Geithner Declares the Universe is Safe

Treasury Secretary Geithner is spinning the results of the not too stressful stress tests. He says everyone will be please with the results of the tests that all tested banks would pass regardless.

“I think the results will be, on balance, reassuring,” Geithner said. “None of those 19 banks are at risk for insolvency.”

I guess that depends what your definition of insolvency is. We know that loan losses are increasing in all sectors of real estate. We are expecting unemployment to increase some more. We know at least 20% of home mortgages are currently underwater. That doesn't look like a very good scenario.

Consider this: under a not too stressful 'stress test' BofA is said to need an additional $34 billion in capital. What would happen if this was a real 'stress test'?

How much of this additional capital will be equity versus more debt?

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Maybe I should say the financial oligarchy

is safe and has been saved.

Following the script ..

The official denial has now been recorded.

What a surprise.. why would anyone need to raise capital now?

It has always been about class warfare.

Oh yeah I feel really safe now

What is tomorrows plate of BS?

Here's Geithner in 2007 on testing.

Did he promise to get this all cleared up? What was his record at the NY Fed?

As head of the New York Federal Reserve Bank, Geithner gave an interview to Jenny Anderson of the New York Times in Feb. 2007. When asked about the high risk credit derivatives market, a risk he claimed that he'd addressed, Geithner said: "The fact that the banks are stronger and risk is spread more broadly should make the system more stable. We can’t know that with certainty though. We’ll have a test of that when things next threaten to fall apart."

What is this?  A science fair project.  Testing when 'things threaten to fall apart."  How about testing to fix problems before things get bad enough to threaten to fall apart. 

Will anybody in corporate media mention that we've had Mr. Geithner's anticipated "test" and things did "fall apart" because the banks were weaker not "stronger."