The financial crisis has officially moved from tragedy to farce. Via Calculated Risk we are directed to a Bloomberg News report telling us the Treasury Department is denying a blogger's claim that a leaked copy of the stress test results reveal that 16 out of 19 of the nation's top banks are technically insolvent.
I suppose that the assertion could be true. The blogger in question, however, happens to be Hal Turner, a notorious white supremacist and anti-Semite. This is a guy so crazy that, according to his Wikipedia entry, even Sean Hannity has been forced to disown him. In other words, he is not the kind of trusted source we would normally look to for information on the financial crisis.
I really don't know what is more amazing: The fact that Turner's blog post is actually given credit for contributing to the sharp downward swing in the U.S. stock market on Monday, or that the Treasury Department felt it had to respond to the ravings of a man who drops bombs like "Instead of fighting Muslims, we Christians should be rounding up jews and killing them here in America" as if they were confetti.
The one thing we can learn from this is that the current state of tension in financial markets over how the government will resolve the banking crisis is so fraught with fear and terror that any assertion, posted anywhere, is immediately treated as the gospel truth by a not insignificant number of readers. Combined with the Internet's facilitation of "news" transmission, there is now an unlimited supply of potentially destabilizing factoids, real and false. This does not necessarily strike me as a sign of progress.
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