SSDD.
CR - you will have generations that will flock to your site because no administration or govt agency will ever want to deal with this problem head on. It will be the gift that keeps on giving for a long, long time.
SSDD.
CR - you will have generations that will flock to your site because no administration or govt agency will ever want to deal with this problem head on. It will be the gift that keeps on giving for a long, long time.
Perhaps they are still trying to figure out how to keep the Wizard of Oz employed. (Pay no attention to Bernanke behind the curtain!)
wouldn't failure of a stress test be a material event? wouldn't it be required that if a bank, having failed the stress test, would release that info to investors? is this the Fed's way of providing banks with cover?
the problem with US equities isn't that they are a casino, it is that they are a rigged casino, and the gaming commission won't tell us which games are rigged
Even after giving them trillions?
the bears scurrying on top of each other to short this news should create a human pyramid to spx 900 by tuesday morning
Someone, if you're out there, and you have the stress test results. Please submit them anonymously at http://wikileaks.org we would appreciate it.
I'm going to go ahead and assume they all failed.
"If you allow banks to talk about it, people are just going to assume that the ones that don't comment about it failed," said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
"Someone, if you're out there, and you have the stress test results."
not the best idea, violation of markets integrity unless the results are official and public domain (made known to all.)
If you ever wanted an example of herd mentality, you saw it today when Wells Fargo (which will be the largest bank in the world when this is all said and done) released good results. Folks then decided that BoA and Citi were still solvent, hence they bought C and BAC
Strong banks like WF and JPM will survive and become stronger. Weak banks like Citi and BoA will see equity go to zero. The market has already decided they are dead, that is why their stock prices are below $10.00. No one bought out C even when the stock price was at $1.02, the market has already decided it is dead. No need for a stress test, we already know Citi didn't pass.
"violation of markets integrity"
jesus I hope that's sarcasm
"Someone, if you're out there, and you have the stress test results. Please submit them anonymously at "
Man, the shitstorm that would cause. Isn't Wikileaks crowd already being abused by the German gov?
I suspect, some smarties are going to post fake but convincing test via some proxy in the 3rd world, to some financial site and make big bank on the market moves. I mean, how can the gov. prove it false? Release the actual results? This situation is ripe for abuse.
""violation of markets integrity"
jesus I hope that's sarcasm"
in this particular case, it's closer to a fact. For someone who doesn't realize that you are what your reputation is, it might be a sarcasm.
"This situation is ripe for abuse. "
Ad infinitum, same as it ever was.
Slightly--really only slightly--off-topic, but has CR finally relented yet and announced any agreement that we are heading for a depression? I personally think we are going to go way past a "depression" and we'll have to coin a new term--or maybe recycle an old one , i.e. the "dark ages." But I'm waiting for the day that CR basically concedes the depression point.
"For someone who doesn't realize that you are what your reputation is"
If that were true, Jamie Dimon and Ken Lewis would be next door neighbors in very small rooms Marion. They aren't. Yet.
fella, to concede the obvious would be pointless.
\\\\\\\\\\\\\\\\\\\\\\\\\\\\||||||||||||||||||||||||||//////////////////////////
In Marion, of course. sorry, the 8 buck Syrah at trader joe's is actually quite good.
Back on topic...
http://wikileaks.org/wiki/JP_Morgan_Private_Bank_insider_trading_how-to
I'm not suprised by the new admins approach....If I recall correctly a certain fabled emperor had transparent new clothing and people were somewhat upset when they realized it.
I didn't know the Fed had the authority to suspend SEC regulations regarding the timely reporting of materially significant events.
The Fed doesn't need authority to lie to you.
The Fed doesn't need authority to lie to you.
Perhaps not but they do need my complicity to get away with it.
Fox News was reporting that everybody passed the stress test on their "happy hour" program.
regarding the timely reporting of materially significant events.
Aha! It's working. They've planted the idea that the "stress test" is meaningful in some way, instead of being strictly a diversionary tactic. It's like putting armed guards around an empty box.
True. How do you prevent them from getting away with it?
Wall Street on the Tundra | vanityfair.com
http://bit.ly/18JixH
Iceland's de facto bankruptcy-its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance-resulted from a stunning collective madness."
Iceland instantly became the only nation on earth that Americans could point to and say, "Well, at least we didn't do that."
The debt-drowned United States has reached just 350 percent.
""violation of markets integrity"
kind of like when the guy talked to Woodward and Bernstein in the parking garages and violated executive privilege. Whatever...does the Treasury have one of those rooms with the generated white noise to prevent eavesdropping? I doubt it.
I agree montas... the US market is looking more like a fixed casino all the time. Maybe someone should dig up that Greenspan quote about how the US is special because of all the regulation and transparency designed to protect the investor. HA! How times have changed.
BTW, by keeping the results secret all they are doing is giving more power to the rumors and the people who manupluate the markets. (ala Jim Cramer's comments).
I swear I'm gonna make a weekly YouTube version of a parody to Cramer's show... except I'm just gonna be mr. sell! sell! sell!
You'd think Comedy Central would've done this already... if they do it similar to the Daily Show could make the under 30 (40?) crowd a bit smarter regarding investment BS...
