Stress Tests

The stress tests on the banks are a lot of hooey, and anyone with a brain can see that.

From Yahoo: U.S. Planning to Reveal Data on Health of Top Banks. Oh, Really. Propaganda is more like it. Thank god they're so incompetent they can't get their story straight.

The administration has decided to reveal some sensitive details of the stress tests now being completed after concluding that keeping many of the
findings secret could send investors fleeing from financial institutions rumored to be weakest.

Obama still hasn't figured out that murkiness, lies, manipulations, opacity, economic rent-seeking, and lack of transparency is what got us into this mess and destroyed trust in the system. It won't get us out. Who will believe a stress test that everyone passes, when 80% of them are on life support as we speak?

As a result, indicating which banks are most vulnerable still runs some risk of doing what officials hope to avoid.

Obama wants to have his cake and eat it too. Message to Prez-O, you can't say "this bank is better than that bank, but we're afraid to tell you because you might panic, so just trust me that they're all okay."

Goldman’s action has put pressure on other financial institutions to do the same or risk being judged in far worse shape by investors. The administration feared that details on healthier banks would inevitably leak out, leaving weaker banks exposed to speculation and damaging market rumors, possibly making any further bailouts more costly.

Thank god Goldman has finally done something useful. Maybe the administration will decide that the stress tests are a bad idea and just scrap them.

“The purpose of this program is to prevent panics, not cause them,” said one senior official involved in the stress tests who declined to speak on the record because the extent of the disclosures were still being debated. “And it’s becoming clearer that we and the banks are going to have to explain clearly where each bank falls in the spectrum.”

And we're supposed to believe the banks are okay because Obama will say bank A is less rotten than bank B, but you can eat both of them. Well, thanks, Prez-O! Rotten banks are my favorite meal.