Jim,

Am I the only one with a smirk on my face? There is no better indication of what banks will and will continue to do under "stress" than the breakdown of total bank credit through 1/1/09. There’s little change from previous months.

Get ready for nationalization if these trends continue.

CIGA Eric

Big Banks Get Ready for Stress Tests
Obama administration is getting ready to conduct "stress tests" on the nation’s biggest banks to judge whether they can hold up if the recession were to worsen.
Wednesday, February 25, 2009

WASHINGTON — The Obama administration is getting ready to conduct "stress tests" on the nation’s biggest banks to judge whether they can hold up if the recession were to worsen.

Banking regulators plan to scrutinize the financial conditions of Citigroup Inc., Bank of America Corp. and more than a dozen other institutions that have received billions from the Treasury Department’s $700 billion bailout pot.

The tests, expected to start on Wednesday, will help regulators decide whether the banks have sufficient capital — and the right mix of it — to withstand any additional shocks to the economy over the next two years.

The tests also will help regulators decide whether the banks may need additional assistance so that they can carry out the critical mission of boosting lending to customers, a key ingredient to the economic turnaround.

More…

Click chart to enlarge…

Dear Mr. Sinclair,

Here is a very interesting Globe and Mail interview:

‘There will be blood’
Harvard economic historian Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession’ ends
HEATHER SCOFFIELD
Globe and Mail Update
February 23, 2009 at 6:45 PM EST

Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.

More…

Jim,

During the Q&A session Bernanke suggested that the SEC looking into restoring the uptick rule. He also suggested that its restoration was "worth looking into its restoration."

Regards,
Eric