Stressing Out On The Stress Test

Treasury Secretary Geithner cryptically proposed that new Federal aid to the big banks would be preceded by a "stress test".  But what did he mean?  Who knows!  Let's cite Nobel Laureate Paul Krugman as our Exemplar of Uncertainty:

3. Stress test: everything depends on how this is actually implemented. What happens if, or more likely when, a major money center bank is stress-tested and found to have negative net worth? One possibility is that the auditors are told to come up with a different answer; that’s a big concern. The other is that the bank is effectively nationalized; as I read the language that could be achieved as part of the public capital injection.

So what is the plan? I really don’t know, at least based on what we’ve seen today.

Not helpful! 

Geithner was asked whether any banks were "too big to fail" at a Senate hearing yesterday and specifically declined to use that language, referring instead to a commitment to contain "systemic damage".  Yike!

That is a heck of a presentation - the biggest banks will be tested somewhere down the road, some may fail the test, and the consequences are unclear.  One marvels that the Dow fell only 380 points.

But the WSJ lights a candle of hope in today's reporting:

Government officials are saying the tests, in which they try and gauge a bank's condition under the worst case scenario in two years, won't be used to separate banks that survive from those that are liquidated.

"I don't think there is a pass-fail on the stress test," a government official said. "This stress test is not a test for who is insolvent or not."

Rather, government officials say the tests will be used to gauge how much extra capital big banks might need as a buffer to continue lending through the economic downturn. The Treasury Department said Tuesday that it would invest an additional $100 billion and $200 billion into banks on top of the $250 billion it has already said it would put in.

Geithner's latest looks like another triumph of ad hocery.

[END OF THREAD]

Comments

[Ralph L]

Ask him what he thinks of the Renaissance popes. At least one was a murderer, with bastards.

[Jane]

Well see Ralph, since I know nothing about Renaissance popes that wouldn't be helpful. Plus I really don't want to attack his profession, I'd just like to open his eyes to politics. Hell Dick has practically turned republican at this point.

[Thomas Collins]

Don't worry, Jane. Addressing your guest as Father Preble does not sign you up to his theology.

When my mother, an Armenian Apostolic (one of a small group of Churches, generally referred to as the Oriental Orthodox Churches, that didn't accept the Confession of Chalcedon as to the human and divine nature of Christ), married my father, a Roman Catholic, things became dicey, so they eloped to Manhattan and were married in a Protestant Church (I believe the Oriental Orthodox and the Roman Catholic/Orthodox Churches have subsequently worked out, or papered over, their differences amicably). You don't have to marry Father Preble, you just have to interview him, so relax! :-))

[Rick Ballard]

Jane,

I think I would start here with a focus on Archbishop Burke's admonition that "The person who persists publicly in grave sin is to be denied Holy Communion, and it [Canon Law] doesn't say that the bishop shall decide this. It's an absolute." and its application to Kerry, Pelosi and Biden.

Maybe slide over to the statement of President of the United States Conference of Catholic Bishops, issued a week after the election and ask the good father what he is doing to bring the matter to the attention of Kerry, Biden, Pelosi and Obama.

I'm not a Catholic and I'm sure others here would have better suggestions.

[Pagar]

Obama shifts FBI from counterterror

There is a reason for this shift. Counterterror is unlikely to snare many Republicans, but one can manufacture all kinds of things out of fraud cases.

Ex-lawmaker's records subpoenaed in firings probe

WASHINGTON (AP) - A federal grand jury has subpoenaed records of former Sen. Pete Domenici, and prosecutors are preparing to interview an ex-aide to former White House political adviser Karl Rove in an investigation of politically tinged firings of U.S. attorneys.

The moves are the clearest sign yet that the criminal inquiry, which began in September, is likely to continue for many months.

Career federal prosecutor Nora R. Dannehy is looking into whether former Attorney General Alberto Gonzales, other Bush administration officials or Republicans in Congress should face criminal charges in the dismissals.

I would not be a bit surprised to find out that a whole lot of Republicans will be investigated over the next several years, nor would I be surprised if there were some promises made to Republicans who voted in favor of the stimulus bill.

[clarice]

Ask him about liberation theology which began among young priests in central America and formed the basis for Rev Wright's garbage (well that and Black Moslem tripe).

[RichatUF]

Ireland's banks failed the stress test. Not sure what US law had to do with the collapsing.

How again was the euro suppose to lead the way as the world's reserve currency?

So the Europeans bankers and elected politicians are bigger liars than the crooks running US banks and our elected politiciansidiot crooks, and the Europeans also have a bigger problem with "toxic assets". However, Geithner wants them to be "partners" in any sort of regulatory framework and everyone else is focusing on the US as the only source of the problem.

