Stress Test - What a Surprise, all the banks pass....yet need another round of bail out money

You're gonna love this one, according to the New York Times as the Treasury laboriously pours over banks books, all of the banks are passing their stress tests.

They are discovering may come as a relief to both the financial industry and the public: the banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say.

That is the good news. The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say.

Even better the Treasury is delaying the results and demanding it all be kept private (Reuters):

The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury's discussions said on Tuesday.

The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.

Let's translate. Oh sure, it's all good, everybody's fine, don't worry, be happy, hey private investors, come make some money guaranteed, don't want to upset the markets, oops can't make those results public, here's another trillion dollars, now everybody smile.

My question is did it take this long to cover the tracks or where you all playing video games, pretending to do an internal audit?

Subject Meta: 

Forum Categories: 

The "too big to fail" banks

The "too big to fail" banks grew as a result of bond-based
acquisition in the 90s, using leveraged tax-write offs. They did not organically grow their businesses. Now, they've become too big to manage...and are still being bailed because of all the good ol' Wall Street boys, i.e. Sanford Weil, Hank Greenberg, et al. The fact is, the FTC allowed all this anti-competitive consolidation (as a result of kickbacks and lobbying). It, like most of the Federal Agencies, failed to do its work because it was peopled by political hacks. It smells really bad. I'm ready for a huge clean-up...the FBI and Justice should just get out the weed wacker and go to it. Seriously.

You must have Javascript enabled to use this form.

Such a joke.

It's not surprising. After all, Geithner did say that he would do whatever is necessary to maintain our dear financial system. But do these people have any idea just how corrupt and imperial they look? Everyday, I want to take the observations of Ilargi and pass them on. He and his wife Stoneleigh are just so good at reducing our experience to the levels of absurdity it so richly deserves. Today's synopsis is, I think, a classic:

Ilargi: As the criticism of all the doomed to fail from the outset Obama financial plans reaches a first crescendo, here come the propaganda police troopers. And you still think Goebbels was devious. A lovely portrait of Ben Bernanke "revolutionizing" the Federal Reserve in the Washington Post makes me think the average IQ of the readership has tanked towards a fathomless and unfathomable bottom. Come on, Washington's happiest buy into that?

New York Magazine has a piece on the man who made Tim Geithner "telegenic". Excuse me? Larry Summers was sent out to do a speech, in which he claimed that we will recover in a few months. His terms are vague, but we can still nail him on that one (preferably by his ears) come fall.

We have entered surrealism of a size and grandeur nobody would have thought possible until recently. Average initial jobless claims were down 750 in the past 4 weeks, while continuing claims were up 146,750. Guess what made the headlines?

Bank stress test results are not published, but they are commented on by Federal Reserve regional presidents. They tell us all 19 banks tested are fine, though they need more money, though not all of them. Publish the numbers, I warn you, guys, people don't believe you anymore because you have such an honest face.

Then again, people do still trust Obama. God only knows why, but they do. If there's anything that keeps us from working to solve this crisis, that's probably it, that's the biggest reason of all, that Obama can say whatever his crew write for him, and it’s swallowed hook line sinker as some sort of new evangelism.

And everyone's looking the other way, where the Dow gains a percent or two surrounded by mass foreclosures and lay-offs. Salvador Dali would have left this theme alone; no amount of acid ever gave him visions that far removed from what he saw sober.

Me, I’ll have a stiff drink a reader sent me, mille grazie, and see what tomorrow brings. But the disconnect, I must admit, throws me off at times. I want Obama to visit the tent cities, to go see those who stand in a 3000 man long line for one job. Because that is what's real. Not Bernanke and Geithner and Summers claiming that they see recovery without having anything to show for it. Get out there and be with the people you have been elected to represent. Be a mensch or get the fuk out of here. This is no time for a political spiel, or theater, no spins or PR plays. Get down there where it matters. Or get out. You may fool a lot of people, but you can't fool them all.

Wow, mentioning Geithner, Summers, Obama and Salvador Dali in the same essay! That's just not easy to do. I was always proud of using the word "picayune" in a corporate memo years ago. I bow to the master.

You must have Javascript enabled to use this form.

Japan redux.

And then there is this report from Bloomberg. So many why's and so few answers. Not the kind of stuff that leads to confidence.

You must have Javascript enabled to use this form.

I've noticed Bloomberg reporting

generally is being much more honest than most. That's quite an editorial for them to print but it seems more and more "establishment" financial media are really calling it out.

I also noticed they have put together a lot of interviews that are excellent.

So of course they are about the last channel that goes with any cable package and instead we get CNBC, which at least in the afternoons is almost noise at this point.

You must have Javascript enabled to use this form.

I was playing video games!

Sorry...Robert, couldn't help it. :P Please forgive me.

You must have Javascript enabled to use this form.

But, Time Magazine says banking crisis is over

Here it is: More Quickly Than It Began, The Banking Crisis Is Over. I was going to do a story on this but why bother.

You must have Javascript enabled to use this form.