Banks Still Going Bust?

Some creative, some Congress provide more assistance and outcomes of stress tests “Squash a large return in May with the banking sector. The award is rebound, and investors seemed nervous about the banking sector, despite several big banks to report first quarter earnings. Wells Fargo, Inc., Citigroup and Bank of America all reported better than expected results for the first part of the year.

The bottom line growing banks in question. The New York Times Paul Krugman, financial columnist warned Americans to remain skeptical, because the banks handling their figures. “The greatest good news in recent days, banks that, since the announcement of surprisingly good results. But some of these earnings reports … a little weird. “For example, Krugman said that Goldman Sachs’s definition of” neighborhood “.

Treasury Secretary Timothy Geithner has revealed recently that the $ 700 billion of government money to rescue U.S. financial markets, only 109.6 billion dollars. While the treasury department, they expect the fund to over $ 25 billion next year, as companies to repay their loans, the Congress seemed a little confused on the refund taxpayers directly to the massive investments. The figures for distribution as follows, according to the Associated Press:

$ 355.4 billion – under the Bush administration to strengthen the AIG, Citigroup, Bank of America, GM, Chrysler and other companies.

30 billion dollars – additional funding to AIG under Obama administration.

5 billion dollars – additional funding for automakers under the Obama administration.

200 billion dollars – over $ 500 paid by the banks.

With all the money to banks, the Federal Reserve “stress test” is the result of 19 major banks are expected stellar, is not it? The results are not shown to the public no later than May 4, but not the first promising signs.

Subsequent to the AP, “Federal Reserve officials told journalists Friday, the 19 banks, stress tests to be submitted for a new buffer of capital reserves, moreover, what is needed now, for the where the losses to climb. It would say that some banks may have to cash. ”

One possibility, the government proposes that the banks more capital would be responsible for the Fed, its participation on the shores of preferred shares to common shares, voting rights. Many analysts taste of the dreaded never banks. However, Congress seems reluctant to loosen the chains of another currency for the financial sector, especially among the American public’s anger over bonuses and other excesses bank.

The next weeks will be decisive for the banking sector, as they to improve the course there are notes of the Fed for the disclosure of the results of stress tests. For a map of all the banks have got money, always tight credit for businesses and consumers in the U.S. and the location is still low.

In other financial information better than expected figures despite consumer confidence in April, the economy is shrinking at an alarming rate. According to a recent AP report, the economy fell 6.1% in the first quarter of this year as companies continue to reduce costs and the employees.