An unbelievable spin-cycle of nonsense has been coming from CNBS this morning.
Here's the story that started it all (although originally not on Bloomberg):
May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, according to a person with knowledge of the matter.
CNBS is claiming that this isn't really "new capital" in that the preferred already held by government can be converted as part of it.
That's true but if you are a shareholder it doesn't matter!
If you are a stockholder dilution is dilution and it doesn't matter how it happens. As I noted yesterday:
Read on...
Peacenik's Greyhound bus broke down on the Gardiner Expressway this morning, on Peacenik's way into work. As Peacenik walked along the shoulder of the Gardiner, with cars whizzing by, Peacenik contemplated regulation, or the lack thereof. Who regulates Greyhound buses? When was Peacenik's bus last checked? Who regulates anything anymore? Food? Transportation? Water? Consumer products? Safety? Banks?
Which brings us to the bank stress tests in the US. These stress tests, by bank regulators, were sold to the public to demonstrate that the public's money wasn't being pissed away. The stress tests were/are an exercise in public relations. But even the phoney stress tests can't hide the obvious. The banks are bankrupt. The test results have been delayed, massaged, manipulated and distorted. The public desperately wants to believe that the current market rally is real. The public desperately wants to believe the stress tests are legitimate. The stress tests, the market rally, the market are all bullshit.
Peacenik was rescued from the shoulder of the Gardiner this morning by another Greyhound bus. People who still have money in the market should be so lucky.
Here's the story that started it all (although originally not on Bloomberg):
May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, according to a person with knowledge of the matter.
CNBS is claiming that this isn't really "new capital" in that the preferred already held by government can be converted as part of it.
That's true but if you are a shareholder it doesn't matter!
If you are a stockholder dilution is dilution and it doesn't matter how it happens. As I noted yesterday:
Read on...
Peacenik's Greyhound bus broke down on the Gardiner Expressway this morning, on Peacenik's way into work. As Peacenik walked along the shoulder of the Gardiner, with cars whizzing by, Peacenik contemplated regulation, or the lack thereof. Who regulates Greyhound buses? When was Peacenik's bus last checked? Who regulates anything anymore? Food? Transportation? Water? Consumer products? Safety? Banks?
Which brings us to the bank stress tests in the US. These stress tests, by bank regulators, were sold to the public to demonstrate that the public's money wasn't being pissed away. The stress tests were/are an exercise in public relations. But even the phoney stress tests can't hide the obvious. The banks are bankrupt. The test results have been delayed, massaged, manipulated and distorted. The public desperately wants to believe that the current market rally is real. The public desperately wants to believe the stress tests are legitimate. The stress tests, the market rally, the market are all bullshit.
Peacenik was rescued from the shoulder of the Gardiner this morning by another Greyhound bus. People who still have money in the market should be so lucky.
