Requiem for a Stress-Test Lie
In my late, lamented Portfolio blog, I described how a bigot named Hal Turner had turned the markets on their head with a phony report on a supposed "leak" of stress test results. Turner supposedly had information showing that sixteen of the nineteen banks were insolvent.
Well, the results of the stress test are out, and while it shows that banks need billions in capital, absolutely none of them were insolvent or even close.
Reuters reported that "U.S. Treasury Secretary Timothy Geithner said on Wednesday that none of the 19 banks being examined under stress tests are at risk of insolvency."
So it's now fairly plain that Turner spread a lie for the purpose of increasing hits to his website.
The SEC is said to be investigating. Good. Hopefully it will show greater than usual efficacy, and find grounds not just for civil proceedings, but for a criminal referral to the Justice Department.
© 2009 Gary Weiss. All rights reserved.