As predicted in my brief piece on Friday, the bank stress test is indeed a joke, unless it was formulated to intentionally exacerbate the banking debacle. Even the so called extreme end of the parameters used to judge the banks’ abilities to stand up under pressure were well within the realm of reasonable possibility, so this was a test most of the banks were destined to fail.

The Treasury, still understaffed, is being manned by kids with crayons and coloring books whose homework is clearly above their pay grades.

The first piece of evidence supporting the above arrived this morning when Bank of America and Citigroup were informed that they’d have to raise additional capital and reserves in order to comply with the guidelines set forth, guidelines far less rigorous than would be required to insure a stable financial system.

Geithner, who made the stress test rather unstressful for his pals on the street (Wall, not Main), seems more of a mini-Paulson than a fresh face for change. While I understand that Obama wanted to preserve some continuity in his selection of a Treasury Secretary, he may well have done so at the expense of preserving the old boy network and their “heads I win, tails you lose” mentality.

They’re about to profit handsomely by, in effect, repurchasing the toxic assets they themselves created, which precipitated this money mess, for pennies on the dollar, with their risk backstopped by the government, AKA you and me, the taxpayers. We’re getting robbed, and then paying for the thieves’ defense.

It’s as if there’s a fourth branch of government, unencumbered by the checks and balances that the other three branches have to abide by. Let’s call it the rogue financial branch.

There’s got to be a Jack Bauer CPA type out there somewhere.

                          

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The parameters for unemployment are far too lenient, even in the worst case scenario. It may seem like the banks can bear up under those parameters. That’s just prolonging the reckoning, as those parameters aren’t stringent enough.

If these are our best and our brightest who’ve come up with these guidelines, our educational system is in worse shape than anyone thought.