Wall Street Journal:
he Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
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The "watering down", which is bull crap - the tests were NOT watered down, was done in the interest of transparency.
If you owned Citigroup and opened up the newspaper and saw it had a 60-billion-dollar capital shortfall, you might panic and sell cheap - thinking the common shareholders might be wiped out should the government place Citigroup into receivership.
Only to find out a few days later that Citigroup raised 55 billion in brand-new TCE via the conversion of preferred stock and the sale of a business unit - all of which was known about the day the nontransparent stress-test results were issued, and stock price is soaring up.
So you would, of course, sue the crap out of the government for hiding the truth from you.
Don't buy this bull of the stress test being corrupted !!!!!!!
STRESS TEST = A LOOK AT THE BANKS BOOKS WITH NOTHING HIDDEN !!!
Of course the Banks are whinning and crying but that is to be expected.
All the Treasury wanted was that one look at all the books and that is what they got !!!!!!!
See how it changed Bank of America from lieing to stock holders !!!!
.
The stress tests were a sham.
Black is Back: Don't Trust Earnings New Accounting Rules, Stress Test is a SHAM!
http://www
Gee, am I ever surprised that this happened .... extra heavy on the sarcasm, please. The folks at the top of the economic ladder in this country are so far removed from the bulk of what makes this nation the great place it is that they probably think of us as fodder for scaring their children into obedience; "You better do what I say, Johnny, or you'll end up in the middle class where you'll actually have to pay attention to the laws and act in an ethical manner."
"The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining
I don't understand bargaining, what bargaining? This was suppose to be base on discovery and fact if there was any bargaining then the entire process was a fraud!
Why Mr. President DO we NOT REPAIR THE ENTIRE SHIP that is STILL SINKING?
We now have "FAILED Wall Street/FED Insiders" running the Obama Treasury Programs!
We should have CLEAR THINKING Brilliant Outsiders like Warren and Stiglitz developing the New Systems that build a better REAL WORLD Future for ALL AMERICANS!
The New Systems:
1. Recognize the Old Wall Street is GONE FOREVER!
2. Fight the Narrow Minded Ignorance of Wall Street
3. Prevent Wall Street Owning Congress and writing our LAWS
4. Gov. Agency accepts all Campaign Funds & Blindly Distributes them to Congress - "delinking"
5. Removes Culture that Employee Stealing of Corporate Profits and pocketing them is "GOOD"
6. Removes Philosophy that any "TRICKS&TRAPS" that work by hurting Small Investors is OK
7. Removes idea that Taxpayers are Insurance/Welfare Providers to WS when they goes BAD
8. Our Criminal Justice System is ALIVE/WELL Investigating & Prosecuting White Collar Crime
9. Regulations and Regulators are GOOD and POWERFUL - Yes Government Plays a ROLE
10. Restructure the FED to Serve equally Main Street and Wall Street
Why Mr. President DO we NOT REPAIR THE ENTIRE SHIP that is STILL SINKING?
We now have "FAILED Wall Street/FED Insiders" running the Obama Treasury Programs!
We should have CLEAR THINKING Brilliant Outsiders like Warren and Stiglitz developing the New Systems that build a better REAL WORLD Future for ALL AMERICANS!
The New Systems:
1. Recognize the Old Wall Street is GONE FOREVER!
2. Fight the Narrow Minded Ignorance of Wall Street
3. Prevent Wall Street Owning Congress and writing our LAWS
4. A Gov. Agency accepts all Campaign Funds and Blindly Distributes them to Congress - "delinking"
4. Removes the Culture that Employee Stealing of Corporate Profits and pocketing them is "GOOD"
5. Removes the philosophy that any "TRICKS&TRAPS" that work by hurting the Small Investor is OK
6. Removes the idea that Taxpayers are Insurance/Welfare Providers to Wall Street when they go BAD
7. Our Criminal Justice System is ALIVE/WELL Investigating and Prosecuting White Collar Crime
8. Regulations and Regulators are GOOD and POWERFUL - Yes Government Plays a ROLE
9. Restructure the FED to Serve equally Main Street and Wall Street
"The official unemployment rate is now 8.9% and equal to the worst case assumptions for 2009 used in the Goldilocks stress tests of the banks. The tests were not too hot and not too cold for one reason and one reason only, so that more TARP money would not be needed in the near term. There is no clearer signal that the political will is lacking in Washington to confront this crisis head on. Treasury Secretary Geithner has been left with nothing more to work with than smoke and mirrors wizardry ala the Land of Oz. So what if no big bank is going under in 2009 or 2010. The banks accounted for only a fraction of the credit granted to the world economy over the last few years. The main driver for the rest of the creation of credit came from the asset-backed securitization market that relied on AAA ratings. It remains dead as a door nail if it doesn’t carry the implied or implicit backing of the U.S. Treasury. The source of the economic crisis was never the large commercial banks. Declaring the banks alive and well has not resolved the problems in the economy. Attempts to prop up confidence are necessary and admirable. But confidence alone will not restore the loss of access to credit that is the lifeblood of our modern economy. As the banks rush to return TARP money they will have less to lend, not more."