I getting that sinking feeling.

[narciso]

Yes, I agree that is a poor tack to follow, one of the things I dislike aboutconversing with my former friend from Philly is his strong distaste for the Catholic Church, references the Inquisition, the Vatican properties, and most recently the sexual abuse accusations in the various diocese.It's a conversation almost as fruitful as those dialogues you have with Dick. Well maybe a little less fruitful by the sound of it. He always blames my beliefs on my Jesuit High school school education, but that was really almost besides the point, just like most of the knowledge I show off here, came from independent research.

Terry Moran, he really does earn the title of 'credentialed moron' doesn't he. They get stupider with every broadcast, than they plumb greater depth. Of course, back in the day, Hewitt would invite him on, and
filete him, with some lemon juice, and he would come off as like the Black Knight from the Monty Python sketch. You'll be displeased to know that he supported Deval Patrick, and even contributed to him, but he lost touch with reality a while ago.

[BobS]

i'm late to the debate here in jom, but i want to say how amazed i am at msm questioning of obama's economic nonsence

[BobS]

fast talkers - on any issue - turn me off...sorry to digress, but fox has them out there tonight....do the uninformed find them engaging in any way? i'm really curious

[Jane]

Rick,

He's not Catholic either - he's a Romanian priest who is scottish I think. He got disenchanted when he was at the Catholic seminary because of the higher ups were handling the pedophile problem.

I'm copying and pasting all your suggestions.

[PeterUK]

RichatUF,

And they are going for it. like lemmings for a cliff.

[Ann]

Daddy,

The Jom ladies are at Jake Tapper's blog: http://blogs.abcnews.com/politicalpunch/

One of the threads is this:
JOM Ladies Tell Tapper a Thing or Two

Keep it up guys, I have thought for sometime that we need to spend more time educating the WH reporters that show signs of intelligence and political curiousity. Chuck Todd is a goner, but Jake Tapper and Major Garrett have potential.

[Pal2Pal (Sara)]

I wonder who wants a priest who votes for someone because he thinks they're cool? Very uncool, if you ask me, which, of course, nobody did.

[PD]

What does Obama do with it when he isn't chewing,does he stick on Joe Biden's forehead?

He uses it to hold open Pelosi's eyelids.

[Extraneus]

You are absolutely masterful over there.

Wouldn't that be misstressful?

Btw, did anyone hear Rush today? He was on a serious roll about how Republicans will be taking revenge once they utlimately and inevitably regain control, and are able to use the enhanced power of government the Democrats are accumulating now. Kind of a Rahm steak-knife riff. Good radio if anyone wants to check his site, it's probably there.

[Annoying Old Guy]

Shouldn't we call the JOM ladies "JOMazons?"

[BobS]

i feel cheated.....the jom girls have been cross-posting....and i am jealous

[daddy]

Thank you Ann.

[Jane]

I'm jealous that I'm not in on it.

[Pofarmer]

What is up with these people and the AG firings? The administration is out of office. How is there any possibility at all of there being any there, there????

I just don't see it. 8 years of Bush, and that's the best they got? He fired some people?

[Pofarmer]

I getting that sinking feeling.

You're slow to the party, I've been having it for a while, probably since the Republican primairies, and definately since the financial meltdown started.

[Thomas Collins]

Annoying Old Guy queried:

Shouldn't we call the JOM ladies "JOMazons?"

Actually, I believe the appropriate form of address is JOMAGODDESS! :-))

[cathyf]

Ask him what he thinks of the Renaissance popes. At least one was a murderer, with bastards.

Nah, forget Renaissance popes. Google "Cadaver Synod".

It gives hope that (after a thousand years or so) people might be able to laugh at the porkulus bill.

[BobS]

i like that one better, tc

[BobS]

there was only s0 much time before the dem-lib con perpetuated by the media and its party of choice would not be able to sustain such a false reality....even its enablers at ap are turning as evidenced by the question obama got from the ap reporter right out of the chute

[centralcal]

Gosh, I miss the good old days when I could glide from thread to thread, or specific commenter to specific commenter . . . those days are gone!. Time and technology march on, but goes strangely backward here at JOM in TypePad hell.

Anyway, I think our JOMAGODDESSES have elevated the comments at Tapper's place.

[JM Hanes]

Thanks for the heads up MayBee. Y'all inspired me to jump into the pool too. So far, my post still seems to be there, but I don't know how long they take between deletions. Perhaps the "I love ya Jake, but..." formulation may prove to be a handy preventative.

