Stress testing the stress test reports
Posted by Paul Murphy on Apr 20 13:38.
ftalphaville.ft.com
The Turner Radio Network claims to have obtained the stress test results for the top 19 banks in the US, which are said to be “very bad.”
1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.
2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.
3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!
7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The blog attached to the Hal Turner Show (fronted by a white supremacist - “Honest talk in a time of universal deceit”) adds that the FDIC’s “Problem List” of troubled banks includes 252 institutions with assets of $159bn. Furthermore, 1,816 banks and thrifts are at “risk of failure”, with total assets of $4,670 bn, compared to 1,568 institutions, with $2,320bn in total assets in prior quarter.
So far, something of a scoop…except that Mr Turner and friends seem to be worried that the outside world might not believe them.
Sunday’s blog post — entitled “LEAKED! Bank Stress Test Results!” — was followed up with a strange update in the early hours of Monday morning, stating that anyone sceptical of the veracity of the story should check out the radio network’s coverage of a leaked Department of Homeland Security memo a week earlier.
Then there is a reference to Reuters somehow “confirming” the stress test results with an article on April 6, although the report linked to is actually a piece of analysis by an independent firm, Weiss Research.
Oh, and then there’s a post on how the Hal Turner Show was allegedly first to publish details of the CIA torture memos, time-stamped Friday night - at least 24 hours after the New York Times and others published all the details… |