So I guess that means THEY know if they passed or not? Were they giving themselves the test?
This gives them an extra few weeks for them and their friends to trade on the info I suppose... or issue new shares to raise money.
By the way, anyone remember what happened to that "increased financial regulation" we were promised? I distinctly remember being told that we were going to be given detailed plans, yet somehow that all seems to have slipped away from our collective attention... hey everybody, look over here, the stock market's up!
Same as it ever was.
I thought the strees tests were all a charade - if the banks are failing even charades, we are doomed, doomed, I tells ya!
Bank examiner: Let me see your books
Banker: We don't have any books - we are so poor we haven't eaten in weeks, so we ate our books
"by keeping the results secret all they are doing is giving more power to the rumors "
--------------------
Only if the banks are solvent.
If they're insolvent, the rumors are right.
And we already know they're insolvent, yes?
With borrwoing costs of 0.5 % and lending incom om 5% most banks are making big money today.
Imagine a bank with $1.000 bn in loans recieving intrest of $50 bn but only having to pay $5 bn to loan the money.
The profit on that is $45 bn alone.
And then comes extra income from insurance, stock trades, cards, etc
Such a bank could easily make $60 bn in profit this year.
In the meanwhile entire CitiGroup is valued at $16 bn over the stock market.
Keep the results quiet..???? Are they even doing tests??? BIG DIVERSIONARY TACTIC
Oh by the way..BIGGG move in Financial stocks and overall sector..plan seems to be working..GOOOOD JOB
to TIMMY and the CREW
It's amusing that the article mentions Citi - I doubt Citi wants the results released!
Unless Citi got a clean bill of health from the Fed.
As we can see clearly now, the bank's staying power does not depend on macroeconomic conditions or amount of toxic assets they have. It is their influence in Washington that matters - and that test the banks have passed with flying colors!
What ever happened to transparency?
The state has decided, you can invest in the truth, but you can't handle it.
How ludicrous, that the insolvency of some bankers has now become a state secret of the highest order.
What a sad day for this Republic, in so many ways.
MrM:
As we can see clearly now, the bank's staying power does not depend on macroeconomic conditions or amount of toxic assets they have. It is their influence in Washington that matters - and that test the banks have passed with flying colors!
Behold the tarponomic miracle.
Anonymous53:
Such a bank could easily make $60 bn in profit this year.
In the meanwhile entire CitiGroup is valued at $16 bn over the stock market.
So how'd that work for Japanese banks?
Byzantine_Ruins says:
Sunday, October 12, 2008, 6:33:05 PM
"There we go everyone, that's a wrap. We'll just guarantee everything. Crisis solved.
Scene: An anonymous central banker has his hands in two puppets. He is stimulating interbank lending. One puppet passes a billion dollars to the other. Then the second puppet passes it back to the first.
Won't you come play the lending game with him, I mean, them? He'd really, really like your foreign exchange reserves.
Do you see what I see?
Well, the NY Times said that no one would fail the stress test because Uncle Sugar would back the weak banks with taxpayer scrilla. See:
http://www.nytimes.com/2009/04/09/business/09bank.html?_r=2
So anyway, its like "Everybody Gets a Trophy Day" down at the special school.
I thought the banks were doing better - why the rally yesterday? Maybe Wall St. isn't so smart???
Russian solution:
"Sasha, give them some books to look at."
Pavel Chichikov
You do realize the article also said this:
"Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government's plan to release the results in an orderly fashion later this month. "
Not that I trust the government has my best interest at heart, but it's not like they said they're not releasing them period.
Who actually believes in the validity of these stress tests?
They can make whoever they want pass or fail... this could be a way of nationalizing the system without having the general population noticing.
Dawg: Here is the relevant part of the Exchange Act
Section 13(b)(3)(A) of the Securities Exchange Act of 1934
"With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance."
http://www.law.uc.edu/CCL/34Act/sec13.html
NorkaWest
sudonim (member) wrote on Fri, 04/10/2009 - 4:48am.
You do realize the article also said this:
"Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government's plan to release the results in an orderly fashion later this month. "
Not that I trust the government has my best interest at heart, but it's not like they said they're not releasing them period.
What function does this delay serve other than allowing insiders to liquidate out before the public, and providing a window for a systemic crisis as rumors and innuendo fly? If you arrive at the end of an endeavor like this without a plan for what comes next, the problem is not the problem, the problem is the person managing the problem.
Who actually believes in the validity of these stress tests?
They can make whoever they want pass or fail... this could be a way of nationalizing the system without having the general population noticing.
----
The other issue is time and assumptions. I have trouble believing they can stress test in so little time and actually stress test using adequate assumptions.
Just a few months ago, the world economy was decoupling! LOL I doubt they are testing for the right scenarios.
Smoke and mirrors, that's all it is!
I wonder if they will get sued if the results are bad for failing to disclose material adverse information under the SEC laws
If the stress test had been positive, MSM would have been called in and Headlines would have been Recession Over, What a Scare,
Knickers in a twist over nothing, they just don't want banks crowing during earnings season. Citi still likely failed and is being broken up, BAC is fine except for merril(which the government is de facto backstopping.)
