Deciphering the Bank Stress Tests May 20, 2009
Posted by Jeff Nabers in : Money , add a commentHere are a couple highlights for a recent post over at Daily Reckoning regarding the bank stress test results.
- Banks need about $75 billion to reach “adequate capitalization”
- “Adequate capitalization” is when common equity equals 4%
- Common equity being at 4% means a debt-to-equity ratio of 25-to-1
- The current bank needs do not factor in the potential for bank assets to lose their value
- The current bank needs are based on a rosy worst case scenario of (more…)
Bank bailout money goes to CEO bonuses November 1, 2008
Posted by Jeff Nabers in : Money , add a comment
Mark Cuban, billionaire owner NBA team Dallas Mavericks, runs a couple of interesting web sites. In July of 2006, he started ShareSleuth, an online publication that exposes fraud in the stock market. It’s surely worth checking out.
More recently Cuban has launched BailoutSleuth, an online publication aimed at creating transparency of the government bailout of the financial services industry. One of the latest findings seems to be that officers of all of these failed banks are continuing to pay themselves millions of dollars in bonuses. While some other countries have their own bailouts, the U.S. is the only country who has not capped the compensation for officers of the corporations who receive bailout money. Read the details here…
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