Don’t Stress Out
None of this information should come as any surprise to you. The notion that the government is going to ’stress test’ the banks and then tell you that any of them failed is completely absurd. Even if a bank or banks were to come up with poor scores, do you think that the gov’t would admit it in public? Don’t be silly.
This post at TBP says that the stress tests are a complete sham. Of course they are.
“There is no real purpose [of the stress test] other than to fool us. To make us chumps,” Black says. Noting policymakers have long stated the problem is a lack of confidence, Black says Treasury Secretary Tim Geithner is now essentially saying: “’If we lie and they believe us, all will be well.’ It’s Orwellian.”
This is little more than a massive PR campaign to build ‘confidence’ in the system on the one hand, providing some smokescreen so that we don’t notice that the other hand is continuing to shovel taxpayer money into these institutions through the back door.
More on the stress tests over at naked capitalism. Guess what? None of the banks are going to fail the test. Like Yves says, “Quelle surprise!!”
The whole point of this
charadeexercise was to show the big banks weren’t terminal but still needed dough, and I am sure it will prove to be lots of dough before we are done. But they now have the Good Housekeeping seal, so the chump taxpayer can breathe easy that the authorities are taking prudent measures to make sure his money is being shepherded wisely.If you believe that, I have a bridge I’d like to sell you.
What a friggin’ joke this country is turning out to be.
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We are becoming a banana republic. It is really very sad. I can remember from long ago “The end don’t justify the means”. Right now that seems to be our only guiding principle. Pass laws without reading them, the Fed breaking their own enabling legislation to do what they please, now don’t release the BS stress test results- how many laws does that violate. Every week that goes bye I think I can’t get more disgusted and then without fail, there is something new.
Comment by John — 4/10/2009 @ 12:31 pm
I’m with you John. It’s really hard to stay interested in the markets when you hardly believe that they’re actually ‘markets’ at all anymore, considering all of the ridiculous measures being taken, and the charades and facades that are being flung in our faces every day.
They are right in that they need to restore confidence in the system — but the way they’re going about it isn’t working for me. Quite the opposite, I’m afraid.
Comment by BMB — 4/10/2009 @ 3:12 pm
Policy questions aside, I think government interference ALWAYS makes it harder to invest. You never know when they’re going to make a decision that’s going to have unpleasant consequences, and I don’t know about you guys but I don’t have any “ins” to find out what they’re going to do ahead of time.
Comment by Brad — 4/10/2009 @ 4:45 pm