{"id":8270,"date":"2009-05-07T07:00:10","date_gmt":"2009-05-07T14:00:10","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=8270"},"modified":"2009-05-07T02:17:10","modified_gmt":"2009-05-07T09:17:10","slug":"stress-tests-and-wells-fargo-a-tin-foil-hat-production","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8270\/stress-tests-and-wells-fargo-a-tin-foil-hat-production\/","title":{"rendered":"Stress Tests and Wells Fargo: A Tin Foil Hat Production"},"content":{"rendered":"

Today the Fed releases the results of the banking industry “stress test.”\u00a0 You remember this test right?\u00a0 The Fed created a scenario of economic failure well beyond what is already the worst economic downturn in seventy years.\u00a0 They then evaluate the banks’ ability to withstand this Armageddon against the Fed’s own made-up base line.\u00a0 (Let’s not cloud the issue with the idea that the economy is already turning around.)\u00a0 They then tell the banks which failed the made-up test to take some very not<\/strong> made up actions: increase assets.\u00a0 How?\u00a0 Well, that’s the easy part: you can raise private funds (a very tough hill to climb in this credit market), you can accept more<\/em> TARP funds (that many of them didn’t want in the first place) along with the business stifling, government mandates that go with them, or…<\/strong> you can simply convert the government’s preferred stock into common stock (thus increasing the government’s control of the bank – sometimes to a majority stake).<\/p>\n

Interesting results: Bank of America needs<\/em> roughly 35 billion dollars (despite the $45 billion dollars already given them by the Fed in exchange for preferred stock).\u00a0 Isn’t this the same bank that took over Countrywide at the Fed’s behest and<\/strong> backing?\u00a0 It seems that by following the Fed’s request, Bank of America is now more likely to be owned<\/em> by the Fed.\u00a0 But let’s leave that bit of conundrum alone.\u00a0 Let’s take a look at Wells Fargo – by far the strongest of the major banks.\u00a0 Let me ask you: which was the only major bank to have their results leaked way back on Monday?\u00a0 Wells Fargo.\u00a0 Which was the first major bank to ask to return the TARP funds they were forced to accept?\u00a0 Wells Fargo.\u00a0 Which is the only major bank not on life support?\u00a0 Wells Fargo.\u00a0 When the Fed tested the various banks’ liabilities, which is the only major bank with a portfolio that does not contain 100% financing, option arms and teaser rates?\u00a0 Wells Fargo.<\/p>\n

I don’t know what the Fed’s intent was because I’m not in the group creating the long term plans of this Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Today the Fed releases the results of the banking industry “stress test.”\u00a0 You remember this test right?\u00a0 The Fed created a scenario of economic failure well beyond what is already the worst economic downturn in seventy years.\u00a0 They then evaluate the banks’ ability to withstand this Armageddon against the Fed’s own made-up base line.\u00a0 (Let’s […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[251],"tags":[345,346,189],"class_list":{"0":"post-8270","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-big-mother","7":"tag-stress-test","8":"tag-tin-foil-hat","9":"tag-wells-fargo","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5804,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5804\/citis-so-nice-i-bought-it-twice-a-tin-foil-hat-production\/","url_meta":{"origin":8270,"position":0},"title":"Citi’s So Nice I Bought It Twice (a Tin Foil Hat production)","author":"Sean Purcell","date":"November 24, 2008","format":false,"excerpt":"Alright, let's see if I got this straight: Less than 4 weeks ago Citi was purchasing Wachovia in a deal brokered by the FDIC. Less than 3 weeks ago the Fed injected $25 billion into Citi Less than 1 week ago Citi's shares tumbled Yesterday the Fed injected ANOTHER $20\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5435,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5435\/tin-foil-hats-optional\/","url_meta":{"origin":8270,"position":1},"title":"Tin Foil Hats Optional","author":"Sean Purcell","date":"November 5, 2008","format":false,"excerpt":"In an earlier post I laid out how my distrust of conspiracy theories is being severely challenged by our government and what appears to be a naked power grab.\u00a0 I am loath to continue in this vein for fear of being labeled the nut job who writes about Area 51\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9255,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9255\/all-is-well-a-tin-foil-hat-production\/","url_meta":{"origin":8270,"position":2},"title":"All is Well… (A Tin Foil Hat Production)","author":"Sean Purcell","date":"July 21, 2009","format":false,"excerpt":"Quick check on the current status: The CBO came out with a non-partisan report showing that Health Care Reform, as it stands now, will not only fail in its main purpose of lowering health care costs - but will actually raise costs by over $1 trillion!\u00a0 Senators from both sides\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Paranoia... done with style.","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2009\/07\/tin-foil-hat-teri.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":5549,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5549\/the-paulson-clarification-a-tin-foil-hat-production\/","url_meta":{"origin":8270,"position":3},"title":"The Paulson Clarification (a Tin Foil Hat production)","author":"Sean Purcell","date":"November 12, 2008","format":false,"excerpt":"Henry Paulson figured out that buying troubled assets does not help the cause.\u00a0 If you want to own the financial industry you don't get there by purchasing their problems, you get there by purchasing them.\u00a0 (Or at least watching over them with Tin Foil Hat firmly in place.)\u00a0\u00a0 Read the\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10206,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10206\/cit-fed-bk\/","url_meta":{"origin":8270,"position":4},"title":"CIT + FED = BK","author":"Sean Purcell","date":"November 2, 2009","format":false,"excerpt":"A few months back, as part of a Tin Foil Hat Production, I mentioned CIT's desperate need for funds and the Fed's decision not to bail them out. Why is this noteworthy? After all, I don't believe the Fed should bail anybody out.\u00a0 I cheer wildly to see Ford record\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14253,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14253\/rage-and-rates-a-tin-foil-hat-production\/","url_meta":{"origin":8270,"position":5},"title":"Rage and Rates… a Tin Foil Hat Production","author":"Sean Purcell","date":"March 3, 2011","format":false,"excerpt":"The question is: when do you lock the rate for your client? Well, if we knew the actual date this crazy, unforseen event may occur, we could watch closely and lock right up to the day before. Why the day before? Because there are three possible outcomes to this disruptive\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/8270","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=8270"}],"version-history":[{"count":14,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/8270\/revisions"}],"predecessor-version":[{"id":8281,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/8270\/revisions\/8281"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=8270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=8270"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=8270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}