Last Call

Going on Cramer's WE WON riff from yesterday, Time Magazine's Douglas A. McIntyre declares the banking crisis to be officially over thanks to one earnings report from Wells Fargo.

When people look back on the near-collapse of the banking system they may say that the Congress and Henry Paulson threw enough money into the path of the oncoming failure of the credit system to slow it down so that the government could properly go through the process of guaranteeing parts of the balance sheets of firms including Citigroup (C) and Bank of America (BAC). The initial TARP may also have provided time for the new Administration to put together its widely hailed bank "stress test" program meant to determine which of the big financial institutions have dysentery and which do not. Finally, the hundreds of billions of dollars that went into the largest banks late last year allowed Secretary Geithner to produce his public/private partnership to buy toxic assets off of bank balance sheets.

All of those plans, no matter how well-intentioned they may seem, are unnecessary now. Wells Fargo (WFC) indicated that it made about $3 billion in the first quarter of the year and declared its buyout of the deeply troubled Wachovia to be a success. Wells Fargo (WFC) said that the low cost of money from the government combined with a surging demand for mortgages was all the medicine that it required.

Banks stocks reacted to the news, which took the markets completely by surprise, by driving up Wells Fargo's stock by 32%. Bank of America (BAC) shares jumped 35%.

Oddly absent from the discussion of how well Wells Fargo did is why the government was in the midst of testing bank balance sheets at all. The experts at the Treasury had been thrown off the scent and consequently had missed the fact that there was not need to test what is already working well. The same holds true for the Geithner plan to take toxic assets off bank balance sheets. It is academic now. What banks are earning from the difference between the cost of capital and the income from lending is now great enough for the banking system to be self-sustaining again.

This is staggeringly arrogant, ignorant, and completely self-serving. This right here represents not only the mind-numbingly incorrect view that the crisis is over and that the banks are all magically fixed based on one bank's shifty earning report, but that in fact the banks can go on operating as just as they did 12 months ago.

That's it. Everything's hunky dory. A little more regulation, maybe a bit less power...but the banks are not only all solvent now, they are self-sustaining, profitable institutions that the government and taxpayers should no longer worry about.

McIntyre speaks in past tense.

I warn of the future. Into the Future Stupidity file this goes.

Baracknophobia

Obama is both the wimpiest human being on Earth and an unstoppable cyborg tyrant, as Jon Stewart reveals.

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Less than three months, and the GOP has gone completely insane across the board. These are people that ignored eight years of Bush's actual fascism and found in roughly 11 weeks, a collective paranoid fantasy that defies reality so well, it's actually a cottage industry.

Glenn Beck Loses It

Glenn has gone bye-bye.

As Steve Benen notes, that's not the half of it.

This was so completely insane, it was probably the first time I genuinely started to wonder if Beck's derangement is an elaborate act. A guy this crazy, in real life, might try to eat his shoes while arguing with mailboxes. Getting dressed and making it to a television studio every day would be difficult.

But that's not really the interesting part. Alex Koppelman added, "Unfortunately, not captured in the video is what happened next, when Texas Gov. Rick Perry came on and Beck asked, 'Governor, you're regretting being on this program at this point, are you not, sir?' Perry responded, 'Not at all, Glenn Beck. I'm proud to be with you.'"

And that, in a nutshell, helps explain what's gone terribly wrong with conservative Republicans of late. Beck appears to be in desperate need of medication, and the chief executive of one of the nation's largest states is "proud" to appear on the show, just moments after Beck pretended to set a colleague on fire.

Not much else to add, other than I'll need to ask Zandardad (being a qualified mental health professional) if he thinks Glennsanity is putting on histrionics and is lucid (I so agree with Steve on this), or if he's really having an episode here.

Either way, that's worth a new tag: Glennsanity!

You never see Olbermann setting people on fire.

On The Road

On the road at the Zandarparents this weekend. Grandpa turns 80, and the family's coming in from all over. Life is good.

Happy Easter to everyone.

The Galt Argument Is A Loser

The basic Randian "John Galt" argument is that society is made up of makers and takers, makers contribute to society by production, takers sap society by consumption. As Atrios reminds us, what the hell do banksters actually produce?

Since the answer is "basically nothing" then why do the Galties worship them?

New tag: Galties.

As Easy As Pulling The Trigger

So, next time somebody tells you that "gun laws are way too tough in this country", point them to ol' Zandar's blog and this story right here. (h/t Oliver Willis)

Immediately following the tragedy, Virginia Governor Tim Kaine and other authorities called on lawmakers to close the so called "gun show loophole" -- by which anyone can buy a gun from a private dealer with no background check and no questions asked. Two years later, that loophole is still very much open, in Virginia and 32 other states around the country.

So just how easy is it to buy a gun at a gun show?

The Challenge: To Buy a Gun in One Hour

For over a year, ABC News has followed Omar Samaha on a very personal quest to hold those lawmakers to their word. Omar's sister Reema was one of 32 shot and killed at Virginia Tech. We went with Omar to a gun show in Richmond, Va. -- one of hundreds held every weekend across the state of Virginia and the country. We gave Samaha $5,000 and one hour to see how many guns he could buy, and how many questions he would be asked.

By 9:30 in the morning, the parking lot was already packed full of cars. Groups of men, couples and even families with children in tow streamed toward the quickly growing line out front. Samaha, 25, joined the crowds and while waiting on line, he was approached by a seller and given the opportunity to make a quick purchase. He bought a Glock handgun, with no background check, and no questions asked.

