One moment it’s all pie in the sky “green shoots” and the next it is we must act now.  What is the rush to get these things done?

Geithner, in testimony to the Senate Banking Committee, said the administration considered a full range of options and “decided that now is the time to pursue the essential reforms, those that address the core causes of the current crisis; and that will help to prevent or contain future crises.”

via Geithner Urges US Lawmakers To Move Quickly on Reforms – Politics and Government * US * News * Story – CNBC.com.

Not even acknowledging the very serious intellectual reasons for not doing this because I’ve discussed it in the past.  It seems most people are forgetting the ancient fable of the sky is falling.  When ever anybody says DO IT NOW we should take a minute to think.  Especially if those people are politicians! 

Geithner (Bush and Paulson did the same) remind me of one of those sales people trying to get you to buy it now to get 50% off, we’ll throw in a free widget worth $75 dollars, and pay your shipping charges if you buy it in the next 5 minutes!  It only costs several trillion buy now before it’s to late!

As we noted back on April 24th, the Stress Tests were not very stressful; That pesepctive was a decidely outlier viewpoint back then. Now, it has become more mainstream, as even a WSJ headline this morning declared: U.S. Banks’ Not-So-Stressful Test.

Consider this simple fact: Treasury and the Fed want these banks to have Tier 1 capital (common and preferred stock) equal to 4% of risk-weighted assets. In other words, 25-to-1 leverage as safe for the future.

Hence, it is not a big stretch to conclude that the entire stress test exercise is a near charade, with foregone conclusions of deleveraging banks to still wildly over-extended positions.

Recall that before the 2004 SEC Bear Stearns exemption for the 5 biggest investment banks, net cap rules limited leverage to 12-to-1 for investment banks.

Is 25-to-1 leverage appropriate for depository banks? Well, maybe before the repeal of Glass Steagal — but with today’s toxic asset laden banks, 25-to-1 seems awfully friendly.

Why the generosity? According to Bloomberg, its to allow the banks to “grow” their way out of the mess through earnings. Instead of being an honest broker of the banks conditions, the Treasury Department is now a shareholder and cheerleader for bank profitability:

“Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.

via Stress Test: 25-to-1 Leverage as a Healthy Bank Target? | The Big Picture.

With a good dose of stupidity is the answer.

WASHINGTON (Reuters) – No one at the Federal Reserve advised Bank of America chief Kenneth Lewis on any disclosure issues, Fed spokeswoman Michelle Smith said on Thursday.

“No one at the Federal Reserve advised Ken Lewis or Bank of America on any questions of disclosure,” Smith said in an e-mail responding to a question. “It has long been the Federal Reserve’s view that questions of this nature are best addressed by individual institutions and their legal counsel, as they are in a position to understand clearly their obligations and responsibilities.”

New York Attorney General Andrew Cuomo said on Thursday that Lewis was pressured by senior federal officials Henry Paulson and Ben Bernanke to accept a merger with troubled Merrill Lynch & Co or lose his job.

The banks are of course in the pockets of the Fed and Treasury.  They are nationalized.   They didn’t want the money and were forced to take it.  They wanted to pay it back and aren’t allowed.  CEO’s can be fired at will (See AIG and GM). 

The government now runs our banks, car manufacturing industry, health care, and energy industries.  We live in a fascist state.  This is fact.  The people being oppressed are the successfully rich.  Who is next?

I want no part in fascism. 

You may say this was under Bush’s watch which is true but to think it’s not being ramped up under Obama’s is naive and stupid.  Geithner and Obama are just if not more guilty according to CBS.

“When asked if he would leave open the option to pressure a bank CEO to resign, Geithner replied: “Of course.”

First, they come after somebody you don’t know.  Maybe some fat cat in Wall Street.  Then they oust a manufacturing CEO.  Then they tell the banks what rates they can lend at and to whom they should lend.  Then they come after your neighbor.  Who is next?

People – It’s important that we let the world know what is happening.  Fascism is not a road we want to head down.  Obama may be a bigot towards the successful and rich, but it doesn’t mean we have to buy into the bigotry.  It doesn’t mean we shouldn’t oppose a fascist regime.  Whether elected by the majority or not.  Just because the majority says fascism and bigotry is ok doesn’t mean we can stand against them. 

It’s only going to get harder for us from here on out.  Even if we are able to change the power in D.C. in 2010 and 2012 power corrupts and D.C. now has almost absolute power. 

“Uncertainty about the value of legacy assets is constraining the ability of financial institutions to raise private capital,” he said, adding that he hoped a public-private investment program will improve the ability to put a price on troubled mortgage and other assets.

PPIP has been so successful. I guess if you keep banging your head against a wall the thing to do is keep banging your head against the wall eventually it will get numb and all your problems will be solved. To Geithner the fool and tax cheat this logic makes sense.

No crisis like this has a simple or single cause, but countries around the world, borrowed too much and allowed the financial system to take on irresponsible levels of risk, Geithner said in his opening statement.

And to the Mr. Geithner, the fool and the cheat, the answer is to go further into debt.  Well tax cheats, government officials, liberals, and fools all think alike.  No wonder this idiot thinks it’s hard to set these prices on these TARP assets.  Oh, and don’t forget they’re supposed to sell back these assets (that they can’t value) once the market returns – dumb, dumb and dumber.

But wait… It’s ok after all the TARP money is already being “lost” by the hundreds of millions.  And is completely lopsided towards the Wall Street elite and against the US taxpayers.   But what would you expect from fools and liars like Obama and Geithner after all isn’t it Obama that thinks tax cuts are welfare checks.  I guess losing money is getting money.

Of course liberal’s have no arguments against this.  So the mainstream media remains quiet about these going on and ignores the tea bag  protests.  After all one can’t defend stupidity with logic.