Yep, it’s Timothy “Eddie Haskell” Geithner again, who really does not have a f^%$ing clue.

In this case, it is his insistence that U.S. banks can earn their way out of the current hole that they dug themselves in:

Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.

The stress-test results released yesterday by regulators found that the 19 largest banks face a $74.6 billion capital hole that may be filled mostly by private money. That compares with the hundreds of billions of dollars seen by outside analysts, including the International Monetary Fund, and takes into account banks’ projected earnings over the next two years.

The “stress-test results are an important step forward,” Geithner said in a statement announcing the results. “Americans should know that the government stands behind the banking system and that their deposits are safe.”

…

Geithner told reporters that regulators took a conservative approach to toting up potential credit losses and calculating the industry’s ability to absorb them through increased earnings. The forecast of future profits was at the “quite low end of analysts’ expectations,” he said.

(emphasis mine)

It is quite literally all a confidence game to him: If he can convince the American public to maintain their confidence in the banking system, then they will make so much money, from those FDIC subsidized loans, I guess, that they will earn their way out of this.

It’s also clear that the “stress test” was intended as a confidence building measure, whether it is justified or not.

When you look at the dictionary for the definition of “regulatory capture“, the process by, “which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating,” you sill see this picture.

Great googly moogly! How stupid do they think that we are?

Who are they anyway? Maybe we can export them to Namibia.