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Daily Archives: April 20, 2009

Stress Test: What game will government play?

Government is going to release the results of bank stress test on May 4th. What kind of test results can government afford to release? Government can’t fail any bank in the report; otherwise, it will cause bank-run or sink the stock of the failed bank.

What government will do is to make the report look as ambiguous as possible: let everybody pass but identify who is A student and who is D student.

Watch this discussion from Yahoo Techticker:

Mishkin warns Japan-like stagnation

Fred. Mishkin, former member Fed Board of Governors, warns if banks were let stay unfixed as they are today, the US will run serious risk of being hit by another shock and falling into Japan-like long-term stagnation.

Frontline: Inside the meltdown

Frontline of PBS runs a 1-hour program on what’s inside the meltdown. A nice review of what has happened since summer 2007, call it the Crash of 2008.