Ann, I've been thinking the same thing. Most of the time it takes considerable scrounging around to find a reporters e-mail address, though, and elsewhere when they take comments online, they seem to get such a mountain of trash, I doubt they ever bother to read them.

[Ann]

Jane, you are educating Dick and his audience every Tuesday with a wonderful voice, a great temperament, an infectious laugh and more brains than all of them put together. Plus you have the added burden of getting your point across with someone that doesn't want you to sound smarter than him.

I haven't gotten through your show on Feb. 10, but one thing stands out. Dick, like the rest of the republic is not curious. He absorbs the news fed to him and believes it. When you question him about the trillion dollar stimulus, he says " No I haven't seen any of it". He expects FOX to ask the tough questions but doesn't watch it. He really is a populist and lazy. You owned the last show.

And I am so proud that you have the guts to keep going back and trying to argue the Iraq war, General Petraeus, the Rangle Rule, FEMA, Republicans give more to charity, Gitmo, etc.

Dick will never let you host that show alone because he would be out of a job. :)

[Ann]

JMH, How do we get Mark Steyn in the WH pool of reporters? Wouldn't you love to see him with Mr. Fibbs?

I am even discouraged with NRO lately, they seem to think that conservative movies are the topic of the day, not the wholesale stealing of a nation by one political party.

[narciso]

Agreed, Ann, he doesn't make me want to screens anymore, but his willingness to follow the MSM media template is maddening; but he does seem to be coming around,slowly,
I'd like to have seen his face, when you told him the census was going to the White House from Commerce, it was probably
priceless, a Youtube moment. I must admit I'm looking forward to these little
dialogues.I must admit the Sarah hook got me to listen this time; he's getting it, specially how he challenges the insiders.

[narciso]

Listening to the KTUU feed, about her press conference, today; I can quit at any time,
addressing what parts of the stimulus she'll
accept, making sure we have no unfounded mandates, in the future, the crisis at Emmoniak, that CNN tried to make so much of. She clarifies the whole Palis Colburg(attorney general) matter, the pipeline act,
puts enphasis on the letter to Obama on energy. She clearly shows a stronger command of the facts than Joe Biden, who imagines his findings, but with authority.
When she paces herself, the sing songiness of her cadences, fades away. It's probably one of the harder hurdles for her to work with; for it comes back when she shows enthusiasm. It's a shame that the nature of local politics, makes it almost impossible for her to venture forth in the near future,
such as the CPAC event

[narciso]

punch the screens;sic

[Holly]

Jane,

The priest is not Catholic? But he used to be a Catholic. So what is he now?

[Thomas Collins]

I am the Pastor of St. Michael's Orthodox Christian Church a parish of the Romanian Orthodox Archdiocese. I am also the host of the nationaly syndicated radio program Shepherd of Souls.

The above is from his blog, Holly. You can view the blog by clicking the highlighted "Jane" in one of Jane's above posts.

[Holly]

I'm sure I missed something, so assuming the priest IS Catholic, I can offer a suggestion. Ask him about Obama's threat to Catholic hospitals. And the Bishops' response. For the last three months at my church, the deacons have been handing out mailers and pens as folks walk out of mass, asking for signatures. Every week. Every mass. I was visiting my son in Alexandria,VA,during the week of inauguration, and both masses (Sunday before and after) addressed Obama's pernicious intentions wrt FOCA and they passed out mailers and pens DURING mass. The message was very clear. Catholic hospitals will shut down if Obama pushes FOCA.

I haven't kept up with this topic. But I do know that Catholics are very upset with Obama. I get emails from Notre Dame about the subject, too.

[Holly]

Thanks, TC. Now it makes sense. BTW, I didn't see your post until after I posted.

Also, Jane, I forgot to refer you to an article on Slate by Melinda Henneberger which I LUNed above will do so again here.

LUN

[daddy]

Narciso,

Glad you heard the Sarah feed. I caught parts on 2 talk stations, frequently interrupted by host's comments. Amazing that you hear an intelligent women making reasonable statements, but that Mister Conservative Dan Fagan hears nothing but dissembling and cowardly refusal to answer questions. Gawd, I love the media---not.

[kim]

Thanks for the link, Holly. This has been running entirely under my radar. Interesting thought that the most pro-life candidate we may have in our past and near future is a woman.

Years ago I wondered if the Catholics ought not to be in the health care business. It has come a long way from a strictly merciful endeavour.
================================

[Jane]

Geez Ann, you are so sweet. I think it's hard to listen to a podcast, I'm so flattered that people do.

Holly I've put that in my 3-3-09 radio folder. Thank you as well.