"Depression" was Hoover's euphemism for "Panic." This is simply The Panic of '08. Replay of The Panic of '73 (as in 1873) almost word-for-word. Official term will be The Great Recession, which is a euphemism for the euphemism for Panic. So the next time around there will need to be a euphemism for Recession, and so on ...
http://www.bloomberg.com/apps/news?pid=20601109&sid=aFTPC.EzvUsA&refer=home
'Lehman Shock' Fuels New Wave of Homeless in Osaka (Update1)
By Stuart Biggs and Masatsugu Horie
April 9 (Bloomberg) -- Within two months of losing his job packing shelves at a cold-storage company in Osaka, Toshiyuki Miki says, he was homeless. "Lehman Shock" turned his life upside down, he says.
Lacking the 60,000 yen ($600) a month he needs to pay rent, Miki, 40, sleeps in cardboard boxes under the elevated Hanshin expressway in Umeda, Osaka's central business district. It's his home as the global recession triggered by the implosion of Wall Street banks batters Japan. About 460,000 people have lost their jobs since the Sept. 15 collapse of Lehman Brothers Holdings Inc., according to government data.
"I never realized it would affect me in this way," said Miki, who picked up the Japanese phrase "Lehman Shokku" from the pages of discarded newspapers. "Before, I could always find some kind of job, but now there's nothing."
Miki's loss of housing shows how Japan's 2.95 million unemployed people threaten to fuel a rise in homelessness. Prime Minister Taro Aso may unveil a 15.4 trillion yen stimulus package tomorrow, according to a document obtained by Bloomberg News. Finance Minister Kaoru Yosano said April 6 the package will include a new social safety net for non-regular workers.
Yosano didn't specify what help would be given to the lower-paid temporary or part-time workers. They accounted for 34.5 percent of Japan's 55.3 million employed in September 2008 compared with 24 percent in 1999, official data show.
'Crisis Situation'
Japan's jobless rate will soar to a record of 5.7 percent by the end of March 2010 after reaching a three-year high of 4.4 percent in February, according to a Bloomberg survey of 11 economists. That's the highest since 1953 when records began. Companies from Toyota Motor Corp. to Sony Corp. are firing thousands of workers and reducing output as Japan's exports plunged a record 49.4 percent in February.
"We're seeing a crisis situation here," said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. "The spike in unemployment is much faster, and younger people have much less of a buffer."
Many are temporary workers like Miki who find themselves in a downward spiral with little savings and an inadequate welfare system to fall back on, said Michihiko Okino, secretary-general of a nonprofit group that manages a homeless shelter in Osaka.
Across Japan, 77 percent of unemployed people don't receive benefits, according to an International Labor Organization report released March 24. That compares with 57 percent in the U.S. and 13 percent in Germany.
People wondered what the effect of the temporary worker on the economy will be? Here's your sneak preview.
the problem with US equities isn't that they are a casino, it is that they are a rigged casino, and the gaming commission won't tell us which games are rigged
Yep, the game is rigged.
More precisely over the past few decades, attempts to "push" inflation into the economy to "make it better" have created distortions in the time value and distribution of paper money that opens up a gap between money and real wealth that allows the financial industry to plunder all the wealth in the country.
They're just being rational, if immoral. It should be assumed that the would do this if given the means.
The question is why inflationary and monetary policies have been employed in such a manner to give them the means to do this.
What ever happened to transparency?
Haha... fiat is the ultimate obsfucation of finance.
Transparency died then.
The only result of the stress test is more money to banks but at inflated stock prices. Got to push Citi above to $4 so that tax payers can buy the stock at $10. We can at the same time pat our backs because the first investment is in the money.
FIll my investor confidence brim to the rim!
This sidestepping festival makes me wonder whether same "stress" test being applied across the board, whether the results are being cooked as they go, and what they are ultimately are going to disclose about how they conduced each test.
The question is why inflationary and monetary policies have been employed in such a manner to give them the means to do this
--------------------------------
Why did the chicken cross the road? Because it could.
The economy is a multivariate equation yet every fundamental theory focuses on the smallest number of variables possible. They tinker with one or 2 variables, distorting other parts of the economy until the elastic will not stretch anymore! Then it's time to let go of the model and change for a new theory.
For the last 20 years, it's all been about lowering the rates. That worked great for a while but now the elastic is stretched to the max in some parts, so it's time to focus on another variable for a couple of decades!
It's not a conspiracy, it's just laziness, going for the low hanging fruit.
CR,
What is going on here? As Sudonim notes, the article also stated,
"Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government's plan to release the results in an orderly fashion later this month. "
Why was this relevant part omitted from the excerpt of your post, fueling the feeding frenzy of comments?
Redhouse
OT Climate change changing
I think that even with the fed/govt pumping the financials, the broad market will tank soon enough. Costco and walmart are a better read on the economy to me, and they sat out of the rally yesterday.
Redhouse wrote on Fri, 04/10/2009 - 5:27am.
CR,
What is going on here?
Lots of government memesters are using sock puppets to try to run a jawbone op.
sniff sniff.
Smells like Babylon in here.
does result matters??