OK, you're saying. That's one guy, one seller. That does not a trend make, Zandar.

How about ten guns in one hour?

Samaha was never asked to fill out any type of background check. At one point he was asked to show identification. When Samaha said he didn't have any, the seller quickly relented, not wanting to lose a sale.

"He's like, 'Give me $100 more and I'll let you go and take the risk.' I got two guns for $600 without any identification check," Samaha said.

Not only did Samaha buy 10 guns in one hour with incredible ease and no questions, he could have turned around and sold those same guns right in the parking lot. In fact, while standing next to his trunk full of guns, Omar was approached by a man who thought he was a seller. Omar knew the gun show loophole existed, but he was still shocked by how easy it was for him to buy guns with no questions asked.

"Anybody can do it," Samaha said. "And it's for real. It's that easy. Anyone. Someone who's adjudicated mentally ill, someone who's a known felon. Someone who has a history of crime. I think people don't realize how easy it really is."

I disagree. People do realize how easy it is. And that's the problem. Millions of guns change hands in this country every year at gun shows with no background check. You got the cash? You get the piece. It's so easy, it's criminal.

Long past time to tighten up the gun show loopholes.

Still Fighting In Iraq, Folks

Five US soldiers dead in Mosul today. Meanwhile, Gen. Ray Odierno says that gosh, we may just have to miss out June 30 deadline to withdraw our combat troops in Iraq...

US troop numbers in Mosul and Baqubah, in the north of the country, could rise rather than fall over the next year if necessary, General Ray Odierno told The Times in his first interview with a British newspaper since taking over from General David Petraeus in September.

He said that a joint assessment would be conducted with the Iraqi authorities in the coming weeks before a decision is made.

Combat troops are due to leave all Iraqi cities by the end of June. Any delay would be a potential setback for President Obama, who has pledged to withdraw all combat forces from Iraq by August 2010 as he switches his focus to Afghanistan.

The ultimate decision on keeping or withdrawing troops would be taken by Nouri al-Maliki, the Iraqi Prime Minister, handing him a big dilemma, given the desire by most Iraqis for the US military to leave the country.

Tens of thousands of supporters of Moqtada al-Sadr, the anti-American Shia cleric, marched through Baghdad yesterday, the sixth anniversary of the fall of the capital, to demand the withdrawal of US forces.

So when do have more violence in Iraq, with our troops leaving, or our troops missing the dealine and staying in places like Mosul? Can the al-Maliki government possibly survive us leaving, or will it not survive us staying?

Nobody could have predicted, etc...

Shut It, Karl

Joe Biden may be a career politician and a gaffe-prone loudmouth, but to be called a liar by Karl Rove of all people is hysterical to the point of absurdity. Bonus Verbatim Stupid: "You should not exaggerate and lie like this when you are the Vice President of the United States."

...I'm sorry, I'm going to need a moment on this one considering the truth record of the last VP we had. Screw you, Karl. Your entire political career was in fact the application of lying to serve the most dishonest administration we've ever been afflicted with.

Why does Karl Rove still get airtime? What possible journalistic benefit does America gain from this?

Testing The Stress Tests

At fisrt glace, this Bloomberg story looks like more maddening Obama administration obfuscation on bank stress tests.

The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession, people familiar with the matter said.

The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results in an orderly fashion later this month.

“If you allow banks to talk about it, people are just going to assume that the ones that don’t comment about it failed,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.

But Miller has an important point: all the stress test results should ideally be released all at the same time. I've said as much myself.

There's the rub. Will it be politically feasible to publicly call out America's largest banks as zombies? I don't think there's any other way to do it, and that actually might be Obama's trump card.

If Obama keeps the results of these stress tests secret, then the rumors will leak and seriously harm the banks. If however he releases the results for all banks simultaneously, he can then implement Plan N on the worst offenders while identifying "safe" banks at the same time.

If either the list of safe banks or the list of truly insolvent ones leaks before the other, the markets will eat all the banks alive.

However, it's a moot point if the bank stress tests are all nothing but bullshit. That's where we are right now. The more I see stories like this hinting at the prime importance of the stress tests, the less I believe the tests are meaningful at all.

[UPDATE] A good read from Bloomberg's Jonathan Weil about this subject, and it is not a kind article at all:

And now, six months into the government’s Troubled Asset Relief Program, his administration’s approach to the financial crisis is largely indistinguishable from its predecessor’s. The only objective, it seems, is to buy time, in hopes that an economic recovery somehow will materialize and lift the financial system back to health.

And the thing is I can't really defend Obama's position, either. He has taken the Bush position, and unless this bear market rally really is the beginning of a new bull market and a massive, V-shaped rebound recovery (and there is ample evidence it is not) then we're all in terrible trouble when the economic airplane noses down towards the ground again.

Magical thinking that the economy will correct itself will not solve this problem.

StupidiNews, Good Friday Edition

• Wildfire season is in full swing in Texas and Oklahoma.
• An Archbishop in Ireland says Catholic priests may have abused thousands of children.
• CIA Director Leon Panetta is dismantling the agency's notorious "black site" secret prison program.
• The Federal government plans to buy 17,600 fuel-efficient American cars to boost automakers.
• Dungeons and Dragons co-creator Dave Arneson has passed away.