may 10

In my first article "What investors need to know about the Stress tests", the author talks about the results of the stress tests applied to the 19 largest U.S. banks, including which ones need to raise additional capital and how much. The article explained the adverse scenario, but that the banks do try to politicize their numbers to look better for the market. The prospective survivors of the stress test, those that seem viable enough to withstand further economic downturn, are expected to become bigger, strong, and earn greater returns that will offset the balance sheet deterioration. Some bank executive thought the bigger companies such as JPMorgan Chase $ co and Bank of America Corp are going to be earning a lot of money over the next few years since their deposit bases are bigger than they've ever been.

As a person that never really understood the stress test thing other than the clues given by the name, this article shed a little bit of light on it for me. Basically it seems like the government puts the bank through a hypothetical adverse situation and see's if its assets and capital are strong and dependable enough to survive. Also it seems like they're seeing if any banks are in need of more capital. However, the system is being played by the companies, who don't want to lose stockholder confidence if they don't fare well.

My second article "U.S. infrastructure bank no quick fix" was about Obama's vision for a national infrastructure bank. He set aside $5 billion for an entity to provide direct federal investment for roads and highways. Obama's plan calls for the bank to include 25.2 billion through 2019, though the country needs $210 billion a year in infrastructure (3 times current rate), that the need may be too great. Many politicians like the idea, but say it faces too many political and monetary risks. Also, funding a bank is hard because bank investments have to come with returns to stay afloat, and the only way to do that is with tolls or taxes, which are very unpopular.

This article was very interesting. I have never heard anything like this before.  It reminds me of the programs and institutions FDR implemented with federal money when he was in office during the Depression. It seems like a good idea since infrastructure is such a huge cost in America, with our developed system. A system built around focusing on this issue seems like it could improve the standards which i feel like, will serve us in the long run, because better built roads will save us money.

My last article "Fed rejects request to help credit card holders", which was about how the Fed Reserve rejected a request to force credit card companies to immediately halt retroactive interest-rate increases on existing balances. The government already has dealt the with the companies directly, and feel like pressuring them by helping the credit card holders can cause unexpected results and hurt their current efforts. The laws that are being pushed onto the companies will make credit card pricing more transparent and predictable.

It seems to me everybody is lining up for help nowadays. Everyone that is in some sort of trouble, whether its an institution, or an individual, wants something. The economy is bottoming out, and the government can't afford to help both the individuals and the institutions, because that would pretty much mean supporting much of the nation.