I think those banks who fail stress test will be rewarded for failing??from hard earned tax payers money--
Taxpayers should go to a Tea Party and show they failed their stress test! Tell everyone, no hiding any longer.
...What ever happened to transparency?...
~~~~~~~~~~~~~~~~~~
Ha, what ever happened to America?
I guess once you lie in bed with the devil, there is no way back ! Bon voyage !
I guess once you lie in bed with the devil, there is no way back ! Bon voyage !
Coming from a German on Passover I find that amusing
http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff
The first rule of Stress Test is you don't talk about Stress Test.
The second rule of Stress Test is you don't talk about Stress Test.
This whole business with the banks has turned into Obama's Katrina.
Wells announcing 'record profits' has got to be the most boneheaded public statement by any exec in a long time. Now, if Obama's advisors tell the banks to cover up (which they have apparently done) at the same time that the layoffs start to swell - which they are also doing - then this administration will have completely detached itself from the public. Maybe the Repubs could afford to do that, but the Dems cannot.
And we aren't even into painful parts of this depression yet. After the corporate layoffs and BKs come municipal and state defaults and then major pension plan failures. When that happens Larry and Tim will be smoking big cigars with the bankers and having a fine, profitable time. Not pretty.
Aside from the victims of the government's coordinated short squeeze campaign, who is stupid enough to buy bank stocks in between now and the announcement of the results? You are taking a chance at being diluted, again. Why wouldn't this just freeze the trading of the banks until the results are announced? And what is the chance of a bank who reports "earnings" failing the stress test? But that is probably a dumb question because Bernanke already said all banks will pass.
Everybody loves the conspiracy theory. This is simply prudent advice during earning season. There's no public policy "good" to be derived by having the market gyrate because of rumors or innuendo.
I love this site, but you're off base on this one...
"The state has decided, you can invest in the truth, but you can't handle it."
True, Byz. We are ordered to pay but we are not allowed to see the bill. Is that the America you grew up in? Well, it is the one your kids will live in.
Also, I think Obama has a meeting with Bair, Bernanke, Geithner, and maybe Summers today at the White House. I wonder what our new decider will decide for us this weekend.
@ Littlest Mandarin:
Interesting that the Japanese refer to the Current Unpleasantness as the "Lehman Shock" (very pronounceable in Nihongo) and use September 15, 2008, as the start date. I wonder what other countries call it? (Werner in 3...2...1...)
gdkeith,
Moron. You say, "There's no public policy "good" to be derived by having the market gyrate because of rumors or innuendo". Not releasing the results will cause exactly this for the next couple weeks. The government is just extending the opportunity for the public to invest in insolvent institutions.
I think someone here mentioned before that the results from the banks regulator (FED) don't need to be released under SEC rules as a material event.
I do think that there will be quite a few shenanigans (love that word) over the next couple of weeks - the potential for rumor mongers to "play" with the market using this is huge.
"There's no public policy "good" to be derived by having the market gyrate because of rumors or innuendo. "
Who the fuck wants rumors or innuendo?
We want immediate results and criteria for obtaining them. No need to wait to publish, that's when rumormongers can operate.
Three can keep a secret if two are dead.
Is it possible C failed the first time around?
What ever happen to Reg FD (Full Disclosure)? Isn't it against the law to withhold material information from investors???
All i can say is: WHOOCOODANODE?????
.................
gdkeith (member) wrote on Fri, 04/10/2009 - 6:03am.
There's no public policy "good" to be derived by having the market gyrate because of rumors or innuendo.
Why not replace rumor and innuendo with the truth? What rumor is there going to be for releasing authentic, accurate data? The only thing this poilcy is going to spawn is insiders trading on embargoed data and a lack of information that gives rumors fertile soil -- and anybody who has managed this kind of stuff could tell you that.
Everybody loves the conspiracy theory. This is simply prudent advice during earning season. There's no public policy "good" to be derived by having the market gyrate because of rumors or innuendo.~gdkeith
........................
Thain is that you again?
......................................
Depression" was Hoover's euphemism for "Panic." This is simply The Panic of '08. Replay of The Panic of '73 (as in 1873) almost word-for-word. Official term will be The Great Recession, which is a euphemism for the euphemism for Panic. So the next time around there will need to be a euphemism for Recession, and so on ...
I vote for "Frown". It's not quite as unhappy as depression, but it still denotes something unpleasant.
The Great Frown of 2008. I like it!
Maybe Someone has a perverted sense of humor ?.The "Policies" of the last few months reek either of desperation and bad whiskey (my choice) or Terry Pratchett is secretly in charge and he got ahold of some bad acid.If Faith is a belief in things unseen,the belief part is lacking...
Tom Stone
Why did the chicken cross the road? Because it could.
The economy is a multivariate equation yet every fundamental theory focuses on the smallest number of variables possible. They tinker with one or 2 variables, distorting other parts of the economy until the elastic will not stretch anymore! Then it's time to let go of the model and change for a new theory.
One thing I notice when interviewing people who just recently graduate from college is that they tend to think in terms of precise solutions and "answers" to problems.
I'll say things like "working in a customer's environment that you have little control over to create a solution they want is hard".
