The relatively modest size of the hole discovered by regulators carrying out the tests, which were based on an “adverse” economic scenario, led to both applause from investors who believe the worst is over and skepticism among those who think the examination wasn’t rigorous enough.
“The fears of nationalization or of failure have more or less disappeared, and now what we’re getting is details of how banks are going to fill in their capital deficiencies,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.
The doubters believe the banks will need much more of a capital cushion than stipulated by the regulators, as the U.S. jobless rate soars and the housing market and economy takes time to pull out of a funk, driving up credit losses.
“I’m a skeptic. I don’t see this as a genuine audit. They have been playing the marketing game strongly lately,” said Robert Andres, president of Andres Capital Management in Philadelphia.
It amazes me that all of this “gosh, do we need to give the banks billions more to sock away just in case they need it ” is treated as just another little ho-hum financial decision to make rather than what it is – a continuing onslaught on the liberty of the American people who, by the way, will have to pay for this monstrous theft and loss of freedom for generations to come. Where is the outrage that this is happening? Where is the demand that it stop? Where are the lovers of freedom and why aren’t they speaking up?
#1 you make sense. I still throw out a question that no ne seems to know the answer to. How many new banks appeared during this crisis looking for the big Billion handouts. Thousands of banks went under during the great Depressoin. I don’t think the surface at this date is even scratched yet. Comments any one??