rising unemployment will drive up the credit-card charge-off rate, and he sees the high-yield bond default rate increasing as well. He says the government must somehow prop up spending — and do it quickly.

Government Must Spend Even More — And Buy Troubled Assets

Nobel Prize-winning economist Michael Spence believes Fed Chairman Ben Bernanke hit the right note this week when he said the TARP program must re-focus on getting endangered assets off the balance sheets, because financials will not stabilize until there is transparency. Spence said the remaining $350 billion in TARP is probably not enough to do the job.

Dimon In the Rough? JPMorgan Earnings Top Expectations

Christopher Whalen of Institutional Risk Analytics applauded Jamie Dimon's leadership of JPMorgan Chase, which posted Q4 earnings of seven cents per share (results had been expected to be flat). Since he's been at the bank, he has improved its performance and bought it a lot of time by doing so. While Citigroup has been spending 60 cents to generate a dollar of revenue, JPMorgan Chase under Dimon has dropped that to 20 cents.

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