Didn’t Bernanke also recently lean on BoA CEO Ken Lewis to commit securities fraud by not declaring losses at Merrill Lynch prior to its takeover by BoA? We appreciate that Gentle Ben is just doing his job and all. But does he really think we’re going to trust him following the Merrill-BoA episode?

We don’t believe a word Bernanke says about the economy… or about banks. As NYU economics professor Nouriel Roubini put it recently, the stress tests (or “fudge tests” as he calls them) aren’t worth the paper they’re written on. They’re meaningless, because they have been reverse engineered to create positive results. Here’s Roubini on the subject:

If you look at the actual data today macro data for Q1 on the three variables used in the stress tests – growth rate, unemployment rate, and home price depreciation – are already worse than those in U.S. government baseline scenario for 2009 AND even worse than those for the more adverse stressed scenario for 2009. Thus, the stress test results are meaningless as actual data are already running worse than the worst case scenario.

Nassim Nicholas Taleb, a scholar of risk and chance at Polytechnic Institute of New York University, author of The Black Swan:

The Impact of the Highly Improbable: “This stress test is the equivalent of testing the Brooklyn Bridge by running a single heavy truck on it.”

Thirty-four billion dollars is hardly pocket change. So it seems odd that Lewis would have miscalculated BoA’s capital requirements by such a wide margin. Of course, Ken made this bold claim ahead of BoA’s 1Q results. Maybe he just got a bit confused. Or maybe he just didn’t want to tell the truth to investors, who would naturally take fright at such an admission.

According to research by Bailout Nation author and underground investor Barry Ritholz, the amount of capital the bank now suddenly needs to save it from insolvency is roughly a third the cost of the Marshall Plan, which in today’s dollars cost $115.3 billion.

This guy should be locked up for repeatedly lying to investors. Failing that, someone should at least slash his tires. He represents the worst of corporate America. And, boy, does he face some stiff competition…

We all have a tough time conceptualizing large numbers. As Nobel Prize-winning physicist and Richard Feynman put it, “There are 10^11 stars in the galaxy. That used to be a huge number. But it’s only a hundred billion. It’s less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.”

This has been doing the rounds for some time. But in case you forgot how much the bailouts are costing America in real terms, here’s a quick reminder. (If you’ve seen this list before, we apologize. If you haven’t, we hope you’re sitting down.)

In inflation-adjusted numbers, the recent economic crisis has cost taxpayers more than twice all of these big budget government expenditures combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

We have this crazy, old-fashioned idea that shareholders actually own public corporations – not management teams and certainly not the government. We believe the owners of a business have the right to decide whether or not to go forward with important changes to the capital structure – like mergers and acquisitions. It is, after all, their property. So when Bank of America’s management team decided to buy Merrill Lynch despite Merrill’s enormous $15 billion fourth-quarter loss and its decision to accelerate billions worth of employee bonuses, we think Bank of America’s rightful owners should have been appraised of these significant developments before shareholder vote.

You probably heard what happened instead: The government leaned on Ken Lewis to keep quiet about Merrill’s losses. And he caved. Then in a move of utter cowardice, Ken Lewis tried to blame the affair on Merrill’s former CEO. We hope shareholders sue the government for tortuous interference with the contract. They’ll win. We hope Ken Lewis goes to jail for securities law violations – for which he is clearly guilty. We hope Bank of America’s rightful owners will one day have their property returned to them. So I guess you could say we’re on the side of property owners and against the endless number of leeches who try to con, steal, and muscle in on them.