The banks are reporting decent numbers, and the bears are parsing the books.
Wells Fargo reported good numbers because they had the Wachovia $7.5 billion Wachovia "cookie-jar" that they could dip into.
Citigroup took a gain on their $2.5 billion gain on their debt, which had dropped in price, so conceivable, they could buy it back at a discount. Remember how Citigroup fought for Wachovia? They wanted the bigger cookie jar!
But none of this matters. We are graded on stock prices, and now the bears can't press prices down with this information.
It's just like the bank stress test.
Now who was the architect of the stress test? It was Geithner. Do there bears really think that this is a real stress test? Remember this gem?
Geithner has said he crafted the stress test program in an effort to provide more transparency about the health of banks’ balance sheets. He and Fed Chairman Ben S. Bernanke have also noted that most of the 19 banks are currently well capitalized and that not all of them would need new capital.
So that is what you are guaranteed not to get . Transparency! Why would anyone believe Geithner? The only think you'll get from the stress test is a Styx "grand illusion!"
The only stress that will come from this test, will be the bears shorts. And the only institution that will have any stress, will of course be, Washington's whipping boys from Detroit. So they'll say something about GMAC just so the public will think the test was real!
Why do you think Nourel Roubini is foaming at the mouth about the test?
The stress test results are meaningless as actual data are already running worse than the worst case scenario.”
Roubini, however, comes to his inescapable conclusion by extrapolating current trends into the future, and then saying that the assumptions that the stress test were made were invalid. Look at unemployment. The stress test says that unemployment, (as the Government counts it) will be 10.4% in 2010. That will be a hard number to hit, because soon we'll have the unemployed falling off their benefits, and then Uncle Sam won't count them in the official figures, even though they are unemployed.
Maybe they all will become day-traders!
The bank stress test will show the proper pulse, even if they have to get Larry David's nurse to help!
"We made the grade and we still wonder who we are"