This place really is a joy to wake up to.

[Cecil Turner]

This is the understatement of the week:

In rolling out his overhaul of the financial rescue yesterday, Treasury Secretary Timothy F. Geithner lambasted the Bush administration's response to the crisis over the past year.

What's hilarious about this is the reflexive willingness to pretend the first $700B bailout (actually $350B) was an all-Republican affair, or that the new plan is any different. In fact, the bailout was an entirely congressional show, dominated by the Democrats, and they could've had anything--amount, transparency, strings, etc.--that they desired. What you got is what they wrote . . . and claiming they couldn't foresee what it would be spent on is just as convincing as the claims they were led into voting for the war by Rovian mind-melds.

The only change in the last month is that Democrats are using the crisis to reward their favored constituents in an unprecedented pile of pork sausage. And whatever one thinks of the first $350B, the widely-predicted lockup of credit markets (to the point of seized-up payrolls and bare supermarket shelves) did not happen. The logic behind throwing additional trillions of dollars (several times as much as the first tranche) is far less compelling: stimulus to jump start an economy in the face of their own studies showing it'll actually be counterproductive. But the real goal appears to be obfuscation.

The Democrats are doomed on this one by their own success. Having won election by selling the public on a bill of goods (that Republican greed was responsible for the credit crisis), they are unable to admit the actual root causes of the problem. And rather than restore rational accounting and oversight to the government-sponsored loan guarantors they created--necessarily tightening credit to low-income high-risk borrowers--they plan on doubling down on bad bets, trying to find new and interesting ways to keep people in houses they can't afford. It can't work, and sooner or later they'll run out of Republicans to blame it on.

[narciso]

Well I got the feed straight from KTUU, which all the mediation from outside sources, thank the folks at CfP, for wrangling it. There's also Youtube segments,
as I understand it, if I pull one down, and link it; I would. Fagan, I've developed a real Couric/Gibson hatred for; partially because of Kaylee Johnson & Bill Dyer's description of him, but also for his subsequent dishonesty in the campaign, on the pipeline deal, and the apprenticeship for Levi; I really would be tempted be throw something at my monitor if I listened to Talk Radio Station 1 & 2. Jane you really did mislead, his characterization of Sarah, I expected a much harsher tone, yet
he's gaining a fair amount of respect for her, he did have to gripe about the form letter response from SarahPac.

Kim, it's somewhat fitting that the most pro life candidate and the most dynamic one would be a woman. It happened in Britain first with Thatcher, because sadly the Tory
well had run dry with Heath, who I've discovered now was not only an Arabist but
was also gay; maybe I read that last part wrong. But it was a close run thing,
ironically accented by the precedent of the Celtic warrior queen Boadicea, Queen Elizabeth and Victoria. I thought that the Thatcher comparisons, were off until I came
across that blurb in a Tim Blair comment thread. We at CfP, speculated last night, about the measures taken to have Jindal give the response to the State of the Union, and Lisa Murkowski to give the Congressional Response? was that part of
a flanking maneuver, or not. We decided it was the latter. She is the driver of a mass movement, no guarantee that it will succeed
but frankly for the good of the nation, it must.

[Pagar]

Good Morning,
Jane, I don't see it mentioned anywhere but Obama's votes on the Born Alive bill in the Ill legislature might be something to bring up with the priest.

I just don't see how anyone votes for a Democrat. They are the party of premeditated death for Americans of all ages IMO.

As for the Tapper piece comments. In my opinion, the entire Columbia fiasco is another attempt by the Democrats to provide aid to Castro and Chavez in the effort to spread communism throughout South and Central America.

[kim]

Cecil, with our media they will never run out of Republicans to blame it on as long as one is left alive. They are busily securing the meme as we speak and it will be trotted out regularly. Sure, not everyone will believe it but with acorns growing into oaks, and Burge's imaginary people srouting in every district the war is over. I suspect it's going to take very hard times to break this evil spell.
==========================================

[narciso]

How does one do Urls from a Youtube link, I'm sending the main page which has the three segments from the press availability, but I'd like to know how to break them up for the future

[MayBee]

Jane- My two cents is to stay away from religion with the priest. People already think Republicans are too much into religion, and you have so much insight to offer people in other areas.

[Holly]

MayBee, I agree. This guy is like our POTUS, wants to play in the shallow end. Jane would probably have more fun drowning him in areas she likes.

But I think she could talk about the FOCA issue without getting into the specifics of Catholic faith. Obama is having to deal with real life here -- make a decision and deal with the consequences. Just how cool will it be if Catholics mean what they say? Not as cool as Obama, I'm guessing.