Roosevelt Institute Fellow Mike Konczal explains why stress tests for the major banks have been all show and no substance.

Three things happened in a row yesterday: (1) Two positive profiles of Timothy Geithner (New Yorker, and The Atlantic) came out, both working under the assumption that the stress tests of last year worked. (2) Shahien Nasiripour had a comment about principal write-downs walked back on him by Treasury: "Treasury is NOT poised to roll out a major principal write-down program. As the [official] said, we are looking at a number of tweaks to existing programs to help reach more borrowers."�

(Are you reading Shahien's work? You should, he's doing great work on financial issues; he was the one who caught the modifcations -> 70% more underwater issue. Here's...