🖤 Donations of all sizes power our public service journalism Give Now
Marketplace Scratch Pad

It just gets weirder and weirder

Scott Jagow Apr 20, 2009

A blogger claims he was leaked the results of the bank stress tests. He backs it up with a bunch of numbers, including that 16 out of the top 19 banks are technically insolvent. The Financial Times links to his post. The Treasury issues a statement in response. The stock markets trade on it. Oh, did I mention the blog is run by a white supremacist?

The Turner Radio Network is a blog attached to the Hal Turner Show, nothing to do with Ted Turner. Here’s some of what was written in the original post:

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

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.

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.

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!

The Financial Times blog, Alphaville, had this post about it, which linked to the Turner Radio Network and said this was “something of a scoop,” albeit “odd.”

Apparently, the FT and perhaps other sites giving the report quasi-legitimacy was enough to move the markets and prompt a response from the Treasury. From Reuters this morning:

“There is no basis for that report, we do not even have results yet,” (a Treasury spokesman said)…

“It certainly did (move the market) for a while. It raised people’s eyebrows. People had associated it with (Ted) Turner’s broadcast network,” said Lou Brien, market strategist with DRW Trading in Chicago.

I guess this is what can happen when you try to keep secrets in an age where it’s extremely difficult to keep them. People want to know so badly, they’ll believe just about anything. And this is what can happen when a respected newspaper blog doesn’t practice due diligence. Ben says correctly in the comments section below that Turner’s stress test “results” come directly from a press release dated April 6th by a Dr. Martin Weiss to promote his book.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.