The bank stress tests are expected to be released at 5 pm ET today. Treasury Secretary Tim Geithner says they will lift the “fog of uncertainty” over the banking sector. But I doubt they will dissipate the cloud of skepticism over the parameters for the tests. You can read Geithner’s explanation in the New York Times of how they were conducted. Other items that grabbed my attention:
UN stunned by scale of bailout (BBC)
“We waited perhaps a decade to get $5bn ($3.3bn) to accelerate development of renewable energy,” he said. We now see $20bn (Â£13.3bn) paid [to] a car company simply to keep it alive.” He said he was surprised that such huge amounts had “suddenly been found” to tackle the crisis.
Will the SEC go after big fish? (Bloomberg)
Even so, the ghost of Cox looms large. While he wasn’t much of an enforcer himself, he spent his last weeks at the SEC repeatedly cautioning the public that the government was too compromised to investigate companies where its own money and reputation are at stake. His admonitions made perfect sense.
Dream of SEC Overhaul Fades Along With Crisis (WSJ)
As a result, the drumbeat for change at the SEC is growing fainter. The House Financial Services Committee is more occupied with credit card rates, Internet gambling and executive compensation than with remaking Wall Street’s rules. Once promised radical structural changes, we are instead getting the kind of reform normally enacted by career bureaucrats such as Ms. Schapiro: None.
GM’s (GM) Losses Go Global And Market Share Collapses (24/7 Wall Street)
The Treasury may be facing a reevaluation of GM’s prospect with its earnings showing such a broad collapse abroad. Creditors who are trying to get $27 billion back from the company will now be less likely to want to swap that for commons shares. GM is in too much trouble.
Obama’s Fuzzy Detroit Math (WSJ/Mean Street)
Don’t think that the President’s Auto Task Force wasn’t aware of what it was doing when it wrote up the press release and president’s speech on April 30. These are very smart people. And what they did and didn’t tell the public wasn’t becoming of an administration that stresses transparency. Perhaps, the Obama team doesn’t believe that America can handle the truth of the Chrysler bailout’s full cost.
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