Thursday, April 09, 2009

YOUR MONEY IS NONE OF YOUR DAMN BUSINESS, PART II

Sorry if this post rambles a bit, but I've hit another of my anger overload thresholds. You'll remember that "stress tests" of banks' financial health is part of the Public-Private-Geithner-Throw-Money-Down-The-Shithole program, or whatever this crappy plan is called these days. Well, a couple days ago Reuters explained how Timmy & the Treasury plan to handle the results of these tests. (H/T Yves):
The U.S. Treasury Department is planning to keep the results of any completed bank stress test under wraps until after the first-quarter earnings season to avoid complicating stock market reaction.
Whataya know. Another version of the favorite catch phrase of Obama, Geithner, and Bernanke: "Your money is none of your fucking business. Just give it to us and let us give it the banks. We and they know what's the best use of your hard-earned money. Suckers." Wait, there's more!

The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.

Banks could reveal their own results, but Treasury is hoping they will hold off until after the earnings season ends for most U.S. banks on April 24, said the source who sought anonymity because the Treasury has not made a final decision on what to disclose.

* * *

Officials realize it may be hard to keep the results under wraps, and are looking for ways the banks could disclose some details without unduly disturbing the markets. They are also looking at providing some summary information about how the banks fared.

* * *

The stress tests at the biggest banks are part of a wide-ranging effort to restore stability to a sector hit by huge mortgage-related losses.

The tests are designed to determine the depth of banks' capital shortfalls if conditions deteriorate further. After the tests are completed, the banks will have six months to either raise private capital or accept government funds.

But officials are worried about how the market will react to the stress test results if there is not a clear recovery path for a bank that is deemed to have a large capital need.

The last thing Treasury wants to do is set off a panic, the source said.

Make no mistake what all that Newspeak means. "Stability." Fear of "setting off a panic." Don't want to "disturb the markets." It means -- in no uncertain terms -- that our administration cares more about the huge institutions that dominate Wall St. than it does about its citizens. The Insiders in Washington who've already given the banks offensive amounts of money and will give them additional money in the future are hiding the true condition of the banks from the people who will continue to shell out this money.

"We can't tell you where your money will go . . . or why. Or even how it'll work," they're saying. "It's none of your business really. And we don't want to cause them to lose anymore or you'll just have to give us more to bail them out again."

And why this doesn't cause more outrage is completely beyond me.

----------------------------------------------------------------------

Update -- And also a H/T to Yves on this one, but the NY Times reports that:

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.

Let's translate the Reuters and NYT pieces into English and sum up what our own government is telling us, shall we?

Hey folks, how you doing? We've been conducting stress tests. Workin' real hard, baby! Hours and hours of work. Or, sometimes we just used the numbers the banks gave us. Anyway, the numbers are actually pretty good. Damn good, we tell ya. But we can't show you the numbers just yet. We mean, they're good, but . . . you know, someone could misinterpret them as bad . . . even though, trust us, they're real good. But that misinterpretation could cause a panic. Or something like that. Something that could threaten stability.

Or cause the banks to lose more. Even though they're actually in very good shape. Really, they are.

But just in case, we're probably gonna need a couple trillion more to bail them out again. Thanks.

What is the sum of Outrage + Absurd? For me it's more outrage. But I fear for many it's something else. What is it?

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6 Comments:

Blogger Smitty said...

give them additional money in the future are hiding the true condition of the banks from the people who will continue to shell out this money

That is exactly what Professor Black was saying in his Moyers interview. The Insiders know how shitty this all really is, and will continue to hide it from the people who ought to know, because if the real truth got out, mayhem ensues.

I say let it!! Once we have real, true accountability and a real, honest grasp of the scope of the problem, we can work out a real, honest solution, and possibly even fine or jail the people who got us here.

No response to my letters to either of my Senators or my Congressman yet.

11:12 AM  
Blogger George said...

My favorite part was "banks could reveal their own results."

And I could have a threesome with Scarlet Johanson and Neko Case.

(Actually, the odds are better for the threesome--go me!)

WV: worynon (as in what us poor regular schmoes should do while Geithner takes care of everything)

12:34 PM  
Blogger Bob said...

For the sake of argument, let's just say that the money thrown at the banks was out of necessity and that the plan was the best that well-meaning folks could think of to rescue the banking system.

Even with that, there may have to come a time when we say there is no more money to spend, and there is nothing else we can do but pray and hope we don’t see the next great depression after these banks crash.

I am buying gold and guns and burying them in my back yard as a savings plan.

(My word verification is "piting" perhaps related to the pit I will be dropping my money into or the pit, as in "bottomless" that seems to be the TARP.)

1:18 PM  
Blogger DED said...

Well, if people panic, there will be a run on the banks, which was common in the 1800's and on into the Great Depression. We know the banks don't have enough cash on hand to cover everyone since they over leveraged themselves. And as for the FDIC bailing out everyone's accounts, we know there isn't enough cash to cover them either. So, it makes sense for them to say, "Everything's hunky dorey," yet keep it under wraps.

I understand it. I don't agree with it. And it certainly flies in the face of the "transparency" campaign rhetoric we heard last year.

Obviously (we all know) it's about keeping the big banks in power. If the gov't didn't intervene then the little banks could benefit from the dissolution by buying out pieces of the big banks' assets at deep discounts and offering sanctuary to their customers. That's how capitalism is supposed to work, right? Instead, we've got corporate welfare on an unfathomable scale.

4:32 PM  
Blogger Mike said...

if the real truth got out, mayhem ensues.

I say let it!!


Hear, hear.

I could have a threesome with Scarlet Johanson and Neko Case.

Send the video. Just make sure to put the black box over you.

I am buying gold and guns and burying them in my back yard as a savings plan.

Can't argue with that plan.

as for the FDIC bailing out everyone's accounts, we know there isn't enough cash to cover them either. So, it makes sense for them to say, "Everything's hunky dorey," yet keep it under wraps.

Exactly.

8:16 AM  
Blogger Weaseldog said...

Bob said...
For the sake of argument, let's just say that the money thrown at the banks was out of necessity and that the plan was the best that well-meaning folks could think of to rescue the banking system.


Why should we make such an assumption? We've seen what this 'solution' does in Argentina, Russia and Venezuela. We've seen Russia's and Venezuela's success in doing a U-Turn and getting out of this trap. We've seen Argentina's completely failure and devolvement into a completely corrupt financial and governmental system.

Why should we assume that if we continue to do what Argentina did, that we'll get different results?

10:18 AM  

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