Stess Tests In Fact Causing Stress

I wrote a couple of posts last week questioning whether the government stress tests were really going to test the banks. Word today is that at least a few of the 19 banks being tested will likely need to raise new capital - though they are protesting the results, so who knows. If the government comes out saying certain banks need more capital I will eat (some of) my words. The stress tests baseline is foolish at this point as the economy is trending towards the worst case stress tests scenarios. I am not certain where the government will come in, but certainly some banks, like Bank of America and Citigroup, are needing more capital no matter what test you use.

And talking about tests. Mr. Lewis (I use "Mr." generously) is perhaps soon to see the door at Bank of America. Given the BofA acquisitions over the past year or so, I would have voted his hide out a long time ago. Some major shareholders are waking up finally to the terminally ill condition he has caused with acquisitions. I mean if I could tell they were stupid without any due diligence then he is an idiot. Just my humble opinion, by the way. Don't shed a tear here as I am sure he has made many millions for his foolish ways and undoubtedly has a contract that will give him many millions more if he is put out to pasture. If only shareholders could figure a way to sue him to get it back. Were I still in private practice I would love to spend countless hours figuring out how to sue these (fill in your own derogatory term here) on behalf of shareholders or even taxpayers. I would even do it for reasonable flat fee just to make these (fill in again) pay for what they have done to this country and the world. These individuals need to be hung very high.

Are we hanging them high? Of course not. We are rewarding them with hundreds of billion - trillions - in taxpayer largess. I am truly sick!!

I truly hope Lewis is hung high by his own shareholders. When they have to convert the government prefered shares to common, they will be highly diluted. They cannot be happy. I am certainly not.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqtmeiUmp8ug&refer=home

Other than the true tragedy developing with a potential swine flu pandemic, there is nothing else I saw worth reporting.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiUTjQxkoGZM&refer=home

Disclosures: None