Eric Dash should give up reporting and get a job as a sous-chef or something. There’s just no excuse for writing thinly-sourced jibberish on B1 of the New York Times. And his editors? What were they thinking?
Dash opens his article by telling us that he has spoken to some (unnamed) bank examiners involved in conducting stress-tests on the 19 largest banks in the country and that they have good news…the books aren’t as bad as many fear. Then he tells us that many of the bailed-out banks need to be bailed out again. After that, he gives us this doozy.
Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: if the examiners determine that a bank needs “exceptional assistance,” the government, that is, taxpayers, will provide it.
Imagine a teacher grading exams and telling you that no one will fail because failing students will be allowed to get extra tutoring and retake the test. If necessary, they’ll be given the answers. But it gets worse. Read this.
Regulators recognize that for the tests to be credible, not all of the banks can be winners.
So, some banks won’t pass? But does it even matter?
But the tests, which are expected to be completed by the end of this month, are being conducted out of public view. Federal law prohibits the unauthorized disclosure of the results of any bank examination, including the stress tests.
Okay, so the bank examiners are barred by federal law from disclosing what they learn? Then what about this?
“Clearly there is a desire to put a seal of good bookkeeping on these banks,” said Lou Crandall, the chief economist at Wrightson ICAP. “Whether they will use this to select a couple of sacrificial lambs is unclear. It’s a big uncertainty hanging over the system right now.”
Sounds like they are grading PASS/FAIL and they can at least tell us if someone failed, if not any of the details about why or how badly. The same examiners that said the banks are better off than expected also say this:
Several people involved in the process say there is a wide range of results among the institutions. Those that fall short will have six months to raise capital from private investors; if they are unable to do so, the Treasury Department has said taxpayer money will be available.
Some federal and industry officials say regulators may use the results to prod reluctant banks to sell assets under that program.
A lot of people are taking this piece of crap article as a launching point to attack the administration, but the real culprit here is Eric Dash, who wrote an anonymously sourced, contradictory, piece of crap article that means nothing. He doesn’t tell us what is going on (banks are good, banks are not so good), he doesn’t tell what is going to happen (everyone will pass, some will fail), and he doesn’t tell us what we’ll learn (the law bars disclosure, some banks will be made scapegoats).
Reporting this piss-poor shouldn’t be allowed in the Paper of Record and it shouldn’t be used as a source to predict anything or criticize anyone.
