The Septic Tank busted yet again and his warm feces is dripping into Dumb Money's open mouth (Fed boss: Bank exam results should buoy confidence; AP). Of course Bernanke supports his own amateur stress test, you need to eat your own crap before you can spit it into the public. The test was designed to increase battered confidence and has been inflated with optimism as well as ignorance which is the reason it will backfire and further diminish credibility of the Fed.

The irony is that those Dumb Money investors who actually subscribe to the results of the stress test and view it as a sign of stability which in turn increases their own stupidity, are the ones who end up with heavy losses once reality catches up with them. Those who wish to chase an illusion may do so, nobody will stop them but they have to keep in mind that you can't escape reality. The Fed tries to inject confidence with the ignorance of reality, and therefore engages in counter-productive moves which will further deteriorate confidence. Seems like Bank of America took the results serious (Bank of America sells $7.3 billion CCB stake: source; Reuters). A sad, sad story for Bank of America, which will repeat itself over and over again.

It is a welcomed development that other sources provide some insight into the bank balance sheet mystery (KBW analysts see regional banks needing $15B; AP). KBW covers, according to the report, 163 banks of which 71 banks require $15.2 Billion. Give them the benefit of the doubt that this figure is not inflated by false optimism, this would translate to roughly $750 Billion which banks require, two to three times as much once the recession deepens. This figure is a wild estimate and was derived by dividing 8,000 banks (there are more in the country) by 163 (the coverage area of one company which analyzes banks) which translates in 49 such cases where $15.2 Billion will be needed (this assumes an equal proportion of problems across each area of coverage). Again, this is a wild guess but a figure which comes close to reality.

It is sad that, given all the problems present in the financial system; deserved problems as a direct result of ignorance, lack of knowledge and stupidity, more problems are created on purpose. The socialistic hunger for power and control over banks creates more problems for banks (Paying back TARP: Not as easy as writing a check; AP). It can be as easy as a simple transfer back to the Treasury but that would translate into an immediate loss of control for the socialists which acted very quick to create stumbling blocks for those who wish to rid themselves of the socialist parasite. The sales pitch to the masses will be that it is required for those who wish to repay TARP money to meet certain requirements in order to prevent a second crisis, which is pathetic and ignorant since the sheer existence of power and control over banks ensures a second crisis.

Shareholder dilution is not even mentioned by socialists, who could care less about that; at least until they realize that over 100 million citizens saw their pensions melt away during the socialist power trip. The irony is that those who cheer and support the dilution, are those affected the most by heavy financial losses in their own portoflios. Stupidity execute to perfection.

Citigroup is just another example an illusion that TARP had a beneficial impact on them. Citigroup took over $45 Billion in TARP money and made loans to various sources (Citigroup: TARP loans near $45 billion mark; AP). In other words, Citigroup took tax payers money to make loans which was part of the idea behind TARP in a pathetic attempt to keep worthless banks in existence for a few more quarters. Bad loans were part of the reason banks' balance sheets were not balanced anymore and now the same group of mismanagers get more money in order to do the same all over again, another example of ignorance towards the core of the problem. Citigroup could have been ignored altogether in order to make most of those loans but that is a different story, if you don't get the point load up on a few more mutual funds and hope for change.

The price of ignorance goes up as more time is wasted but can you afford to pay the bill once reality asks for it?


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