The Fed / Treasury first announced that banks
would be subject to stress tests back on Feb. 10, 2009. This WSJ account
is the earliest mention we’ve been able to find:
FEBRUARY
10, 2009
Banks
to Get Stress Test Before Aid
As Part of Revamped
Bailout, Cash Will Go to Those Deemed Healthy Enough to Lend
WASHINGTON -- Many U.S. banks will be subjected to rigorous examinations to
see if they are healthy enough to lend before receiving additional financial
aid, according to people familiar with the matter.
The stress tests will
be part of the bailout revamp to be announced Tuesday by Treasury Secretary
Timothy Geithner. In addition to fresh capital injections into banks, the new
approach will include programs to help struggling homeowners; a significant
expansion of a Federal Reserve program designed to jump-start consumer
lending; and a private-public partnership to relieve banks of bad
assets……
So…. as of the date of the
article above – WHEN STRESS TESTS WERE CLEARLY PLANNED and
ANTICIPATED – FASB [Financial Accounting Standards Board] rules CLEARLY
stipulated that mark-to-market accounting was the measuring stick for
prudently gauging the true financial health of any banking institution.
Benedict Benny’s Ballsy
Bait & Switch
Something happened to the
methodology for how stress tests would be conducted on the way to the recent
G20 Central Banker confab, as this Reuters article dated April 2, 2009 reveals;
US STOCKS-Wall St climbs on G20, FASB hopes
Thu Apr 2, 2009 10:23am EDT
By Chuck Mikolajczak
NEW YORK, April 2 (Reuters) - U.S. stocks rose for a third
straight session on Thursday on optimism the G20 meeting in London will agree
on ways to temper the economic crisis and that new U.S. accounting guidance
will favor banks.
World leaders will triple the war chest of the IMF to fight the
worst economic crisis since the 1930's and impose curbs on financial markets,
monetary sources at the G20 summit said. For details see [ID:nL1230573].
In the United States, the Financial Accounting Standards Board
said new mark-to-market accounting guidance will be effective for the
second quarter, with early application allowed for the first quarter, and not
be retroactive.…
We
can only surmise that the TRUE reason for this accounting chicanery is
to obfuscate the true condition of institutions such as Goldman Sachs –
which recently, for the first time – was subject to minimal
transparency requirements when, as a bank for the first time, they were
required to report to the Office of the Comptroller of the Currency [OCC] and
their financials were subject to the OCC’s Q4/08 Quarterly Derivatives
Reporting:
Ladies
and gentlemen, the Total Credit Exposure to Capital ratio is one of
the most telling capital adequacy ratios known to man. If ever there
was a failing grade on a “stress test” – HERE IT IS IN
SPADES!!! The aforementioned measure of capital adequacy, [1,056.4]
in Goldman’s case, is so TOXIC – in fact; one can only wonder if
regulators might have required radiation suits and Geiger Counters to safely
measure the TOXICITY of Goldman’s books. Goldman’s figures
stand out almost 5 times worse than those of Citibank and Bank of America and
11 times those of Wells Fargo.
Of
course, with the discarding of real accounting standards in the United
States, the true extent of this toxicity will now conveniently be obfuscated
from the general public in further OCC reports,
“..new mark-to-market accounting guidance will be effective
for the second quarter, with early application allowed for the first quarter,
and not be retroactive.
Not
retroactive????? “Effective for the second quarter, with early
application allowed for the first quarter??????” Who
are these CLOWNS trying to kid? From this time forward, this shall no
doubt become known as “the Goldman Clause”.
It’s
hard to believe that the Chairman of the Federal Reserve would be involved in
such a low-down-good-for-nothing traitorous act, ehhh? Then we’re
sure it will be even more difficult for the commoners to wrap their heads
around this treasonous tid-bit:
According to testimony from the Bank of
America CEO's February sit down with Andrew Cuomo,
Lewis was "urged to keep quiet while the two sides negotiated government
funding to help BofA absorb Merrill and its huge losses," apparently for
the good of the financial system and the country, and since he *is* head of
America's Bank, [Lewis] felt urged to comply (plus the bit about harm to his
body if he failed to do so).
Q: Were you instructed not to tell your shareholders what the
transaction was going to be?
A: I was instructed that 'We do not want a
public disclosure.'
Q: Who said that to you?
A: [Hank the Hammer] Paulson...
Q: Had it been up to you would you [have]
made the disclosure?
A: It wasn't up to me.
Q: Had it been up to you.
A: It wasn't.
Oh, and there was also the matter of Paulson threatening to take
Lewis out (of office) if he didn't do exactly as he was told.
During his testimony, Mr. Lewis described a conversation
with Mr. Paulson in which the Treasury secretary made it clear that Mr.
Lewis's own job was at stake. Mr. Lewis still was considering invoking his
legal right to terminate the Merrill deal. Mr. Paulson was out on a bike ride
when Mr. Lewis phoned to discuss the matter, according to the transcript.
"I can't recall if he said, 'We would remove the board and
management if you called it [off]' or if he said 'we would do it if you
intended to.' I don't remember which one it was," Mr. Lewis said. "I
said, 'Hank, let's de-escalate this for a while. Let me talk to our board.' "
In
a follow-up interview by Mr. Cuomo, conducted with Mr. Paulson’s
office, this account of Cuomo's interview was reported by Tom LIndmark at
Seeking Alpha,
“In an interview with this Office, Secretary Paulson
largely corroborated Lewis’s account……”
“Secretary Paulson has informed us that he made the threat
at the request of Chairman Bernanke. After the threat, the conversation
between Secretary Paulson and Lewis turned to receiving additional government
assistance in light of the staggering Merrill Lynch losses……..”
These Cads Have Other Dirty Tricks….
Now
admittedly, Sir Benedict of Bernanke was not the “lone shooter”
sitting all-by-his-lonesome on the sixth floor of the Book Depository in Dealey Plaza – he had help. Rumor has it that none other than Tiny Turbo-Tax Timmy Geithner was
spotted on the grassy knoll, armed with the only known copy of “The Crown
Jewel” which was reported “swiped” from the Book Depository
[or Fortus Knoxus, perhaps?] later on that evening;
You see folks; a rising gold
price historically acts a canary-in-the-coal-mine – alerting all that
things are “not right” in the monetary system. Additionally,
gold has historically served as the-go-to flight to quality / wealth
preservation trade. In the current environment, the powers that be
desperately need U.S. Bonds to serve that function. This is why gold
has been auspiciously stifled [murdered] so many times at the EXACT moments
of U.S. Dollar and Bond negative news. The current Obama Administration
is being “coached” by none other than Paul Volcker, who is
clearly and factually on the record regarding the rising gold price circa
1980 – [excerpted from Volcker’s memoirs published in The Nikkei
Weekly, November 15, 2004];
“That
day, the U.S. announced that the dollar would be devalued by 10%. By
switching the yen to a floating exchange rate, the Japanese currency
appreciated, and a sufficient realignment in exchange rates was realized. Joint
intervention in gold sales to prevent a steep rise in the price of gold,
however, was not undertaken. That was a mistake.”
Fool me once, shame on
you. Fool me twice………
Maybe pigs really can fly?
Rob Kirby
KirbyAnalytics.com
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