U.S. Concessions Help Some Banks Put Best Face on Results

Washington Post:

Some major banks managed to wrest concessions from the government in closed-door negotiations over their stress tests that helped them put the best face on their results, financial analysts, industry officials and sources said.

Citigroup, for instance, was able to apply a $50 billion internal reworking of its capital that hasn't happened yet to emerge with a need to raise just $5.5 billion of common equity, considered the most dependable type of capital.

Read the whole story: Washington Post

Comments

[2Bfair]

The entire front page of Huffpo is about the &*%$# correspondents dinner. Who cares? Could you put it in the enterainment section and cover real news up front?

[whatthel]

Only RichardCraniums would make an issue out of mustard.

[PhilipTaylor]

So I guess we know who runs the Private FED - the Big WS Private FOR-PROFIT Banks!

Profit to employees while the banks profits disappear into employee pockets and the banks can not even pass a mild Stress test!

Main Street Needs a Main Street FED so we can get $12,800,000,000,000 Credit Flowing to Main Street as Bloomberg News Reports!

It is time for Main Street Banking to be separated from the Corruption of Wall Street!

Wall Street is a HOUSE OF TRADERS who should NOT be involved in traditional Banking since it is a conflict of interests. Either they are a TRADER or a BANKER- can NOT be both!

Main Street can NOT afford another swoop down by the WS Buzzards upon its wealth!

[BurtonOerney]

You didn't read the article, did you? Relying on this website's article titles can be precarious.

[LynnW49]

"Some major banks managed to wrest concessions from the government in closed-door negotiations. . ."
I'm thinking there was no "wresting" or wrestling necessary. Unless it was the fake kind where the combatants agree beforehand, "Let's make it look like a fight."

[nobozos]

As Brad Pitt's character in 'Thelma and Louise' said":

"Well now, I've always believed that if done properly, armed robbery doesn't have to be a totally unpleasant experience".

However, as a citizen, I'm sick and tired of being robbed by the robber barons.

[knosiswar]

Ask 'I have the Clap Newman' why this happened since the Fed is an institution independent from private banks and has proven itself time after time as an institution of the common man. This doesn't make since to me Newman, how could the banks get special treatment from the FED because we all know the dictionary says they are a government agency by definition.

You shall know the tree by the fruit it bears.......Newman?

[TJCole]

Our governments entire approach is back ass-wards..!

The banks had no real leverage when this all hit the fan and in reality they still don't why did we negotiate to the degree we have with them, they're broke or would be broke if we hadn't recapitalized them..?

This was the time to re-organize and change the entire banking culture, so it serves the nation's best interest and the people, and the real economy..which is the general prosperity...!

Geithner and Bernanke of course have done nothing to really or even partially change the banking culture...

They been stealing lying cheating raising credit card rates to beyond usery , any major bad practice they are not only continuing but they are corrupting our Senate and Congress as well with the money we are giving them at 0% interest no less..they are bribing our elected representatives..!

Unless we Nationalize these major banks and change their bad practices and outright abuses if not criminality, reestablish regulations, lower interest rates on loans, to create jobs and also credit cards across the board address these foreclosures now it's reported up to 10 million none of this or these billions and even trillions is really gonna fix anything in the long run and America and Americans will never regain what was once there prosperity....general overall prosperity..!

Maybe we should start an entirely new bank and online banks with zero debts for progressives with it's own practices...

[opusprime]

Since when are capital requirements open to negotiation?

The whole system is totally corrupt. We need to tear it all down and start over. Including our Congress and Senate.

Obama is just another Keynesian debt monster. We just keep digging the hole deeper and deeper.

[ATruthBeKnown]

Who would have thought

[mdn]

Were not Citi Group and Bank of America, the banks who said the had profits last quarter. They live in a world unto themselves.

[lightningbolt]

Despite the fact that the stress test was not stressful enough, they are still asking for tweaked results? Are they TRYING to lose our confidence? Clearly the management of those banks and of the Fed is too incompetent to be running our economy. They must be fired.

[Artos]

lightningbolt,

They could care less about our confidence, it is our gullibility they desire most. So they lie to us to get more of our money. But if they aren't doing badly then why would they need more loans? This doesn't make too much sense does it. Their lies though will come back to haunt them because by pretending strength they will have to deal with the result that if and when they are really flailing about and on the verge of failure, no one will believe them. Let them rot. We should all withdraw our money and put it into local banks that are smaller but more trustworthy.