And frequently I've gotten questions from recent graduates (including PhDs) like "Oh, so what's the key to handling a situation like that?"
There is no "key" in most cases (unless you have a monopoly or are getting overpaid). In the real world theories are tools, not magic solutions. You combine them with a lot of effort and creative thinking and you maybe get somewhere. There's an answer to general problems in the real world in the same way there's an answer to fighting off a pack of wolves with your bare hands - it's precisely a problem because you didn't know you were going to be in that situation and you have a butter knife instead of hand gun or a backpack full of steaks. Problems that you can foresee generally aren't problems.
This is very different from the academic environment where the theories and the answers they provide are generally the goal. In learning to understand tools there are concrete goals and answers. Things become very different in the real world when you have to apply them to real world problems.
Unfortunately I see this classroom mentality in economics today: "Just maximize the output function via the number x which represents government spending!"
Sounds good on paper. I think the economists who are advocating such ideas are finding out that "maximizing output functions" in practice involves using your bare hands to get the steaks back from those hungry wolves after you realize you need them to feed your family.
After reading that headline, I caught myself saying "this is the type of thing that makes you lose faith in our gov't and markets" but I realized I had already totally lost it about a year and 1/2 ago. And to think I used to buy into the whole apple pie and mom thing, not because I really believed it, but simply because I felt guilty for not being patriotic enough.
The things they've done now make me feel like it's us v. them.
My bank is an honor student The Federal Reserve.
"Coming from a German on Passover I find that amusing "
Nova,
+6 million.
Welcome to the US of Woebegone, where all the banks are solvent and all the kids are born to an above average debt load.
Banker's holiday today! Obama meeting with his economic advisors.
Arbitrage triage means that in lieu of lying to the public, you just tell them that the dog ate the report-sorry.
Smoke and mirrors. That is what it is.
Well if you have not figured it out yet, we the people are at war with the banking ogliarchs. It was clear when the first TARP passed with over 90% of the population against it. Everyone should really make an effort to attend theTax Day Tea Party. It doesn't matter if you are republican, democrat, libertarian or alien, this might be one of you last chances to protest legally.
http://taxdayteaparty.com/
Why is the Chicago Mercantile Exchange reporting no trades with a date of 4/13/2009?
The URL for gold: http://www.nymex.com/gol_fut_cso.aspx
copper: http://www.nymex.com/sil_fut_cso.aspx
E-mini S & P 500 : http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500.html
"It's amusing that the article mentions Citi - I doubt Citi wants the results released! "
GS wanted to say "we passed" and Citi didn't want to say "we didn't". hence, both are mentioned. the real question is whether BAC passed.
"Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: if the examiners determine that a bank needs "exceptional assistance," the government, that is, taxpayers, will provide it.
But the tests, which are expected to be completed by the end of this month, are being conducted out of public view. Federal law prohibits the unauthorized disclosure of the results of any bank examination, including the stress tests. "
Is the GS stock offer trial balloon new...as in today? Someone here I thoughtwas chatting about it recently.
Guess the bank examiners picked s bad week to stop sniffing solvents?
Funny thing about yesterday: BofA's stock gained more, percentage wise, than Wells' stock.
You folks who think the "truth" is out there...and will set us free, if only it could be made avalable to the hoi polloi...are a hoot.
"...Extending the opportunity for the public to invest in insolvent institutions." "....insiders trading on embargoed information."
Thanks for a good laugh. I should have known that responding to a 'comments' section of a blog would bring out the tin foil hat croud.
No delayed quotes from CME for gold, silver, and mini S&P 500 futures:
Dates listed as 4/13/2009. Is this a glitch by their WWW intern or a halt in trading?
http://www.nymex.com/gol_fut_cso.aspx
http://www.nymex.com/sil_fut_cso.aspx
http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500.html
The only financial truth out there is one that most people can't handle, and has been used as money for thousands of years.
Everything else is just degrees of slippery slope.
You really gotta admire the audacity of it all.
Look, the stress test ploy was exactly that- a ploy. Confidence is the name of the game, and the stress tests were designed to build confidence in the system. There was never a chance that any bank would fail these "tests". The results were known before the test was even designed.
The government embargoed these results because it wants to plan a big release party at the end of the month. It gives the ploy the maximum impact.
Tarpophobes !
I should have known that responding to a 'comments' section of a blog would bring out the tin foil hat croud.
Yeah, the idea that a Wall Street insider would trade on embargoed information, ludicrous on the face.
Not like the ability of IB persons to trade on insider info was used as a tout for the London financial center just before the crash or anything.
No way. Those guys, they're models of integrity.
I've decided that our society can only think a week in advance and a week behind at any given time.
just-in-time-thinking
Just friking sharpshoot the pirates for chrisakes. They're in an open boat.
How about this stress test?
Pirates of the carry banking have done an amazing amount of damage, Jolly Rogers one and all.
Arbitrage Macht Frei wrote on Fri, 04/10/2009 - 7:19am.
I've decided that our society can only think a week in advance and a week behind at any given time.
just-in-time-thinking
Natural response to the novelty and density of information flows that've emerged since the end of WW2.
This failure, and the associated mass-casualty events, will be one of the spurs to developing more open and resilient management techniques and paradigms.
