Bank Stress Test

The Washington Post writes:

The government signaled yesterday that its financial rescue efforts may have reached their high-water mark, announcing that the much-anticipated "stress tests" of 19 large banks showed that only one, GMAC, was likely to need additional taxpayer aid and that it would begin to unwind assistance for the healthiest firms.

That is welcome news, but the threat of nationalization still hang over our biggest financial institutions:

The government's demand that 10 of the banks raise billions in common equity creates a virtual referendum on nationalization. The banks have six months to persuade private investors to buy new shares of their common stock, or else the firms could be forced to grant the Treasury a voting ownership stake.

Mixed news is better then bad news.

No Time Like The Present

Time to socialize, and I'm not talking about throwing a party.

Dick Morris wrote an excellent article on something that is probably not getting very much attention: A final step in our mad dash to radically and fundamentally change American government & economics forever.

The Obama administration is "considering" converting the preferred stock the government holds in nearly every major bank & financial institution into common stock. Stock they "bought" with TARP money.

What does this mean?

"Preferred" [stock] means that these stockholders get the first crack at dividends, but only common stockholders can actually vote on company management or policy. Now, by changing this fundamental element of the TARP plan, Obama will give Washington a voting majority among the common stockholders of these banks and other financial institutions. The almost 500 companies receiving TARP money will be, in effect, run by Washington.

And whoever controls the banks controls the credit and, therefore, the economy. That’s called socialism.

Read the article, watch it happen.