Charles Payne
So, maybe now banks will begin to lend money after getting the green light from the Federal Reserve to plow a bunch of dough into share buy backs and dividend hikes.  Only two banks, Ally (yes the one that seems to have the most ads on television) and BBT (had to resubmit its documents to the Fed, which may have been the reason it failed based on a qualitative assessment, yet they did hike the dividend) fail the so-called Stress Test.  Many say the test was too easy with respect to capital ratios and loses anticipated in the event of disaster.

I'm not sure if the Fed used super computers or took wild guesses, but I can say right now nobody involved ever took Psychology 101. If there was a classic meltdown, the American public would have to come to the rescue again. Yes, too big to fail only became more problematic as the bigger banks have only increased in size and risk to the general public. I think the government was more concerned with finding ways to siphon money from banks than anything else.

Of course, that's the same story with all the mean industries.

Here's the scenario over nine quarters ending in 4Q14:

> Stock market plunges 50%
> Housing freefalls 20%
> Banks losses mount to $462 billion

But, all would be well, there would be mild runs by depositors, but those institutions would hold like pillars.

Yeah ... right!

There would be mass chaos and blood on the street. Heck, in 2008, the Fed funneled $1.2 trillion in loans to banks on the sly and only came clean after losing a court decision. The banks would crumble under a repeat of 2008-2009.

It's too soon to worry about the banks failing, but that stress test is bogus, and after they finish lavishing themselves with billions in stock buybacks and dividend hikes, we might get some lending to Main Street. Perhaps, as that needle moves, we could then start to watch the building of a feeding frenzy.

This whole thing was an exercise in blowing smoke, and I don't think the public is buying it. Sure, we'll all play the game and act stupid or suspend disbelief for the sake of not missing out the run up that would have to proceed such a devastating correction (think Dow 16,000), but do us a favor and stop the games and lend some money!

Okay ... Maybe the Apocalypse is near

I know they've been around for a couple of years, but this spring they will be everywhere- open toe boots!

Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.

Get the best of Townhall Finance Daily delivered straight to your inbox

Follow Townhall Finance!