ALL BUSINESS: Banks' credit crisis over? Not so fast

Some of Wall Street's biggest names have been proclaiming in recent weeks that the worst of the financial market turmoil is likely done. JPMorgan Chase's Jamie Dimon thinks it is "maybe 75 percent to 80 percent over," while Goldman Sachs' Lloyd Blankfein says "we're closer to the end than the beginning."

Those kind of comments helped put a positive spin on what otherwise would have been a tough earnings season for financial companies, which have tallied massive losses as mortgage and other debt woes continued to weigh on their businesses.

It's in the CEOs' best interests to steer sentiment higher. If people feel better about the state of the economy or financial markets, that will lead to more deals or stock trading and will boost bank profits.

The data don't back up their happy views, however. We're still stuck in a painful housing downturn, mortgage defaults continue to soar, and rising inflation is hurting businesses and consumers.

Credit-risk worries, which have ravaged financial markets since last summer, haven't diminished either. The gap between the interest rate on the three-month Treasury bills and the three-month London Interbank Offered Rate referred to as the closely watched "TED" spread has been widening, indicating that lenders are avoiding risk.

The credit crisis has led to more than $200 billion in write-downs taken by banks and financial firms over the last year far more than anyone had expected, given the optimism of those companies' CEOs last summer.

As the housing market contraction accelerated and subprime borrowers were increasingly defaulting on their home loans in the first part of 2007, those executives were telling us not to worry.

Last June, Bear Stearns CFO Sam Molinaro talked about how the high level of subprime mortgage defaults hadn't "spilled" into other areas of the market. Merrill Lynch CEO Stan O'Neal said the subprime crisis was "reasonably well contained."

And in July Citigroup's CEO Chuck Prince said: "When the music stops in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."