Comments on: Why didn’t the WSJ stress-test the big banks? A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Jeffrey Levin Wed, 20 May 2009 19:02:39 +0000 Felix:

Regulators had 157 full time examiners going over the 19 largest banks for weeks. The WSJ probably had two guys with an excel spreadsheet try to put together their methodology in about 2 days.

Maybe there is a better reason than the grassy knoll for the wsj to punt on the largest 19. Cost vs benefit for a story.


By: JanB Wed, 20 May 2009 00:28:47 +0000 Consumers in America need to realize they have the ultimate power— The power of CHOICE.

We have a CHOICE as to where we will put our hard earned money. Are you going to put that money with a big bank, who is sucking American tax dollars DRY??

If you are, you are a FOOL.

Boycott the big, corrupt, lying institutions America.

CHOOSE a better way.

By: Tom West Tue, 19 May 2009 19:26:04 +0000 And then we could see very clearly how the WSJ’s approximation of the stress tests compares to the real thing.

That would be the point, would it not? The stress tests rely on so many variables and assumptions, that it’s almost inconceivable that the two tests would produce similar results. In the minds of most of the readers, that would invalidate the results of the stress test that the WSJ spent so much time and money to produce. (Most will assume the government got it ‘right’.)

Of course, what it *should* probably do is invalidate the assumption that you *can* do modeling of a system with as many uncontrolled and unknown variables and expect it to produce highly meaningful results, whether it be the government or anyone else performing the modeling.

By: Jack Tue, 19 May 2009 17:43:06 +0000 Felix, i think the WSJ methodology produces similar numbers to the actual stress tests. It is difficult to tell whether the number are reliable or not but i think these are reliable. But I agree with you that they should have printed the results so we could see for ourselves.

By: DollarEd Tue, 19 May 2009 17:37:20 +0000 (assuming a warm, chiding tone)

Felix, you are trying to say something, but your dry and indirect style only serves to prove the point.

Here’s the point: there is a reality distortion zone around the big banks. They spend so much money on PR and lobbying that they distort their own regulatory regime, they distort political calculations, and they intimidate journalistic organizations into not reporting accurately on them.

Obviously, the WSJ had sufficient data and a sound enough methodology that they were confident enough to apply it against 940 banks and publish the results. So, it would be very valuable, both to validate the WSJ’s work and to learn more about the Big Banks, to apply it to those 19 Big Banks. After all, they comprise 58% or something like that of the banking sector, so to not extend the coverage of the article really shifts the article from National News to some sort of stock picking (or dumping) exercise.

And why not cover the Big Banks? Reality distortion zone – endless calls from PR flacks, threats to cut off access, calls from CEOs to Rupert Murdoch.

And you, Felix, what do you do? A dry, indirect questioning tone, and then on to the next subject. And that’s not in your best interests. You are a superb writer – you could have summed up the cowardice of the WSJ and the clout of the Big Banks in two sentences, and Eschaton and Yglesias and Calculated Risk would have linked to your sharp, accurate quip, and traffic would have flowed to you.

So why not? Are you in the Zone?