Stress test kabuki
[I'm leaving this sticky because any post that elicits an on-the-fly response from danps just has to be good. Be sure to read all the way down to the UPDATEs --lambert]
The whole episode reminds me of Iraq -- not just the use of our famously free press for disinformation campaigns, but... Remember the episode where the administration flew billions of dollars in cash on pallets over to Iraq, and never did figure out where most of it went? Like that.
Oh, and the Cassandras suffered the fate of all Cassandras. Fucking hippies, what do they know?*
NOTE * But at least they got to spend two whole hours with Obama at dinner, after all the decisions had been made! You can't say fairer than that!
UPDATE 1 Ritholtz:
Hence, it is not a big stretch to conclude that the entire stress test exercise is a near charade, with foregone conclusions of deleveraging banks to still wildly over-extended positions.
Unlike us hippies, Ritholtz really is read by insiders. So his reaction is an interesting data point.
UPDATE 2 I'm a little exasperated by the lack of coverage* on financial issues by the left in general, and even some of my favorite blogs (the ones I still read). It's a lot easier to get a real, or even vehement discussion going on issues that are trivial by comparison to this one. Versailles has given two trillion dollars to the banksters with no accountability and no transparency at all, and without even so much as a Congressional hearing. That decision is going to structure all of our policy choices for a very long time -- especially if it "fails," but even if it (by the bankster's standards) "succeeds." Whether your issue is Constitutional government and the rule of law, health care, patriarchy, the end of the empire, the media critique, global warming or anything else, following the money is central. Finance is not just another issue. For many -- and especially for the Versailles insiders -- it is the issue. In the finance blogosphere, there's a robust critique. In the left blogosphere -- let alone the "progressive" blogosphere -- there's no such thing. It's one thread among others. Why? This is exactly the kind of laziness and lack of curiousity that lets us sleepwalk into disaster.
UPDATE 3 Danps argues that the complexity of the issue drives bloggers away. 1. Let's not say "complex," it's a self-defeating frame. Let's say "obfuscated" (which, in the case of toxic assets, has the great merit of being true). 2. Under the Bush regime, the left blogosphere prided itself on its analytical capabilities and media critique. Why not now? 3. If this stuff is hard to learn, why not join forces with the econoblogs, who have a ferocious critique? As it is, the people with the knowledge have no capacity to mobilize, and the people with the capacity to mobilize have no knowledge. The banksters have us right where they want us!
UPDATE 4 * I should make it clear that I'm not saying there are no posts on this topic, and if that's what I wrote, I was wrong and I apologize. What I am trying to say is that the posting is radically incommensurate to the scale and impact of the topic. For example, in the run-up to the Iraq war, did we treat that issue as one among many? I'd argue no. The Iraq war was of paramount, transcendent importance, and the Cassandras who did that work treated it that way, and learned a great deal of value about the nature of the administration, its tactics, and how to resist them (See under 2006 midterms). I would argue that the financial crisis is today's Iraq. And I don't see a similar or commensurate level of effort. This is puzzling to me, and disappointing.