Tuesday, April 7, 2009
Geithner Hoses Economy to Help Banks
CNN says that Geithner will delay the results of the "stress tests" on banks "until after the first-quarter earnings season [ends for most banks on April 24] to avoid complicating stock market reaction".
In other words, instead of closing the insolvent zombie banks in order to save the economy (leading economists say that we have to let the banks fail or the economy will not recover), Geithner will delay announcing that the banks are broke so that their stock remains artificially high. Indeed, in Washington parlance, "delaying" the release of information often means burying them forever.
We may never see the results of the stress tests. This could just be a ploy from Geithner to buy time, just like the tobacco company scientists said they had to conduct further studies on whether or not cigarettes were harmful, and that they would announce the results as soon as the studies were complete.
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