Saturday, April 25, 2009

Stress Pop Quiz

For the largest 19 U.S. banks, the stress test wasn't much of a test, since the results were pretty much a foregone conclusion. The Fed wants some banks to have more capital but doesn't want that capital, or any more, coming directly or indirectly from taxpayers. This from the latest info leaked to the WSJ.

If the Fed does want some banks to raise more money, and doesn't want to paint any banks with the ugly brush, it is going to be difficult to let the best banks repay the TARP money any time soon. My bet is that it happens about 5 minutes after the banks that need more money raise it.

This is yet another issue that will be eased by higher stock prices, but will be eased. We'll get there eventually.

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