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Instead of Actually Dealing With Rampant Mortgage Fraud, Fed Orders More Faux Stress Tests
Well-known British economic writer Jeremy Warner said yesterday that the European stress tests were a sham:
European stress tests weren't worth the paper they were written on ...
Most
of us said at the time that the tests had been designed for banks to
pass, yet the fact is that it is now hard to believe they took place at
all. Conditions have no where near deteriorated as far as the tests
had assumed, yet still Allied Irish looks essentially bust. In other
words the tests were a lie.
If the Irish stress tests were a sham, what about the rest of the eurozone?
American stress tests were a sham as well.
As I noted in October 2009:
- Time Magazine called the previous stress tests a "confidence game" and Geithner a "con man" for running them deceptively
- Paul Krugman called the stress tests a mere "self-esteem class" for banks that no bank would be allowed to fail
- Nouriel Roubini said the stress tests "fail the basic criterion of a reality check"
- William K. Black called them "a complete sham"
- FDIC head Sheila Bair didn't believe they were credible [and former FDIC chair Isaac said that the stress tests backfired, and actually rattled markets]
- The stress tests were a P.R. stunt devised by the banks themselves
Indeed, the Federal Reserve itself has more or less admitted that the stress tests did not really measure solvency, saying:
"Even if the tests showed a bank needs more capital, that "is not a measure of the current solvency or viability of the firm".
So what is the Fed's bold new plan of attack for dealing with the deteriorating economy and the mortgage crisis?
More stress tests!
As the Wall Street Journal pointed out last week:
Fed Orders 2nd Round of Stress Tests
Officials Want Banks to Prove Viability in 'Adverse' Conditions; a Preface to Raising Dividend Levels
***
Concerns about the health of most large institutions have decreased, though
investors remain nervous about the extent of losses banks face if they
are required to repurchase flawed mortgages and mortgage-related
investments. As part of its review, the Fed will require banks to assess their exposure to so-called "put-backs" of mortgagesBanks
will also have to come up with their own set of metrics, including the
ability to withstand "very severe" economic and financial-market
events, the Fed said.
- advertisements -
the stress test is conducted to make a rough estimate of
how much has been stolen so far and how much more can
be stolen under a variety of potential scenarios, apparently
a systemically important formality.
hmmm..at the time of the first stress tests the prevailing social mood allowed for the desired result - soothing the market.
at some point - QE, bailouts etc. will be viewed negatively in the prevailing social mood -- thus the markets.
I wonder if we're there yet...seems we're at least close to me.
(voice of John Wayne mysteriously enters head)
Well, it's about time.
What with all the pussy footin' been goin on around here.
At least these test's gonna ahve a liquidity measure in 'em an' the others didn't
After all, theres no banks ever gone bust on anythin' but bein's illiquid, insolvent,
Pilgrim
i'd give up some of my silver to see WILLIAM K. BLACK charge into WASHINGTON D.C. on a great big white stallion with a sword in his hand....TAKE THIS !! & TAKE THAT for the AMERICAN CITIZEN ! GOOD vs. EVIL !
Big Hat No Cattle Randy Newman
http://www.youtube.com/watch?v=y-5jZs8K_o0&NR=1
.
Since I was a child
I've tried to be what I'm not
I've lied and I've enjoyed it, all my life
I lied to my dear mother
to my sisters and my brother
and now I'm lying to my children and my wife
Big Hat, no cattle
Big head, no brain
Big snake, no rattle
I forever remain
big hat, no cattle
I knew from the start
Big boat, no paddle
Big belly, no heart
Can't remember why I do it,
Oh, maybe I can.
An honest man these days is hard to find.
I only know we're living in an unforgiving land.
And a little lie can buy some real big peace of mind.
Oftimes I wondered what might I have become,
Had I but buckled down and really tried.
But when it came down to the wire
I called my family to my side
Stood up straight, threw my head back and I lied, lied,lied
Big hat, no cattle
Big shoes, well you know...
Big horse, no saddle
He goes wherever I go
Big hat, no cattle
Right from the start
Big guns, no battle
Big belly, no heart
When it came down to the wire
I called my little family to my side
Stood up straight, threw my head back and I lied, lied,lied
lied, lied, lied
Big hat, no cattle
Big head, no brain
Big snake, no rattle
I forever remain
Big hat, no cattle
I knew from the start
Big boat, no paddle
Big belly, no heart
Big boat, no paddle
Big belly, no heart
Great tune, says a lot about a country of used car salesmen ...
We are about to embark on World War 3 and its starts with N. Korea. Please watch the video “Brink of War, Mission Accomplished at (http://www.youtube.com/watch?v=ZvVDt-sPQ8w).
Anonymous-
The more we can distract you from the truth and from the Great Depression II in this Country, the better!!
yea, i'm spreading this one around now too.
.
Who bankrupted Ireland? "Now across Europe the great blame game will rumble back into play. Our banks, your banks, their banks, or is it your feckless householders or ours, certainly can't be theirs, they're still doing well in Germany. Expect lots more national stereotypes to be wheeled out for ritual defamation.So let's ask who it was took a dump in Ireland?
First, the suspects." ......
http://golemxiv-credo.blogspot.com/2010/11/who-bankrupted-ireland.html
airplane
http://www.youtube.com/watch?v=t8_koBdi0tM&feature=related
http://www.youtube.com/watch?v=5ilGGP9BDZs&feature=related
http://www.youtube.com/watch?v=tg6XaXvYKyU
The only option of a failed nation.
This is the government Ponzi scheme, at its best (mortgage fraudster)!
This is the government Ponzi scheme, at its best (mortgage fraudster)!
QE2, stress tests, a chorus singing 'the economy is recovering' ... doing the same thing over and over hoping for a different result is?
From what I've read the make-up of the tests and the results will be known only by The Ben Bernanke.
He's also the only one who knows what the stress test are for.
Stress tests are a cheap carnival act, pay a quarter and see the tree headed worm lady.
WB7,
May I set up a booth at the Carnival, I have Calendars to sell?
http://jaggermafia.com/?p=9411
Mr. Banzai,
You have an A+ sense of humor!
Distressed Testee
What we have here is the "Jack Off Seizure Two Step" also known as "The Bernanke"!