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About a month ago I wrote a post called “The coming wave of second mortgage writedowns” the gist of which was that the big four banks (Citi, JP, BofA, and Wells) had a shed load of exposure to now worthless second mortgages. With many first mortgages now hopelessly underwater, it stands to reason that second [...]

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You remember those stress tests the government conducted at the largest too-big-to-fail financial institutions. They have long since been forgotten. But, they are a relevant topic of conversation because some of the policy makers’ thinking in administering them of has come to light in the Atlantic’s recent exposé of Treasury Secretary Geithner. I suggest you [...]

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Credit Writedowns has made it clear how little will there is in Washington for substantive reform in financial services.  But, let’s be more explicit in this post about what policy makers are doing.  I will use the recent Citigroup TARP brouhaha and changes to the implementation timetable of accounting rules as the vehicle for this [...]

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I was reading Kid Dynamite’s account of the recent Treasury – Finance Blogger meeting after having read a bunch of others (see them all in Abnormal Returns’ Nov 4th links). And I was struck by his characterization of the thinking at Treasury in regards to the financial crisis. I want to highlight two points and [...]

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Kyle, a long-time reader, recently asked why I think mark-to-market accounting actually matters.  After alI, savvy investors know that accounting does not necessarily change cash flows.  I think his question has a lot to do with not just accounting, but also with the stress tests.
Kyle writes:
My point is that it has really NOT changed, and [...]

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I forgot to add this to my links.  Very funny Saturday Night Live clip spoofing Timothy Geithner.  See the link here.

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I found this story and video of Bill Black on Tech Ticker (hat tip Larry Doyle). Basically, Black thinks the stress tests were a joke, a common theme heard from those in the know. Listen to what he says about a really difficult stress test we gave Fannie Mac ten years ago.
Results of [...]

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In case you missed it, this is Tim Geithner talking stress tests this past Wednesday on Charlie Rose.

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In the CNBC video below, Ken Lewis defends his company’s performance on the stress test and answers some pointed questions in the John Thain – Ben Bernanke – Ken Lewis – Hank Paulson he said she said match.  He also details how Bank of America plans to raise the $34 billion in capital to deal [...]

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This came to me in my inbox seconds ago:
Federal Deposit Insurance Corporation (FDIC) Chairman Sheila C. Bair today commented on the release of the results of the Capital Assessment Program.
Chairman Bair said: "I want to commend the Federal Reserve for leading the stress assessment exercise and believe that this effort will serve to strengthen the [...]