LEAKED! Bank Stress Test Results !

The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!

I know this is from a blog and therefore not very trustful information. However the page itself tries to reassure us of the validity of their information by quoting a recent earlier leak by them:

For those who may be skeptical about the veracity of the stress test report above, be reminded that only last Sunday, April 12, this radio network obtained and published a Department of Homeland Security (DHS) Memo ...

We obtained it and published it days before other media outlets.

Now I have not looked into this earlier report by them, but I thought some of you might still want to read the article. Here is the link:

turnerradionetwork.blogspot.com... ess-test-reults.html

If this IS the true report then I wonder if it will ever be made public. Might cause a pretty panic. On the other hand, if it IS publicly made available, I wonder if the aim is just to CAUSE panic. I guess I am too paranoid lately and don't trust anyone WHATEVER they tell me... sigh.

I know there is a new minimum to post, but here is a link from Time Magazine.

www.time.com...

I hope there are enough characters to pass the minimum

The important thing is how much they have to pay out in derivatives if all the banks survive and what will their capital will be if all the derivatives zero out. I think you will find that the amounts are reasonable and not threatening to the banks solvency.

Thus all we have to do is keep the banks alive until the derivatives expire worthless. Then they will be left to live or die on their own.

but whatever the case one hting is for sure. There needs to be mega regulation of these derivatives going forward. If you are going to insure someones debt then you better have the majority of possible payments stuck away in a fund somewhere. No more illegal insurance contracts.

So what happened to the bailout money that was supposed to flush the banks with capital enough to remain solvent?

Could there be mass misappropriations of these funds?

Were they ever actually delivered? Perhaps this is why banks aren't eager to have transparency. The Fed never delivered the TARP funds allocated to the banks in order to keep them afloat.

As far as I know credit still isn't flowing, the housing market even though it has had an uptick still remains fragile, foreclosures still a major concern.

There has been no new news on the "bad bank" plan.

It seems as though the wound is bleeding through the band aid.

course this all reminds me of something. I think we have been here before but haven't learned any lessons.

S&L Crisis

Oh well, as they say, those who do not learn from the past are doomed to repeat it. Looks as if we are repeating recent history all over again.

So what will the consequences of this be, I wonder. How do we fix this, or do we just wipe it away and start anew? (I know, probably not possible)

All I can think is that this is going to cost us another pretty penny.

How interesting would that be if this report is accurate! From all that I have read and heard there is no way that most banks are in anything close to a "healthy" state. If it does claim they are, well then they just manipulated the results as far as I am concerned.

I have said many times that an organized run on the banks would bury them, perhaps if people had the nerve and were organized we could send a strong message. That being said, it is sadly unlikely.

I guess all there is to do now is wait for the official report.

Originally posted by Alora
So what will the consequences of this be, I wonder. How do we fix this, or do we just wipe it away and start anew? (I know, probably not possible)

All I can think is that this is going to cost us another pretty penny.

I think they are in to big of a hole now to be able to just wipe it off of the books with out serious consequences. The market is already showing some serious problems today and I would guess that these leaked results are part of that.

Interesting. How does this report, if accurate, correlate with the recent profits posted by some banks? Things just aren't adding up.

Furthermore, many banks have gone on record as saying that they will reimburse the government asap. How is this possible if things look so bleak?

A lot of questions but not many answers.

And for the time article, if things are really so rosy, why did the administration want to delay the releasing of the stress test results?

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.

www.bloomberg.com...

Seldom hear of anybody wanting to hold back good news.

tried looking this up on Wikileaks and Wikileaks is shut down not sure if it has to do with this story or not.

Wow. Thanks to the OPer for this juicy "leak."

What doesn't add up for me is that the Fed has pumped massive capital into these Banks and they've essentially sat on it- with bearish attitudes- which explains the lack of liquidity even with Massive gov aid.
So for them to still fall short of capital requirements in the face of derivatives problems doesn't make sense to me. I'd imagine the gov is still allowing them to cook their derivatives portion of their books and they'd still have to be hugely overextended in
derivatives for this to be reality.
I'm not surprised but not fully convinced here- although the markets are responding accordingly today (4-20).

With derivatives, I've found it quite absurd how policy makers don't say the word. OTCs are derivatives and they've said that and OFCs and such but never the word derivatives.
Funny goings on.
Thanks OPer. SnF,

looks like someone beat you to posting this thread by about 6 minutes, check breaking news for the original thread.

There are precious little in the way of surprises in these leaked results.

Our 'major' banks are propped up on make-believe assets..., all boiled down to fictional funds they 'anticipated' as collateral for make believe bets, which ironically WE HAVE TO PAY FOR.

FRACTIONAL RESERVE LENDING IS THE ROOT OF THIS PROBLEM.

That..., and rich boy gambling thrills....

Banks should be limited to compensation for services, NOT gambling skills.

[/rant]

Originally posted by Maxmars
There are precious little in the way of surprises in these leaked results.

Our 'major' banks are propped up on make-believe assets..., all boiled down to fictional funds they 'anticipated' as collateral for make believe bets, which ironically WE HAVE TO PAY FOR.

FRACTIONAL RESERVE LENDING IS THE ROOT OF THIS PROBLEM.

That..., and rich boy gambling thrills....

Banks should be limited to compensation for services, NOT gambling skills.

