Even if Ben Bernanke is right about the stress tests truly reflecting the “financial conditions” of the banks, it doesn’t matter much. Banks themselves are still worried that they won’t get paid back on old loans.

“The data we have are accurate reflections of the financial conditions of those banks,” says Fed head Ben Bernanke regarding the stress test results… Hmmm…

Bank of America may need $34 billion in government handouts, according to a leak to the press ahead of the official stress test results tomorrow. That’s strange, because we seem to recall Ken Lewis announcing on April 20 that “we absolutely don’t think we need additional capital.”

A Huge currency rally… The games people play now…RBA leaves rates unchanged…Brazilian real is the daily winner! And Now… Today’s Pfennig!

Bailout purgatory is bad for everybody, apart from the banks, their shareholders and their unsecured creditors. As Roubini points out, the government has been siphoning money into banks via capital injections, loan guarantees and financing with no strings attached.

Treasury Secretary Tim Geithner is taking his sweet time to work out the details of TARP II.  But for all the uncertainty surrounding his plans, we know one thing:  Zombie banks will not be allowed to go under.

Corporate earnings will take center stage again this week as certain financials hope to follow last week’s upbeat announcement by banking giant Wells Fargo & Co. (WFC) with some decent earnings reports of their own.

As you may have figured out, these Taipan Daily missives are (usually) written the day before. That way they can hit your inbox in time for a read with the morning coffee.

It’s called the “Shadow Fed.” And it’s the next potential hot spot in the ongoing financial crisis. But few outside the Federal Home Loan Bank system, the Federal Deposit Insurance Corp. (FDIC), the U.S. Federal Reserve and the U.S. Treasury Department are remotely aware of the problems that are smoldering.

Treasury Secretary Tim Geithner is taking his sweet time to work out the details of TARP II.  But for all the uncertainty surrounding his plans, we know one thing:  Zombie banks will not be allowed to go under.