3/19/09

PD

 

 


The examinations and stress tests are shams


 


Former Bank Regulator William Black


The Big Lie


Stress Test Optimism Just Wall Street Propaganda


Yahoo Finance, May 08, 2009


 


Why would who apply lipstick to drive equity markets higher


to improve what could be insolvent capital structures


of taxpayer bailed out enterprises


by duping investors to invest more than $50 billion


to support current stakeholders


at the expense of other people’s grandchildren?


 


How could some describe efforts to increase confidence


 


to create a window to raise capital


through secondary common stock offerings


and new debt issuance?


 


"Pump and dump" is a form of…stock fraud


that involves artificially inflating the price of a…stock


through false and misleading positive statements


in order to sell…at a higher price


 


Once the operators of the scheme "dump" their overvalued shares


the price falls and investors lose their money


 


Pump and dump


Wikipedia


 


The exams are too easy; the banks get to take them home with cheat sheets


and if they don’t like their final grade, they can appeal for a better one


 


…Our analysis directly contradicts the overall conclusion


…that most bank holding companies are well capitalized


 


Martin D Weiss, Ph D


Former president of a national rating agency


National Press Club, May 5, 2009


 


The Federal Reserve…significantly scaled back the size


 of the capital hole facing some of the nation's biggest banks


 following days of intense bargaining over the stringency of the stress tests


 


…the Fed used a different measurement of bank-capital


… than analysts and investors had been expecting


 resulting in much smaller capital deficits


 


David Enrich, Dan Fitzpatrick and Marshall Eckblad


Banks Won Concessions on Tests


Fed Cut Billions Off Some Initial Capital-Shortfall Estimates


Wall Street Journal, May 9, 2009


 


If Rating Agency stress tests considered toxic waste AAA


when AIG’s Joseph Cassano stated


 


It is hard for us, without being flippant


to even see a scenario within any kind of realm of reason


that would see us losing one dollar in any of those [CDS] transactions


 


in August 2007


and Treasury Secretary Paulson


testified that Fannie Mae and Freddie Mac were


 


adequately capitalized


and


even in [Freddie's] most severe stress tests


[show] losses ... less than $5 billion


 


in July 2008


 


while IndyMac’s losses on more than $200 billion of "liar's loans"


were about 160 times greater than stress tested


 


A "false representation" can take many forms, such as


 


A false statement of fact, known to be false at the time it was made


 


A statement of fact with no reasonable basis to make that statement


 


A promise of future performance made with an intent


at the time the promise was made, not to perform as promised


 


A statement of opinion based on a false statement of fact


 


A statement of opinion that the maker knows to be false


or an expression of opinion that is false made by one claiming or implying


to have special knowledge of the subject matter of the opinion


 


 


"Special knowledge" in this case means knowledge or information


superior to that possessed by the other party


and to which the other party did not have equal access


 


Fraud


Wikipedia

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