The 'Too big to fail' meme will soon become something like "Too big, failed!"
But you'll never know.
The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession ...
The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. ...
“If you allow banks to talk about it, people are just going to assume that the ones that don’t comment about it failed,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
The TARP funding is another example of "who are YOU trying to kid?" Gummint horsehockey...
HT: Calculated Risk
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3 comments:
I guess this is why the hammerheads at Treasury won't allow banks to repay the TARP money, figuring those that can't are in terrible shape (oh...btw...they are!!).
This will get worse. Even if the recovery has started (andd I doubt it), we'll be back in recession in 2010. There's nothing to rebound on and the TARP and stimulus packages have done and will do nothing. That's why they don't want banks reporting "stress test" results.
TARP and the stimulus package are two different things entirely.
TARP has actually been rather effective if you keep track of LIBOR.
That being said, I agree that this is simply a bottoming out phase and not a true recovery. We haven't even hit peak credit default rates yet. Wait until this hits the banking system later this year.
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