Would You Believe?

Krugman stops by the 'stress test' issue and the leaks around them and I believe he is probably correct. The leaks around the 'stress tests' are merely a way to see how much bad news the public is willing to swallow on this. Sad commentary if true.

Alternatively, there’s Yves Smith’s version: these are all trial balloons to see how outsiders will react to different stress reports.

But that just adds to the bad feeling about all this. Even Brad DeLong, who has been relatively sympathetic to the administration here, is disturbed by the idea that regulators are negotiating with the banks about the test results. Now it seems as if the report’s contents may also be dictated by what, based on the response to leaks, the informed public is willing to swallow. (”Would you believe it if we say Citi is fine? OK, what if we say they need $5 billion? Not enough? How about 10?”)

As an aside, you can visit The Onion and see what satire is like when it is really close to home.