Mike from Fever I Am posted this interesting tidbit today on his blog:
FRIDAY, 1 MAY 2009
US Federal Reserve to delay 'Stress Test' results
In amongst all the 'news' on the Chrysler bankruptcy, a couple of articles most news agencies are ignoring...
It would appear there are internal battles on how to "frame" the results of the Federal Reserve 'Bank Stress Tests'. It would appear they are at odds with 'regular investors' on what to use as 'Capital'. Check the article from Bloomberg on this info here:
http://www.bloomberg.com/apps/news?p...d=aVlgKH_MT_mo
Reuters is also pointing out that the results will be individual banks, instead of the expected 'Summary' report. Their article is here:
http://uk.reuters.com/article/busine...53T7TL20090501
The most important bit of the Bloomberg article:
Quote:
While the banks were ordered not to release the results of the stress assessments prematurely, Goldman Sachs yesterday may have provided a hint with its decision to sell bonds and shares, issuing $2 billion in five-year notes without a government guarantee and making a $750 million stock offering. A spokesman for Goldman Sachs declined to comment.
“You can read between the lines on it that nothing adverse will be coming out next week” about Goldman Sachs, said Ralph Cole, a money manager at Portland, Oregon-based Ferguson Wellman Capital Management Inc., which oversees $2.2 billion.
At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, people briefed on the matter said this week. While some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity, the people said.
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May 11 is looking more and more like the tipping point for a market 'correction'. I suspect the 'insolvent' banks will hang on for some time; with perhaps a summer 'Bank Holiday' on the cards.
Peace
POSTED BY MIKE AT 08:01
Source: http://feveriam.blogspot.com/