CHESSNOID

We are definitely in some weird times.  There seems to be a movement only to hide the truth.  Yesterday, Wells Fargo announced record earnings even though we just gave them $25 billion 3 months ago.  Yet today, all the other banks are underwater based on secret stress test results.  I imagine if the results were good they would discuss them and tell us how strong our financial system is.

I expected hiding or twisting the truth in the last 8 years, but after Obama promised more transparency, I am surprised it is to be business as usual.  The American taxpayers have been forced to spend trillions of dollars bailing out banks, insurance companies, and auto makers and yet we are not allowed to know where the money goes or how it is spent.

How bad is the economy when the government does an about face on the results of bank stress tests and decides no one needs to know how solvent banks are today.  Obama still preaches transparency is needed and yet bills get passed behind closed doors, bailed out companies don’t want to disclose how they are spending taxpayer money, and now they have ordered to keep the stress test results a secret.  How bad are the results and do they not realize this will force people to assume it is worse than they can imagine.

April 10 (Bloomberg) —

The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession, people familiar with the matter said.

The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results in an orderly fashion later this month.

“If you allow banks to talk about it, people are just going to assume that the ones that don’t comment about it failed,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.

Regulators are using the tests to determine whether the 19 biggest banks have enough capital to cover loan losses during the next two years if the economy shrinks, unemployment surges and housing prices keep declining. The tests are a linchpin of the plan Treasury Secretary Timothy Geithner announced in February to bolster confidence in the nation’s banks and restore financial-market stability.

I think they are stalling for time and that the next steps may be nationalizing the banks like Paul Krugman and other economists are suggesting. All i know is there will be more wasteful government spending of US taxpayer money on fraudulent bailouts.