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To: CalculatedRisk who wrote (186284)2/24/2009 2:33:50 PM
From: James HuttonRespond to of 306849
 
I mistakenly understood that the "stress test" would be used to determine who would survive and who wouldn't. No, it's just going to be used to determine how much more dough the biggest banks get.

Isn't this Japan with no end in sight?



To: CalculatedRisk who wrote (186284)2/24/2009 2:43:25 PM
From: PerspectiveRead Replies (1) | Respond to of 306849
 
<if they are seriously insolvent, Bernanke's solution is the worst approach.>

What do you suggest? Pre-emptive takedowns of bad banks? Good ol' fashioned FDIC receivership on an as needed basis?

`BC



To: CalculatedRisk who wrote (186284)2/24/2009 3:08:57 PM
From: patron_anejo_por_favorRespond to of 306849
 
>>But how does he know until the stress tests are complete?<<

He doesn't...just like he doesn't know that the economy's gonna recover in 2010, but it makes a good cover story....and it's the only way he can be sure that current bank management stays in place (the prime objective in all the federal reserve member banks).