tag:blogger.com,1999:blog-7905515.post560076162865330963..comments2024-03-14T11:09:32.759-05:00Comments on Falkenblog: Banks Insolvency is not about Stress TestsEric Falkensteinhttp://www.blogger.com/profile/07243687157322033496noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7905515.post-76990377870433825892009-02-18T00:33:00.000-06:002009-02-18T00:33:00.000-06:00Why would you want to intentionally stress banks? ...Why would you want to intentionally stress banks? It's a stupid idea. Consider on the other side, a homeowner with a 30 year fixed mortgage. Even if the house is now worth less than the mortgage, the bank can't call the loan so long as they payments are being made. Besides, why would the bank want to? You'd just be turning a performing asset into a non-performing one by needlessly throwing the homeowner into foreclosure and possible bankruptcy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-25923647168732645242009-02-17T20:24:00.000-06:002009-02-17T20:24:00.000-06:00Clearly a good call. I clearly missed this whole ...Clearly a good call. I clearly missed this whole contagion thing, but I think it is a runaway panic, exacerbated now by huge policy uncertainty. If the Treasury wants to kill banks, they can do it. They don't have to, but they can always say they would have died anyway.Eric Falkensteinhttps://www.blogger.com/profile/07243687157322033496noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-49478029954263466482009-02-17T19:10:00.000-06:002009-02-17T19:10:00.000-06:00Paul Krugman, generosity incarnated with OPM, said...Paul Krugman, generosity incarnated with OPM, said on C-SPAN (while touting his book), that in his estimate at least 5 of the top 10 US banks would not pass a stress test. So, what are the options for Geithner:<BR/><BR/>1) Pronounce several big banks dead, certainly Citi and BoA, and thus cause a credit constipation way worse than the one that followed Lehman's collapse, or<BR/>2) Apply a stress test that is nothing of the sort, and go back to Paulson's shtick - save banks, and not the banking system.<BR/><BR/>I know which one I believe, and so I took my profit in SKF at $180 a share.Plamenhttps://www.blogger.com/profile/14209486398849262374noreply@blogger.com