As to be expected, discussions about the stress tests on the health of the 19 biggest US banks dominated the video airwaves during the past few days, with arguments ranging from whether the tests were necessary to whether they were stressful enough.

For the rest, Warren Buffett held his annual Berkshire shareholders’ jamboree - this year sharing both concern and optimism about the future. And as the nascent stock market rally is looking more tired by the day, the debate intensified on whether this was a “real rally”.

In addition to Buffett and the usual suspects of Tim Geithner and Ben Bernanke, commentators featured on camera in this post include Richard Bernstein, Bill Fleckenstein, Nouriel Roubini, Neel Kashkari, Alan Blinder, Russell Napier, Robin Griffiths and Meb Faber.

The selection kicks off with an item in lighter vein - a song entitled

Contrary to the prevailing analysis, we believe that the Obama and Bush administration insistence on protecting banks at the expense of the taxpayer is the result of a Machiavellian effort by Goldman Sachs and other major banks to influence U.S. economic policy by infiltrating the corridors of power.

Today, we duly note that Goldman Sachs has just hired former Barney Frank staffer Michael Paese to be its top Washington lobbyist. This position was formerly held by Mark Patterson, the current chief of staff at the Treasury.

Pease and Patterson are not the only ones to pass through the revolving door between Washington and Goldman. Bush’s Treasury secretary, Hank “The Hammer” Paulson is a former Goldman CEO. And his replacement, Tim Geithner, was mentored by Gerald Corrigan, a former New York Fed president and current partner and managing director of the Office of the Chairman of Goldman Sachs.

Who else was President Obama considering

The watchdog agency overseeing the Troubled Asset Relief Program (TARP) said Friday that the Treasury Department paid banks $78 billion more for assets than they were worth.

The Congressional Oversight Panel said the Treasury dispersed $254 billion for capital purchases of bank assets worth about $176 billion under the TARP program.

“The loss estimate is conservative,” said House Financial Services Committee member Rep. Alan Grayson, (F-Fla.). “It could turn out that those assets in the end are worthless.”

The $700 billion TARP program has been under scrutiny since it began in October because of a general lack of understanding of how the program is being run and where the money is going.

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Dear Value Seeker,

As I sit down today, President-elect Obama is making his way to Capitol Hill. (He’ll be President Obama by the time you read this.)

Obama campaigned on a message of change. His inauguration speech today in expected to focus on hope.

Unfortunately, hopes for banks are fading fast.

“Financial stocks clobbered,” reads a MarketWatch headline today.

Chaos in Britain’s financial system, along with more weak earnings from regional banks, dragged financial markets lower again today.

Neel Kashkari, who is running the Treasury’s TARP program, has written to 20 banks in receipt of handouts demanding monthly reports on business and consumer loans. Kashkari wants an “insight” into how the banks are spending taxpayers’ money.

What a good idea! Shame we had to throw $350 billion down the toilet before he thought of it…

Not that it

Another currency rally….  Bank of Canada cuts 75 BPS!…  A Santa rally?… What Asia thinks… And Now… Today’s Pfennig! OK… Another day of “healing” for the currencies, as the 1.29 handle was achieved and held on to in the overnight markets. Slowly… Like sand through the hourglass, these are the days of currency healing! HA! That show, Days of our Lives, was burned into my brain as a kid, as it was my mother’s fave soap.

The single unit was higher within the 1.29 handle overnight than it is right now, as it has given back a bit of ground on the news that a European Union Commissioner, Buti, said that, “economic indicators point

Another currency rally….  Bank of Canada cuts 75 BPS!…  A Santa rally?… What Asia thinks… And Now… Today’s Pfennig! OK… Another day of “healing” for the currencies, as the 1.29 handle was achieved and held on to in the overnight markets. Slowly… Like sand through the hourglass, these are the days of currency healing! HA! That show, Days of our Lives, was burned into my brain as a kid, as it was my mother’s fave soap.

The single unit was higher within the 1.29 handle overnight than it is right now, as it has given back a bit of ground on the news that a European Union Commissioner, Buti, said that, “economic indicators point

One of the few investment writers whose books I revisit frequently is Nassim Taleb, and I recommend ‘Fooled by Randomness’ as an accessible and amusing explanation of the misunderstood role of probability and randomness in markets and life in general. I first heard of him when he was profiled in a magazine as this oddball trader who was happy to continuously lose small amounts of money by placing out of the money puts on the markets, in expectation of periodic huge gains that would deliver profits by the dumper truck load. I immediately admired his tenacity and sheer self-confidence. When his first book, ‘Black Swans’ came out, I rushed to buy it. His strategy is one I have followed for much of this year and indeed last, very profitably. Taleb’s crucial insight was that the market systematically underestimated the probabilities of large negative price movements (so called ’six …

One of the few investment writers whose books I revisit frequently is Nassim Taleb, and I recommend ‘Fooled by Randomness’ as an accessible and amusing explanation of the misunderstood role of probability and randomness in markets and life in general. I first heard of him when he was profiled in a magazine as this oddball trader who was happy to continuously lose small amounts of money by placing out of the money puts on the markets, in expectation of periodic huge gains that would deliver profits by the dumper truck load. I immediately admired his tenacity and sheer self-confidence. When his first book, ‘Black Swans’ came out, I rushed to buy it. His strategy is one I have followed for much of this year and indeed last, very profitably. Taleb’s crucial insight was that the market systematically underestimated the probabilities of large negative price movements (so called ’six …

Welcome to the Fantasyland issue of The 5…“Shouldn’t worry about the deficit,” assures Barack Obama… “yes we can” keep spending. Can’t balance the budget of your dreams? Call the Treasury… Atlanta’s doing it. Gold still suffering… Ed Bugos’ future fantasies for precious metals stocks. Plus, no one immune to the great housing illusion… the infamous Neverland Ranch shuts its doors.

“We shouldn’t worry about the deficit next year or even the year after,” the U.S. president-elect Barack Obama said on 60 Minutes over the weekend.

We were afraid that Barack’s message of “change you can believe in” was going to make it harder to take issue with politics as usual in Washington. But now we see he already drank the Kool-Aid and we had nothing to fear but fear itself.

“The consensus is this, that we have to do

I just can’t make up my mind:  Is Hank Paulson committing premeditated murder of the U.S. economy, or merely negligent homicide?

Constant readers know I’ve gone back and forth on this:  In September I figured the bailout bill smacked of making things up as he went along.  But on Monday I took note of the phone conversation he had two months before Washington Mutual collapsed, in which Paulson told WaMu’s CEO he ought to sell out to JPMorgan Chase (NYSE:JPM) because his company was in big trouble.

I guess it’s possible Paulson knew bad things were going down, but he still didn’t know what to do about it.  And this morning, the making-things-up-as-he’s-going-along thesis seems inescapable.  I mean, really: The bailout bill was predicated on buying up toxic, er, um “troubled” assets.  Then in the middle of the game it became a hybrid of buying up “troubled” assets