Stress test engineered rally

Discussion in 'Economics' started by detective, May 6, 2009.

  1. Did people actually expect Tiny Tim Geithner to actually have any backbone and put down the rule of law and get these backs on the road to real solvency? That was the fear on Wall Street and obviously unfounded.

    Of course the Feds will softball the stress test and mete out tiny amounts of punishment to the most egregious offenders of undercapitalized banking.

    The stress test tells the market nothing about the actual solvency of these banks.
    The whole exercise is a big joke, a Ponzi scheme designed to get suckers on the sidelines to bid up the bank stocks so they can ram down more dilution down the throats of suckers afraid of missing the rally.

    We are near the apex of the relief rally that we are not entering a depression. The financials are a political tool and will be propped up with the most absurb actions from the Fed and Treasury because they have been bought and paid for many times over. The fuel used to fund these activities is money printing, the Fed is doing its own grand experiment of diluting the dollar to re-capitalize America. It works in the short term until people catch on and see inflation in everything they need.

    Until the outrage really sets in, the banks will suck the life out of the US economy to keep itself alive, with the Fed and Treasury as accomplices in the theft of America.
  2. I don't know. Seems like an attempt to bid up the banking sector equities in an attempt to dilute by share issuance to private players...

    How much do you want to be that this will be to the average 401k investor in mutual funds? Calls will be made that it is 'un-american' not to hold a certain percentage of financial instruments in whatever capitalization fund... The mutual funds will comply and buy up the issuance, thereby recapitalizing the banks. Thereafter, well, whatever happens happens.

    Actually, if it works and things stabilize, might not be such a bad deal for all parties. OTOH, no guarantees that it will work, particularly giving lagging unemployment trends.

    But, for what its worth, thanks for the uptrend.
  3. NYC212


    my question is. how the hell let them out a day early?

    someone at the fed leaked out info
  4. all done on purpose: it is safer to release data in chunks to avoid the possibility of a large negative market reaction.