bailout crisis: Government Regulators Subject 19 Banks to ‘Mild Discomfort' Tests
- 02/25/09 10:05 AM
The assumptions for the baseline scenario and the adverse scenario used to develop the so-called ‘Stress Tests' are overly optimistic and fall far short of any 'worst case' scenario to the point that some may charge that they are more like a ‘Best Case' scenario and a ‘Mild Discomfort' scenario. The baseline scenario assumes: Gross Domestic Product (GDP) falling 2 percent this year, Unemployment rising to 8.4%, and Home prices dropping another 14%. The adverse scenario assumes: GDP falling 3.3 percent, Unemployment rising to 8.9%, and Home prices dropping another 22% With the exception of Citi Bank (apparently it receives special treatment) … (5 comments)
bailout crisis: We Need Restitution for Damages!
- 02/23/09 10:02 AM
Reckless, irresponsible, and criminal behavior by the executive officers in our financial institutions has damaged investors (corporate, public agencies, non-profits, & private), customers (businesses, public agencies, non-profits & individuals), competitors, markets, government income (local, state, and federal), taxpayers, and insurers. Insurance companies are at risk of sizeable losses for claims filed against policies written for Director and Officer Insurance, Professional Liability (E&0) Insurance, Fiduciary and Trustee Insurance, Crime/Fidelity Insurance. Etc The perpetrators of this crisis have engaged in misrepresentation by misrepresenting risks, over stating performance, and failing to disclose their financial condition. The Ratings Agencies are no less than co-conspirators who, … (3 comments)
bailout crisis: Congress is Ramping Up to Flood the Economy With Public Funds
- 02/09/09 05:15 PM
Congress is ramping up to flood the market with public funds through the Federal Reserve, the Department of the Treasury, and other government channels. They will use the FDIC to provide any necessary guarantees. They repeatedly promise transparency and accountability but what have they published to date. Have you seen a: Definition of the Problem(s) Project Plan Goal(s) Estimate of Required Resources Timelines for accomplishing specific prioritized objectives Measures of effectiveness Risk Managment Plan Project Completion Date Duration of the Emergency Solution Life Cycle Maintenance Plans When necessary a plan for taking the Emergency Solution out of service I have managed many … (3 comments)
bailout crisis: What Would Happen If the FDIC Seized Citi Bank?
- 02/08/09 01:30 PM
Perhaps the FDIC is reluctant to seize any of the banks that were deemed to big to fail because of the impact it will have on all of the other banks that are carrying the so called "Tarnished Assets" on their books. The reason, the Book Value is significantly greater than the True Market Value. If the FDIC seizes one of these banks and then auctions off "Tarnished Assets" of that bank it will establish a Market Value for the "Tarnished Assets" held by all of the other banks. When the new Market Value is established through a public auction then … (6 comments)
bailout crisis: Here We Go Again With the Second Tranche of TARP Funding
- 02/08/09 04:36 AM
With the first tranche of TARP funds former Treasury Secretary Paulson paid 78 biilion dollars more for banks stocks than they were worth and no funds were directed toward solving the housing & foreclosure crisis. We the public immediately lost 78 billion dollars. With the second traunch of TARP fund Treasury Secretary Geithner wants to provide incentives to investors (aka banks) in the form of commitments to absord some of the losses from any assets they purchase should the value of these assets continue to decline. So banks could by each others worst assets at what ever price they negotiate. Then they get to keep any … (7 comments)
The assumptions for the baseline scenario and the adverse scenario used to develop the so-called ‘Stress Tests' are overly optimistic and fall far short of any 'worst case' scenario to the point that some may charge that they are more like a ‘Best Case' scenario and a ‘Mild Discomfort' scenario.
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