It is the end of the semester at the Lake Wobegon School for International Finance:
After a two-month wait, the nation’s 19 largest banks will start learning on Friday how they fared in important federal examinations — and which among them will need another bailout from the government or private investors.
While many of the banks reported surprisingly strong first-quarter earnings, they are by no means out of the woods. A number of them are likely to need more capital to weather a prolonged recession, and the losses that might accompany it.
The Federal Reserve intends to disclose, in general terms, how it conducted the stress tests on Friday afternoon, but the government will not publicly reveal the results until May 4. In between, Wall Street is bracing for a possible roller-coaster ride in financial stocks as investors scramble to do their own assessment of the financial industry’s strongest and the weakest players.
This will be fun. I can’t wait to learn how everyone is exceptional, but some still need trillions.
TenguPhule
On the other hand, it’s nice to see banks being charged 60% annual interest for a change.
Dennis-SGMM
No matter what the results of the stress tests, this calls for another round of bonuses!
Cris
We. Do. Not. Torture.
Zifnab
@Cris: You just need to start on the premise that the fundamentals of the economy are strong.
Or, at least, they were strong until Barack Obama got elected.
cjd
Where all the CEOs are good looking, and the banks above average. Or maybe the banks want all the CEOs to at least appear above average. Which would make the banks good looking..
Ninerdave
…that’s because they were playing games with their books.
Michael
Compare and contrast:
JP Morgan douchenozzle Jamie Dimon-
http://www.dailykos.com/story/2009/4/24/723724/-Morgan-Chase-CEO-Jamie-DimonDont-Change-Anything
with Indra Nooyi of Pepsi:
http://money.cnn.com/2009/04/19/news/companies/nooyi.fortune/index.htm?postversion=2009042211
The Raven
All the banks are strong, all the CEOs are good-looking, and all the investments are above average.
Krawk!
TenguPhule
These pills will burn off all that excess fat, this cream will make your penis grow and we can clear your bad credit history if you pay us lots of money.
Brian J
As I have stated before, part of me thinks that the Obama administration is doing what it can to fast track nationalization. This sounds counter-intuitive, but if you think, as I do, that it’d be a pretty big fight with some even if it was the best option, it makes sense. If they can ram through the more politically feasible options even if they know they aren’t going to work, it becomes clear that nationalization is really all that’s left. If the stress tests really are as worthless as some think they might be, then perhaps they were really meant to be one more nail in the coffin.
I’d love to hear from others who may know more than me why this is or could be wrong. It doesn’t seem like the most obvious suggestion, but Obama is known for thinking long.
liberal
@Brian J:
It could be right, but I give it a low likelihood of working out that way.
Why? Because the history of both the Bush and Obama admins is to stuff free money into the pockets of the banks. And the history of people giving Obama advice on the topic indicates likewise.
DPirate
Crazy how this is all based on the assumption that these banks haven’t any idea what shape they are in