Last week while thinking about the stress tests and the fact that US banks won concessions on the stringency requirements of these already laughable government exercises, it occurred to me that when all is said and done, this latest chapter in American history could end up making Teapot Dome look like a freaking anthill.
While I usually try to steer clear of hyperbole, it seems that one person who's been speaking out against the stress tests and the PPIP, William Black, agrees. Last week in an interview with Tech Ticker, Black even went so far as to call Geithner's Public-Private Investment Program (PPIP) "the greatest boondoggle in the history of the world".
Here are some choice quotes and main points from Yahoo's summary of the Tech Ticker interview:
"The PPIP is the "greatest boondoggle in the history of the world," says Black, a former bank regulator who was counsel to the Federal Home Loan Bank Board during the S&L crisis. As occurred during the S&L era, Black says the PPIP will allow banks to exchange "trash for cash" and turn "real losses into faulty gains."
If the goal of Tim Geithner and other regulators was "to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well - mission accomplished," Black says. "
Is William Black right, or is he exaggerating? We'll soon find out, but in the meantime check out this interview (if you haven't already) and the related articles and posts for a very brief and to the point explanation of these rather complicated issues.
Related articles and posts:
1. Stress test optimism just Wall St. propaganda - Tech Ticker.
2. How banks cut stress test cap requirements in half - Big Picture.
3. William Black: "stress tests are a farce" - Finance Trends.