May 7, 2009

Stress Test Finale

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The Wall Street Journal reports on the results of the stress tests:

The Federal Reserve directed at least seven of the nation’s biggest banks to bolster their capital levels by $65 billion while effectively blessing the stability of six others, marking for the first time a bold line between some of the nation’s stronger and weaker banks.

All I can say at this point is that I’m baffled.  If Geithner is right, then everything is fine and the banking system was never really in very big trouble.  $65 billion is nothing.  But if the IMF is right, American banks are nearly $300 billion short.  If Nouriel Roubini is right, the shortfall might be even greater.

So who is right?  I have no idea.  “All Americans should be confident that these institutions are going to be viable institutions going forward,” Geithner said tonight, and I sure hope that’s the straight dope.  But these discrepancies are simply too large to wave away.  Somebody is way, way off base, and I’d sure like to know who it is.

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

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