Kevin Drum Smackdown Watch

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The IMF says U.S. banks need $275 billion in new capital.  Tim Geithner says they need $75 billion.  Or, to be more accurate, that’s what I said the IMF and Tim Geithner said.  James Surowiecki says I got it wrong:

The confusion here is understandable, but this is a mistake….The Fed’s estimate, as seen in the stress-test results, was that, as of the end of 2008, the nineteen biggest U.S. banks required $185 billion in new equity. That number is now $75 billion because, over the last four months, via things like restructuring, asset sales, and Citigroup’s conversion of preferred stock to equity, the banks have raised around $110 billion in equity. But the apples-to-apples comparison is that the I.M.F. estimate was $275 billion, the Fed’s $185 billion.

The I.M.F.’s estimate, though, is for the banking system as a whole, while the Fed’s is just for the nineteen biggest banks. Those banks have about two-thirds of the banking system’s assets, so if capital needs are distributed proportionally, then the Fed’s estimate suggests that the banking system needs just about, yes, $275 billion — a number that’s identical to the I.M.F. estimate.

Can we please fix the economy so I can go back to writing about simple stuff like rescuing the healthcare system and keeping the planet from turning into a cinder?  Thanks.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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