Brother, can you spare a paradigm?
NorkaWest,
Thank you for the relevant passage of SEC law. I guess that means the Board of Governors is an agency that can order a national security suspension of SEC regulations. I anxiously await their written order that the financial health of 19 banks constitutes a threat to national security.
My father was in the stock biz for almost 1/2 a century, and he was an honest man that had no problem with turning in those committing fraudulent actions to the SEC, back in the days when it had teeth and was a force to be reckoned with...
No it's just a farce to be reckoned with~
I spent 5 whole minutes writing, and then discovered that since I was at a different computer I had to log in and had forgotten my password.
So this is me, and I haven't stolen my own name.
And my comment disappeared.
Anyway. The Fremont Massachusetts Mortgage Massacre according to that source of wisdom, the AARP magazine, sez that was was decided was that the purported abusive mtges--with soaring rates/payments/huge prepayment penalties had to be proven non abusive before foreclosure could proceed. Attys employment Act!!
A secret known to that many people won't stay secret. Hacker challenge!! Go, hackers, go.
These profits--are they gonna be enough to offset the mtg losses? I doubt it. I concluded we were in for it a year and a half ago.
Arbitrage Macht Frei wrote on Fri, 04/10/2009 - 7:30am.
Brother, can you spare a paradigm?
I can!
Mission-oriented orders, aka "auftragstaktik", combined with a complete yet essentially open-structure book of doctrinal responses to common situations. The US fails by not having the doctrine book. The Russians failed by only having the doctrine book.
Iron-clad expectation of leadership from the front / trenches. Destruction of the boundary between operational and administrative / executive persons as part of the organizational emphasis on mission-specific configuration. Outside of a military context, you want a "flat" "broad" organizational pyramid where leadership figures are the first contact with a challenge / client, not the last to know.
The Germans were and probably remain the best operational level fighters in the history of man because of this combination. Great for managing information flow because you can delegate missions instead of tasks so detailed reports of something other than success or failure can be squelched.
People don't follow it these days 'cause they are suckered in by the entrancement of overcontrol and because it requires organizational development that's incompatible with the mass executions and shrimp-net hires of a quarterly business orientation.
Question of the day...
What if there had been computers back in 1929-33?
Since nobody has mentioned squirrelz in a while, I will mention that I watched a very scrawny squirrel take an almost ripe peach off my tree and bounce away with it.
How can the banks fail a stress test when they can mark all their assets to fantasy? The Fed, Treasury, and banks have a medium-term strategy to talk up the markets.
Laws are ignored for the good of the people, Right? Nothing different here, just like before.
Oh you silly people, don't you know the Federal Reserve is OMNIPOTENT!
Give me the power to print the money, and charge interest on it. I'll give every penny of interest I make back to the government that gives me the power to print it, making it look like I'm on the up and up.
In the background I'll choose all your leaders and have them pass all the laws that work in my favor and I couldn't give a shit what happens to the people that gave me that power.
--------------------------------------------------------------------------
Learn the 7TH Amendment maggot!
Red Beckman - Fully Informed Jury
http://video.google.com/videoplay?docid=7385583011526915030&hl=en
Lil' Mandarin,
I was in Calgary about 5 years ago, and they have a nice military museum there, and in Canada, the Dieppe Raid was a monumental clusterfark, lots of of Canadian soldiers killed, taken prisoner, with nothing to show for it.
They had the various weaponry on display used by both sides, and after seeing what the nazis had compared to the allies, it was obvious the British had hardly planned for war, just-in-time-thinking.
Compare a sleek killing machine like the Schmeiser machine gun to the British Sten gun, and it was like night and day. The Sten gun looked like something a junior high shop student put together.
Since the stress tests are completed, but will not de disclosed, we must look for the results in the loan charge-offs and provisions for loan losses.
The publicly held banks always have maintained they do not need to reveal the results of, or comment on, or make SEC filings for regulatory examinations.
But they DO have to adequately reserve for loan losses and charge off non-performing loans - those numbers will be the 1Q tells.
Wells Fargo will look pretty stupid, along with all the morons who have gone long the stock in the last few weeks, if they now report results inconsistent with its pre-announcement Thursday, based on new, larger write-offs and provisions.
They had the various weaponry on display used by both sides, and after seeing what the nazis had compared to the allies, it was obvious the British had hardly planned for war, just-in-time-thinking.
But the reality is that the Germans had inferior weapons for the majority of the war, including especially at the beginning. They just had awesome industrial designers.
Compare a sleek killing machine like the Schmeiser machine gun to the British Sten gun, and it was like night and day. The Sten gun looked like something a junior high shop student put together.
FWIW, the Germans sucked at obtainment of war material. The Reich was just like W-era America -- the people in charge had no connection to reality and mostly everything involved cronies. The MP-40 is probably one of their best efforts, along with some other good light weapons like the S-mine, Panzerfaust and the MG-34/42.
On the other hand, they never got a good self-loading rifle or carbine in service until it didn't matter. Their AFVs and planes are gigantic wastes of man hours at every step of mfg and maintenance.
