I guess Obama is really damned if he does, and damned if we doesn't. Earlier, President Obama was being raked over the coals for lack of transparency, and not disclosing the status and results of the bank stress tests. Now, as it appears that the stress tests will actually disclose that some banks are in poor shape, I am starting to see more stories like this one, as well as one in the LA Times, arguing that disclosure and transparency is bad for banks and the market.
Shoot. Who knew? Perhaps President Obama should have just nationalized ALL the banks, even Wells Fargo, and sort out the good and bad later?
http://247wallst.com/2009/04/15/disclosing-bank-stress-test-numbers-good-way-to-cause-panic//snip
Disclosing Bank “Stress Test” Numbers: Good Way To Cause PanicThe government is close to having the results of its “stress tests” of large US banks. It has taken the financial firms’ balance sheets and set up models for what will happen if the economy worsens. Any bank that looks weak under the circumstance of the trials will be asked to raise capital. In the current credit environment, that many be nearly impossible to do.
The Administration has been asking banks not to divulge data on the testing when they put out their first quarter numbers. That stance undercuts normal disclosure rules for public companies which requires them to give out “material” information about their businesses. How each firm performed in the government trials would certainly qualify.
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