Diary

I Know I'm No Economist

But, would someone please explain to me how the banks could be any worse off from releasing the stress tests?

The disarray highlights what threatens to be a lose-lose situation for Treasury Secretary Timothy Geithner: If all the banks pass, the tests’ credibility will be questioned, and if some banks get failing grades and are forced to accept more government capital and oversight, they may be punished by investors and customers.

It seems to me, the money quote is in that paragraph: “If all the banks pass…” I don’t know if it’s because of the test’s credibility or the credibility of the Secretary is at stake. There are other quotes I could pull out about banks being weakened, possibly more economic downturn, and so on.

Since September ’08 can the banks look any weaker? Every week there is one or two banks seized by the Feds. They don’t get much billing but even a simple following of Drudge will give you that information.

There’s no doubt we’re headed for more economic downturn, when companies continually turn to the government for bailouts and the government willingly forks over the taxpayers’ money to prop up them up while not giving an inch to the issues that made them failing in the first place.

So, all you economists out there on Redstate, can you explain it for the uneducated masses, like me?