Stress test results leaked

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SkylightMT's picture
SkylightMT
Status: Silver Member (Offline)
Joined: Sep 30 2008
Posts: 125
Stress test results leaked

Well, its Turner, so take it with a grain of salt (a HUGE grain of salt):

The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!

SkylightMT's picture
SkylightMT
Status: Silver Member (Offline)
Joined: Sep 30 2008
Posts: 125
Re: Stress test results leaked

omg the editing. Let me try again.

 

The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
 

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.
 

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.
 

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
 

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
 

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
 

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!
 

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
 

http://turnerradionetwork.blogspot.com/2009/04/leaked-bank-stress-test-reults.html

 

JAG's picture
JAG
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Posts: 2492
Re: Stress test results leaked

 Great info Skylight! Thanks

Nichoman's picture
Nichoman
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Joined: Nov 1 2008
Posts: 422
Re: Stress test results leaked

Thanks also SkylightMT.for posting.

Interesting is if this is for the mean or worst case scenarios.  Even if worst case...economic data is coming in slightly worse...so if true...could be more dire.  Uuugh.

I'll post a prescient warning of this similar financial insolvency reality by Dr Martin Weiss from yesterday.  It also quotes Meridith Whitney saying the same thing.

http://www.moneyandmarkets.com/big-bank-profits-are-bogus-massive-public-deception-33228

Questions: 

1.)  Isn't the potential magnitude and scope of impacts of these as much...or more than last Sept/Oct spectacle?

2.)  How can the economy (i.e. markets, gov't, etc). recover?

3.)  Impending collapse(s) at multiple levels sooner versus later?

These findings seem quite plausible and reasonable.   So recent financial profits are fake...using taxpayer money...more loss of credibility. Of course...will be no reaction of this if true by taxpayers.

Reminds me of the song by Sonny and Cher from the 1960s with the lyrics "...and the beat goes on...and the beat goes on and on and on and on...etc)". 

 

Nichoman

 

Ragnar_Danneskjold's picture
Ragnar_Danneskjold
Status: Silver Member (Offline)
Joined: Feb 23 2009
Posts: 100
Re: Stress test results leaked

Just playing devil's advocate here, but if this report is true, why was there any concern about bank's releasing their stress test results along with earnings?  Seems like none of them has anything to brag about.  FWIW, I think the blog post is probably accurate, but we'll never know the true results. 

Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Re: Stress test results leaked

Mark Denninger is now referring to this information.

http://market-ticker.denninger.net/archives/972-Treasury-Caught-Lying-Again.html

CAUTION: Typical Denninger tone.

 

Nichoman

cat233's picture
cat233
Status: Platinum Member (Offline)
Joined: Aug 20 2008
Posts: 575
Re: Stress test results leaked
Ragnar_Danneskjold wrote:

Just playing devil's advocate here, but if this report is true, why was there any concern about bank's releasing their stress test results along with earnings?  Seems like none of them has anything to brag about.  FWIW, I think the blog post is probably accurate, but we'll never know the true results. 

Chris had this to say about banks and earnings last week.

www.PeakProsperity.com/forum/jp-morgan-chase-beats-earnings-maintainins-efforts-help-economy-recover/16542#comment-30327

Cat

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 548
Cut the Crap People: This Site Deserves Better

People:

One of the great things about Chris Martenson is that he prefers data over rumor, information over innuendo, and facts over speculation.  In fact, his most recent report ("Survey Says") explains the importance of trying to discern between information likely to be real and information likely to be fake or manipulated.

I think we should try to emulate Chris's example and not post pure bs or things that have a high likelihood of being pure bs.  Let's vet what we post before we post it.  This site should be a haven for people who are trying to cut through the lies and disinformation peddled by the MSM.  The fact of the matter is that it is often very difficult and time consuming to figure out what is true and what is false so we need to rely on each other to keep this site genuine.

This thread is a perfect example.  Are we to believe that Hal Turner, a white supremacist anti-semite knucklehead, somehow obtained "leaked" information about the stress tests that shows what he says it shows?  Maybe.  But the source is incredibly dubious, unsupported, not confirmed by data or any other source, and highly suspect.  I commend the original poster for warning that it should be taken with "a HUGE grain of salt" but the fact is that the grain is so HUGE that it really doesn't amount to anything remotely credible at this point in time.

My opinion of Karl Denninger has taken a bit of a dive now that I see he is referring to this information on his blog.  He notes that Treasury is denying that the stress tests are complete yet, and concludes that this must be a lie because, after all, the Treasury previously told the banks to keep quiet about the stress tests. He writes:  "How can you be ordered not to release something you don't have?"  Wow, Karl, great sleuthing!  Of course, it proves nothing whatsoever since the Treasury probably just told the banks, "Don't release the results of the stress tests when they come out."

I give Hal Turner's "leak" about a 1% chance of being true; not nearly enough to elevate it to the level of a thread and get everyone excited and waste everyone's time with.  When the stress tests come out we can look to Chris and others to get down to brass tacks and tell us what they think of how the tests were conducted, what the data really means, how it is being spun, whether or not we are being mislead, and what we should make of it.

I really don't mean any offense to the original poster, btw, because his disclaimer was quite clear.  I just think we should all strive to post real information, not information we suspect or think is highly likely to be junk.

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Re: Stress test results leaked

Lemon -

I am still a bit uncertain as to how you really feel. 

But I'm certain I agree with you.

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