[ResistanceisFutile]

What a circle jerk.

The public will be forced to grab their ankles and their only hope is for some K-Y.

[ntmessage]

Tweak is ok given that we have made trillion dollar mistakes in the past.

[ntmessage]

Conspiracy theorists and market manipulators will have bad day today. Those betting on an incompetent government or rejoice in Americas failures will have an even worse day.

We never had such a comprehensive and transparent judgment on the banks. The adverse case used write offs that were worse than those realized during the great depression. Those that are truly at fault are beginning to be held to account.

So those hedge fund managers, fancy private equity reports, economists and academics using Marco analysis from afar without real data from all over the world have had their 15 minutes of fame. Taking advantage of a crash, high emotion and a weakened economy to drive their own money-grubbing agendas; like being short the market or trying to buy our assets at unfair prices. Selfish money managers that want to play outside of the legal box are finally hurting.

We used taxpayer dollars to save a million jobs in the auto industry that we will never see again. It is a no brainer then to use taxpayer dollars that will be paid back with dividends and interest to save an economy that a couple of billion ordinary people depend upon all over the world. This capital is not being created via accounting. It already exists in the banks themselves. Assets that already exist that will be sold to create more capital if needed.

A lesson on the value of confidence in our markets and what competency in government.

[alexandra hamilton]

"We never had such a comprehensive and transparent judgment on the banks."
Not really. The WaPo writes:
"The banks were intent on sending a message that they were strong enough to weather the economic storm and didn't need additional capital infusions from the government that could all but nationalize their franchises."

So the intent behind this exercise was not transparency and find out about the real state of the banks business, but to make them look good to reassure investors. I wonder what happens when the banks start to fail, is the government then liable to investors for given them false and misleading statements that made them feel secure? This could become expensive for the taxpayer.

[sonofsamphm1c]

First you would have to prove something was false.

Is it false that the government and private investors have entered into an agreement with Citigroup to convert 50 billion in preferred stock to common? No. Is it false that Citigroup has entered into an agreement to sell a business unit for 7 billion? No.

Accountability and transparency cuts both ways. If Citigroup had not been allowed to include those improvements in their capital, victimized investors may have sold off the Citigroup at significant losses, only to see their former shares rebound instantly once the market figured out those improvements in Citigroup's capital were imminent.

I suppose in that case they could come to you for restitution.

[anticon]

Gotta keep the common price up to unload shares to Joe public.

Raising capital through dilution rarely has a positive outcome for those purchasing the shares.

Have learned this lesson the hard way.

[ntmessage]

Having a bad day? Well WaPo is as predicted.

WaPo is wrong in the regard that the banks were calling the shots on this one and not the regulators. They were not. I would rather look to the government as opposed to hedge funds, other banks and moneygrubbers trying to short this market to find out who to believe. There was no conspiracy. Just so much misinformation preying on our fears without hard data used to con everyone. If any of these guys goes back to the gov for more money, they are history just like the GM CEO.

Those 8 trillion dollars of losses and insolvency, well they are all wrong and everyone in that camp has egg on their face. Of course, some in the media is scrambling now saying there was some kind of conspiracy (not that they were 100% WRONGO). The government DID use test cases WORSE than the great DEPRESSION. WaPo, used just a bunch of rhetoric and straw cases from hedge fund supported academics and socialists.

The intent behind these tests was to have the government find out who is lying and who is not and tell the people. Clearly, those trying to justify nationalization via insolvency or other people on Wall Street and overseas shorting the stocks all had a vest interest to keep the negative rhetoric and fear game going.

The taxpayer now looks to make money on the banks (not GM, Chrysler, Fannie, Freddie or AIG, all non banks).

[Artos]

ntmessage,,

But, but .........But Bernanke said things were taking a turn for the better and that we should be seeing an end to this recession by years end. I, I ........, I.. don't understand. What's happening, what is the truth, I'mm mm falllllllllliiiiiiiiiiiing and I can't get up.

[ntmessage]

LOL. Anyhow the market leads the economy and the economy leads employment, sorry to say.

[superbowl3]

How can Obama get mad at the GOP for being cautious about his pick when he did the same thing to Bush? How can he ask for an up and down vote for his nominee when he did it to Bush? How can Obama tell the republicans not to filibuster his pick when once again he did it to Bush? Don't be a hypocrite.

[cmugs]

thats right. he singularly. all by his lonesome. *scoff*