Germany only made 7000 Pz-IVs over the entire war. for a tank that was not particularly superior to the Sherman Short 75 that's disgraceful. The story of German vehicle mounted anti-tank weapons up until Pz-IV Ausf. F2 is like a saga of organizational failure going hand in hand with industrial design.
Don't confuse the fact that the Germans were awesome operational fighters with the idea that they were awesome. They had many many weaknesses and lost the war for a variety of very good reasons. They were crokked as sin, hasd no plan other than conquer the world, and made everything with loving old-world craftsmanship until it was way too late to matter for the war effort.
NYTimes has headline to the effect - banks are holding up under stress test but still need help
What? This is just crazy. I can't stand it anymore. I'm pretty sure the "good" news is directly related to the mark to whatever you want rule.
No. 1: They got the stress test results back, and now they are furiously pumping the banks as needed before the results are leaked.
No. 2: Yo teabaggers. The tea party protests are an astroturf scheme being run by big money repugs (and not a very successful scheme at that). Do you really think you'll beat the oligarchs by joining their front program?
This is indeed change and yes we can cover up accounting fraud! Way to go Obama, aka Wall Street's Sweetheart. This action by Obama's crooks goes hand in hand with the non-disclosure policy for TARP and although I'm just another stupid bastard, this seems, on the surface, unconstitutional. Treasury has already placed itself into an active role for commerce, which it has no right to do, and now that they are usurping more and more power from congress, this demand to hide the truth from the people is one step closer to communism!
I have nothing more to add, except:
"Do you really think you'll beat the oligarchs by joining their front program?"
What are you afraid of? Maybe we will beat them.
pril 9, 2009
Banks Holding Up in Tests, but May Still Need Aid
By ERIC DASH
For the last eight weeks, nearly 200 federal examiners have labored inside some of the nation's biggest banks to determine how those institutions would hold up if the recession deepened.
What 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.
The federal "stress tests" that the examiners are administering are the subject of fierce debate within the banking industry.
Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: if the examiners determine that a bank needs "exceptional assistance," the government, that is, taxpayers, will provide it.
But the tests, which are expected to be completed by the end of this month, are being conducted out of public view. Federal law prohibits the unauthorized disclosure of the results of any bank examination, including the stress tests. Some investors wonder if the new tests are rigorous enough, given the potential problems lurking inside the banking industry.
Regulators recognize that for the tests to be credible, not all of the banks can be winners. And it is becoming increasingly clear, industry insiders say, that the government will use its findings to press certain banks to sell troubled assets. The hope is that by cleansing their balance sheets, banks will be able to lure private capital, stabilizing the entire industry.
In some cases, however, the investments of existing shareholders could be severely diluted by large sales of new stock.
Some of the banks could also face more stringent restrictions on employee compensation or be ordered to change their boards or management. In extreme instances, the government could wind up taking larger, perhaps even controlling, stakes.
The state of the industry will come into sharper focus next week, when big banks like Citigroup and JPMorgan Chase start reporting first-quarter results. Many analysts predict the reports will show banks are on the mend, with help from low interest rates, fat lending margins, dwindling competition and profits from trading in the financial markets in January and February. In the last six weeks, financial shares have soared on hopes that the worst for the industry is over.
But some analysts say investors' hopes are misplaced. With the recession, banks are likely to record further large losses on credit cards, corporate loans and real estate.
"Nothing has changed with the fundamentals," said Meredith A. Whitney, a prominent banking analyst who has been bearish on most financial institutions.
The stress tests are playing a pivotal role in the Obama administration's sweeping plan to shore up the financial industry. Forcing many banks to raise capital might undermine the still-fragile confidence in the industry. But if only a few banks raise more money, the test might lose credibility with investors.
"Clearly there is a desire to put a seal of good bookkeeping on these banks," said Lou Crandall, the chief economist at Wrightson ICAP. "Whether they will use this to select a couple of sacrificial lambs is unclear. It's a big uncertainty hanging over the system right now."
The tests, led by the Federal Reserve, rely on a series of computer-generated "what-if" projections in the event the economy deteriorates. Those include unemployment rising to 10.3 percent by next year, home prices falling an additional 22 percent this year, and the economy contracting by 3.3 percent this year and staying flat in 2010.
Top regulators say the effort could signal a new approach to supervising the risks that banks take. While federal regulators routinely monitor the financial condition of banks, one goal of the tests is to devise a common set of standards for judging losses across all 19 institutions. Examiners are also considering instruments that are not carried on banks' balance sheets. They long escaped tough scrutiny.
As part of the tests, the banks analyzed each category of loans they held and compared their results with the "high" and "low" range of government loss estimates. If a bank expected fewer losses than the government, the regulators asked the institution to explain why.
The banks were also asked to project their earnings over the next two years to give the regulators a better sense of how much capital they would have to absorb the coming losses.
Several people involved in the process say there is a wide range of results among the institutions. Those that fall short will have six months to raise capital from private investors; if they are unable to do so, the Treasury Department has said taxpayer money will be available.
Some federal and industry officials say regulators may use the results to prod reluctant banks to sell assets under that program.
Michael Poulos, a director at Oliver Wyman, the consulting firm, said many big investors were burned after investing in financial companies last year and are averse to doing so again. The stress test findings, he said, could "make private capital more eager to come in because they will get a view of the bottom."
