Felix Salmon wonders "who would be so foolish as to leak these things?" But this seems an inevitable result of Treasury's decision to delay the results so banks can argue "for a more lenient approach." (The fact that we know this is a pretty staggering leak in and of itself.) As Brad DeLong argues , that's bad optics. "The banks should not be negotiating with the government over this." More to the point, the government , at this juncture, should not be negotiating with the banks. But it's more than bad optics. Now the stress tests have a range of potential outcomes and various actors will take to the press to make their favored outcome more likely. Which is exactly what's happening. Bank of America has denied that it needs more capital. "People familiar with the matter" have leaked that Bank of America in fact needs more than $10 billion. And so on. It's a bit like Gov. Paterson's dumb decision to consider Caroline Kennedy but leave ample time for her supporters and opponents to try...

James Surowiecki does a nice job making a point I've been hearing occasionally. Most bubbles leave the country with something of worth. The tech bubble, say, gave the country the tech sector. The initial enthusiasm leaves the country with a bit of a hangover, but you've still got a pocket of phone numbers from the night before. It was worth it . This is all very predictable in mathematical simulations: Economic changes almost always produce bubbles. The weird thing about the housing bubble is that it was effectively worthless . Surowiecki explains : There have been three big banking booms in modern U.S. history. The first began in the late nineteenth century, during the Second Industrial Revolution, when bankers like J. P. Morgan funded the creation of industrial giants like U.S. Steel and International Harvester. The second wave came in the twenties, as electrification transformed manufacturing, and the modern consumer economy took hold. The third wave accompanied the information-...

I'm a little bit loathe to enter this subject because I'm finishing up an article on a related topic. But suffice to say that even though the data on whether being healthier would make health care cheaper is pretty mixed, we can still be pretty sure it's a good thing. Paul Campos offers the standard argument against assuming that better health means lower costs: Not smoking makes you healthier. But refusing to die young makes you more expensive because you have more time to develop Alzheimer's after you've already developed diabetes. Ergo, not smoking does not make you cheaper . Dying young makes you cheaper. True enough. On the other hand, not being obese probably does make you quite a bit cheaper. The thing about chronic illnesses like diabetes is they require a lot of upkeep . It's not like dropping dead of a cardiac arrhythmia. It's frequent, sustained, and costly stays in hospital rooms. And as we get better and better at keeping diabetics and heart disease patients alive, they...

"I did not say I would be a loyal Democrat," insisted Arlen Specter on Meet the Press. "I did not say that." And it's true, he didn't say that. But people about to compete in a Democratic primary in a blue state tend not to spend a lot of time trumpeting what loyal Democrats they aren't. It's a pretty simple principle. Lots of guys are bad, inattentive, boyfriends. But they don't announce it on the first date. Meanwhile, Congressman Joe Sestak -- a Blue Dog Democrat, to be sure, but still a recognizable Democrat -- has $3 million in the bank, booked a meeting with Andy Stern over the weekend, and made the rounds on Firedog Lake. He's been pretty clear about his intention to primary Specter. Which makes Specter's continued declarations that he's a not-loyal Democrat who will not support Democratic priorities like a public insurance plan and card check and the president's budget all the odder. Specter is facing a primary filled with Democratic voters who have spent a good chunk of their...

The administration is expected to release the results of the stress tests this week. According to David Leonhardt, no banks will be judged insolvent. But some will be judged insufficiently capitalized. In other words, sick, but not dead. And the Obama administration means to heal them without returning to Congress. One of the ways they'll do that is to encourage quick payback of taxpayer money from those banks that aren't underwater: Banks that are deemed to be healthy would be given the chance to repay the money they borrowed from the government last year if they met certain conditions. The conditions could include showing that they would still be healthy after the repayment; could issue long-term unsecured debt without government guarantees; and could raise money in equity markets. Repayment would allow the Treasury to reuse the money to help weaker banks. It certainly appears to be the case that Congress's skepticism towards further TARP appropriations has generated a lot of...

• Ben Nelson comes out against a public plan. Will try and lead a group of Democratic senators to do the same. • Time for bank creditors to share the pain? • Warmer weather makes people believe in global warming. • Condi Rice denies torture, condescends to college kids.

Noam Scheiber has an interesting story in this week's New Republic tracking the effort by the banks to screw over the professional investors. The very short summary is that the banks wanted a "safe harbor provision" that would give them legal immunity from investor lawsuits if they modified mortgages. This has, in turn, generated a massive counter-lobbying campaign from the hedge funds and other types of investors. "Think of the new dynamic as a kind of Iran-Iraq war come to Capitol Hill," writes Scheiber. "Where there are no obvious good guys, the next best thing may be two powerful rivals beating each other to a pulp."