http://www
Using imagery from the Wizard of Oz does nothing for your statement's credibility. Your paragraph posits that we need to somehow get back to the credit levels we've assumed previously. God, I hope not. Access to credit has to have some basis in reality and the past 8 years has shown us that we "bubbled" and crashed.
With the proper regulations and oversite in place, we will never go back that way; rather we will see slower and more measured growth based on true values.
To go your route is to put us back on the Yellow Brick Road.
erik
1) The unemployement rate assumption is too low. 2) But the assumption default rate was higher than what occured in the great depression with unemployent in excess of 25%. And since thats what actually determines the risk to banks... its the more important number...
2) Baby Boomer retirement may help keep the unemployment numbers down ( although more will work longer now.. except their 401Ks have gotten healthier and big if .. selling of their homes/downsizing). Many will have no choice but to retire..
3) CDOs are still being done.. just that subprime mortgages are dead... a good thing. CDOs with subprime are now referred to as legacy assets..
4) One Bank reported they were even now able to sell higher rated legacy assets at a profit this past week ( probabaly after prevoius write downs however.. they did not say.). If that trend were to continue, losses taken by banks previously on wirte downs, turn into gains.
5) 30% of our credit came from foreign interest. 30% came from private investment trust and etc...
And the big Wallstreet firms were not Banks until this past fall such as Goldmans et el) and thus not subject to tighter bank regs and they generated most of the crap via subs..
4) A huge amount of legacy loans are being refinaniced, which makes the Lgeacy loan go away. On my street one house refinanced and thus the owners did not have to sell...so its off the market ..
Regards
The big news comes out and everyone reports all the GOOD NEWS, even though many people call Bullshit.
Two days later, turns out the GOOD NEWS was a LIE.
WHERE ARE THE HEADLINES? This should be FRONT PAGE for days!
Poor people are piling back in to the stock market on the lies, and they are going to lose their shirts. The corporations lie, the banks lie, the government lies. It's up to the news media - GET OFF YOUR ASSES!
God this is depressing.
The Daily Show will cover it at least.
What is being talked about as something unusual is in fact part of any normal auditing process.
As a Public Accountant (now long retired from that) on an CPAaudit staff and later as a Director of Finanical Reporting for a Fortune 300 Company, I have been involved in many audits.
If you are audited by the IRS, it is not unusual to question their audit findings and often changes result. Hopefully on one here just sends a check to the IRS.
In audits , the auditors prepare a list of adjustments based on their findings. These adjustemnt are then discused with the company, some are corect and booked and some are not upon conversations with the company.
Companies have their internal audit staffs and in this case their oustide auditors also which far exceed the expereince and knowledge of government auditors when it coes to specific companies.
Also this was pro forma... future looking ... The GOV may say this and the bank may say thats true, but if that happens we would do this... In such a future projection/profrma situation the give and take will be much more. This was not an audit of what has already happened.
Regards
Thank you for the information.
SOLD OUT: HOW WALL STREET AND WASHINGTON BETRAYED AMERICA
March 2009
Consumer Education Organization: Essential Information
www.wallst
http://www
This is an essential read - a 231-page report that covers everything in great detail.
By not Nationalizing these banks we are being made unwilling accessories, as well as being played like chumps, to the plundering of the United States Treasury ..!
Unwilling accessorie
Unwilling .. we borrowed money we could not pay back and had negative savings...
The toxic assets are us and our loans. If you lopan some one money and they shipp... are you the bad guy...? Everyone got cash, the banks got stuck with our bad paper...
Regards
The banks created their own bad paper by first allowing liar loans, second stuffing predatory mortgages down the throats of people who qualified for better but were too ignorant of how the system worked, and lastly, by securitizing that paper as AAA derivatives (when it wasn't) at a 40 to 1 leverage ratio--betting on the come with out any reserves in hand and then going begging to the gov. when the bets went south!
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| 05/ 9/09 08:57 AM