At a recent breakfast with a dozen or so corporate and banking executives in New York, Treasury Secretary Timothy F. Geithner warned he would take a tough stance. Many banks, he suggested, believe the investments and loans on their books are worth far more than they really are, according to a person who attended the meeting.
Mr. Geithner said that was unacceptable. The banks, he said, will have to sell these assets at prices investors are willing to pay, and so must be prepared to take further write-downs.
Lobbyi$t Ben Dover wrote on Fri, 04/10/2009 - 8:55am.
"Do you really think you'll beat the oligarchs by joining their front program?"
What are you afraid of? Maybe we will beat them.
Ha. Ah ha ha! HA HA HA HA HAHAHAHAHAHA!
Whew! You poor naive bastard. That was a good one.
"Guess the bank examiners picked s bad week to stop sniffing solvents? "
Don't you mean IN-solvents?
Not naive in the least. Grave yards are filled with dead Czars. It all starts with public protest.
This is beyond belief. Wells Fargo's 1st quarter profit forecast goes way beyond any fairy tale ever written in history. Here's what they say: Chief Financial Officer Howard Atkins says the results "reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results." Mr. Atkins, you are an outright liar and fraud.
Hmmm..."strength in tradition banking?" Who is borrowing that money and making their interest and principal payments on time? Has there been a bunch of businesses started no one is aware of yet? Are existing businesses expanding? You've got to be kidding me.
"strong capital markets activities." Where is this revenue coming from? Any big equity IPO's during Q1 that we missed? Corporate debt issuance was occurring, but at a very low rate and Wells Fargo is not a real player in that business. Mortgage securitizaton? I'm not aware of any. Please explain to me, Mr. Atkins, the source of your "strong capital markets acitivities."
"exceptionally strong mortgage banking results." This one is the most puzzling and troubling to me. We know, with hard data and facts, that home sales and mortgage issuance is plummeting every day. Where are the revenues coming from in this area? Mr. Marks goes on to cite that WFC's acquisition of Wachovia boosted their results. How on Earth can this be? Wachovia's balance sheet is mostly the kinds of subprime mortgage assets that are melting down to zero.
The only possible source of extraordinary revenues I can think of for WFC during Q1 would have been WFC's use of the massive amount of Treasury and Fed money extended to banks at little or no cost and being put to work in Treasury bonds and WFC earning the positive interest carry.
In fact, we know from hard data released every week that the very business activities that Wells says are creating massive profits are, in fact, melting down quickly in every corner of the U.S. and global economy.
For WFC to come out and make those claims is beyond fairy tale - it's outright fraud. And lest we forget, the beloved Warren Buffet owns over 10% of WFC, and thus de facto is standing behind this massive fraud. George Orwell is laughing uncontrollably in his grave now.
"this demand to hide the truth from the people is one step closer to communism!"
because as we all know communism (and socialism) is now defined as ceding power to crony capitalist stooges.
Well good luck with your Republican Bolshevik revolution, then. (Snarfle)
Re: " computer-generated "what-if" projections"
What if reality wasn't fantasy?
Did anyone notice the amount of dividend cut by Wells Fargo lately? These banks will all increase fees, cut divs, cut staff and disclose less information about their accounting, and instead of nationalization -- these crooks are able to continue the game they were playing, which obviously implies that they are not accountable for fraud. This is a new age we have entered and it will be very dark!
I have nothing more to add, except:
Re: "President Barack Obama says the economy is starting to show "glimmers of hope."
Now that banks can get away with fraud and not be investigated, all is well!
I have nothing more to add, except:
We have paid trillions for 'glimmers of hope' and glimmers of bank secrecy. Progress!
@ComradeChaos
WTF!!!!
I think the point WAS to leak them onto the INTERNET.....which, at least so for, seems to be the best place to get uncensored info.....
And what market integrity are you referring to, anyway?
I expect to see slang and signaling. If the FDIC can really make this formal policy stick, people who know they passed will be having parties, smiling on tv. Saying things like "I hope most of the other banks pass".
Or, similar to Citi's planned leak about income, just send an email to everyone in the company, and tell them it's not public data. Anything you send to a few thousand people will get published faster than Nemo's monkey can reply to a new post.
yuan(squeezed)
"this demand to hide the truth from the people is one step closer to communism!"
because as we all know communism (and socialism) is now defined as ceding power to crony capitalist stooges.
-------------
Why bother defending communism? It's a dead ideology imbraced by fools. Sorry if your one of the fools.
To preserve freedom and democracy sometimes......................................................... (censored)
There are about 4 of the second tier banks that are teetering right now. BankUnited, Ocean Bank, Corus Bank and AmTrust. I'll be watching what the FDIC does with these banks to see what policy makers will do with future problem banks. All of these banks are +10bln in assets, and all have significant problems with Non-performing loans.
I have written on problem banks a number of times on my site.
John Reeder
http://realpropertyalpha.com
"because as we all know communism (and socialism) is now defined as ceding power to crony capitalist stooges."
no this is chinese communism. Obama is open-minded.
wow, transparency i can believe in!