FYI: Obama and Timmay are rigging the "stress tests" at every turn

annarborgator · Post by **annarborgator** » Fri Feb 27, 2009 1:22 am

Let's tally it up so far:

1. The plan doesn't include enough inspectors/regulators to adequately assess the largest banks' books in the given time frame.
2. There aren't enough regulators in existence with the skill and understanding required to assess those books in the given time frame.
3. Their "more adverse" projection for unemployment is a high of 10.3%. That's not much more stress--and not much of a test.
4. Their "more adverse" projection for house prices is for them to return to historical levels with ZERO overshoot to the downside. Again, not much of a test.
5. Their proposed concept of "sampling" the banks' books is horribly childish given the issues at hand.
6. The original paperwork is gone for many loans/assets because it's all been packaged and re-packaged so many times, meaning that the government will be forced to rely wholly on the banksters' "models" in those cases to assess them at all. What have we learned about models?

I just wonder what they've decided the verdict to be. I swear, life just gets curiouser and curiouser...I really am amazed by this stuff. Can't believe the greatest nation on earth is letting themselves be deceived.

annarborgator · Post by **annarborgator** » Fri Feb 27, 2009 1:26 am

Interesting note I came across in an article discussing nationalization pre-privatization:

Economic analysts have already performed such a test at the aggregate level. The results were not pretty. For example, Goldman Sachs looked at the US banking sector’s holdings of the current “toxic” pool of assets, such as option ARM residential mortgages, subprime residential mortgages, Alt-A residential mortgages, credit card debt, second liens/home equity loans, consumer auto loans, and commercial real estate. Expected losses come in at around $900 billion. These losses give the banking sector very little wiggle room. Therefore, there is the real possibility that some LCFIs are bankrupt – the face value of their liabilities exceeds the current value of their assets.

http://www.voxeu.org/index.php?q=node%2F3143

Uhmm..hm. DO YOU THINK??