So remember that totally crazy rumor everyone thought was insane to the effect that pretty much all of the banks (16 of 19) failed the stress tests? Or were “technically insolvent,” whatever that means? That rumor seems to have originated with a April 19th weblog entry from Turner Radio Network listing 7 facts about the stress tests and summarizing with “Put bluntly, the entire US Banking System is in complete and total collapse.” Well, that eventually looked like a total hoax- intended to be outlandish for the shockingly poor results turned in by the banks tested. But apparently the real results aren’t particularly fantastic either. Specifically:
About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.
The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.
What could be a more perfect opportunity for the DecaSplit 10 unit splitscreen segment on CNBC? Reuters managed only eight (and since the exact list of the failuresbanks needing further assistance from various agencies and the gracious demeanor of the American public hasn’t been released yet, these might not even vaguely resemble the real list. Well except for Ken Lewis. And Count Vikula) so CNBC has a huge opening here.
About 10 U.S. stress test banks to need more capital [Reuters]
dont stress just cheat
or do the girly thing: give geithner a nice sloppy blowjob
They are playing with you trying to manage expectations.
@3- any other insights, capt obvious?
interesting, the original rumor I heard was that no one fails the stress test…and it seems that remains true. 10 banks get a c-/d+ but are able to do extra credit (ahem, raise capital) to get a passing grade.
@ cluzo- NO ONE ACTUALLY FAILS!
They should just choose C on all the test questions.
@ALL CAPS
lay off the caffeine and read the post again…
Just make the test easier. Sheesh.
Grade it on the curve.
the comments and the rumors both an apt illustration of the dangers of placing a little bit of information in the hands of the public that has no idea how it interpret it. the degree of mismanagement on the part of the government is pathetic! i think that’s why they keep delaying the announcement of the results; someone finally woke up and had a belated oh shit moment.
From the article…
“But investors remained on edge as Thursday’s deadline neared. The Associated Press reported that Wells Fargo was asked to raise more capital after its stress test.”
Perhaps TGFD is in a fog, but in light of the above, could someone please tell me why WFC went up 25% yesterday?
The Guy from Delaware
“At one point, officials believed as many as 14 banks would need to raise more funds to create a stronger buffer against future losses, but that number has fallen in recent days.”
-WSJ
@TGFD dilution is the new “killin’ it”
Get ready for a metric assload of secondaries
@4
Genius, that was another way to say – Don’t waste time with rumors.
capt obvious
TGFD
Lazarus? Is that you?
2 simple things would greatly improve Dealbreaker:
1) the AboveTheLaw limmerick dude starts posting comments
2) “The Guy From Delaware” is banned
TGFD LIVES!!!!!!
Guests@#19,15,14…
Your inability to answer TGFD’s #13 question indicates rather strongly that you three are in a fog too.
In addition, @#19 indicates that s/he is a clown.
Guest@#20…TGFD does, indeed.
Guest@#18…TGFD never left.
The Guy from Delaware
p.s. Does anyone know the answer?
@21 ’cause Buffett says WFC is a “great” bank.
Mercury retrograde, Thursday.
WHzOpd Major thankies for the blog article. Want more.