[/rant]

We abandoned fractional reserve banking decades ago. We are now and have been for a while on a purely fiat system.

Of course Treasury is now saying that they don't have the list yet but, then, why did the Federal Reserve on 4/10/09 tell Goldman, Citigroup, etc. to keep quiet on the results? This just stinks and I call:

[atsimg]http://files.abovetopsecret.com/images/member/217a14b8cb73.gif[/atsimg]

reply to post by Zosynspiracy

We abandoned fractional reserve banking decades ago. We are now and have been for a while on a purely fiat system.

And that system has evolved into the credit market we see today, no longer is it even a pure Fiat system of economics but something much more unstable. A debt/credit system that largely ignores the Fiat monetary supply to create wealth where there in fact is none.

The contractions and expansions of credit lines with variables too complex for Stephen Hawking to rationalise along with the deregulation and ignorance of the past led us to this state.

The banks carry far too much debt to be able to expand their own credit lines. In short we maxed out this credit card and the bill is due.

Pumping money into a failed system as we are soon to learn isn't the right angle. Soon this "investment" by the government through the Fed is going to fail and short of completely nationalising the banking system of this country (if that would even work) the contraction of credit will hit everyone to the point of a cash & carry economy.

The bailouts as we will find were the wrong approach. The correct approach would have been to let these banks fall, limiting their influence on other financial institutions that didn't take on these bad assets.

Much in the way that the majority of Americans were for. But our all knowing and all blundering congress ignored.

When all is said and done I think people will find that the Fed along with executives bled off the TARP funds, never letting the majority of the money hit the books and thus through the massive misappropriation of these funds further weakened the state of these banks in a way that they will no longer be repairable and will collapse in on themselves sending a fiscal shock wave through the markets.

See y'all in the bread line if they can afford it.

I think the "leaked" information is in all likelihood accurate and the banks are in really bad shape, but I do not think that the Government will release such a bleak report.

I posted this article in another thread.

"We expect the stress test to demonstrate that the 19 banks are all well capitalized even under the stress test's worst-case scenario," says Scott Talbott, senior vice president at the Financial Services Roundtable, which represents the largest financial institutions.

However, a chorus of bank analysts and economists are questioning the rigor of the stress tests if the results are really so positive. After all, just six months ago, the entire financial system was brought to its knees from the stress of capital market losses and rising mortgage defaults.

www.usatoday.com...

I just don't believe that the government will be honest with us when they already spent hundreds of billions of tax dollars on this mess.

reply to post by whatukno


Good points.
I'd say however the banks still operate in a sort of phony fractional reserve system and that it appears they're simply waaaaay overextended. I forget the traditional standard (and apparently so did the banks) -maybe 8 or 10%? And that they whittled down to like 3 or 2 or even maybe less than 1%.

The regulatory agency in charge of enforcing these standards on the international level is a branch of the BIS which has obviously failed and I believe needs some scrutiny. The answer (if you're not a bleeding heart) is let them fail and try to best manage the ensuing chaos as best as possible. Although we all know the utter disdain the FED shows towards us common folk. I think they're just stacking the jenga tower as high as they can before they pull the plug.
And then, just as you said, bread lines and bollocks for the lot of us whilst they sip champagne.

i see this as having TRUTHFUL info.....but the leak IMO is a HOax.....i would not see the gov't doing this....(being honest about such awful truths).......

market ticker is trying to decipher if this is legit or not....but this guy turner (blog) is really playing with BIG time fire....last year karl would have kicked everyone off the site for even mentioning a guy like hal turner....i am pleasently surprised he allowed this in the "rumor" forum

Also to address earlier question about how banks could still be insolvent with all the tarp money ..i think some of the TARP money went to help banks Follow thru on the existing lines of credit that corporations had secured in 2006-07 (for 3 year or so time frames) and that banks needed money to provide the financing that they agreed to a couple years ago...maybe someone could confirm or debunk this......anywho

based on this www.bloomberg.com... i'm not sure if anyone is trading based on this info

i do think it is FUNNY and TELLING (how much the treasury fears rumors to move markets) that they actually responded to this H turner leak and said "we don't even have the results yet....and basically to ignore any "leak" as false".......the fact they even posted this speaks to the degree they fear rumors to spread panic ....wow





[edit on 20-4-2009 by cpdaman]

I've been thinking about a more well thought out post than the one I made in Breaking about this news. I'm not too fond of Turner, but I'm even less fond of the people running the FED and Treasury and DC in general.

The fact that the the .gov felt the need to respond to a claim by Hal Turner gives it a legitimacy all its own.

The April 10thBloomberg article implies that at least some of the stress test is out somewhere amongst those that were examined, and a leak is possible of information I suppose.

Mr. Turner needs to post what information he has in the format that he has it.

I feel the numbers he is posting is about right for worst case scenarios. If the failures are half that bad we'll be lucky to not see violence on the streets.

The ap story that i posted a thread on earlier

said bank stress tests harder on regional banks......

This imply's to me the big banks report will be a WHITEWASH and they are going to try and give the report some credibility by showing that some banks.......like regionals are hurting .....and this will also benefit the financial "oligarchs" by helping a consolidation of power by possibly feeding these regional banks to the Short sellers for DINNER! and many a small bank could go under do to high Commercial real estate exposure.....yet indeed this report is likely a hoax ....truthful none the less...but never to be reported