Looks like most of those problem big banks now pass the “stress test” (here is a Bloomburg write-up on this). While some might think of this as a result of hard work I suggest something much different – basically these big banks are cutting back on being lending and savings banks for individuals, small and middle sized companies and are just becoming a money operation for the US Federal Debt with some side bets on big corporate international business. Bloomburg again provides some backing for this ideas with “Banks Buy Treasuries at Seven Times Pace in 2011“. Since the Fed will lend these banks money at nearly 0% to buy Treasuries that pay 3% it looks great now and makes them easy and safe profits paid for by the taxpayer and savers of every sort. I bet the “stress test” assumed that Treasury Bonds would be worth as much as they are today. Of course if there was either high inflation or a world recovery in real businesses that attracted capital those holding could lose a lot of value – but we assume this won’t happen. In any case we see these big banks rewarded for doing less banking that requires any hard work and might help the general economy. These old school activities are more and more a front for club of about 20 people who can create dollars-debt at will which seems to be just fine for a US government that can’t even cut 1% of a budget that has doubled in a decade. P.S. Expect more of the same.