Rumpole

Most Banks Will Pass, But Does the Stress Test Fail?

"...the only alternative is for the government and banks to somehow "muddle through". This is the real purpose behind the Stress Tests, PPIP and the changes in the FASB rules and the hope is that with enough distractions and obfuscation the problem will heal itself."
Never a truer word written!
Tell me something, if instead of pumping trillions into the banks directly, if the government would have put it into the hands of home owners who were in trouble, wouldn't it have largely solved the problem from the outset? After all, the home owners would have used it to keep paying their mortgages and staying in their homes, the smaller banks and mortgage companies would still have money coming in and the mortgages they securitized would have kept their value better and the larger banks wouldn't have faced the crunch brought on by plummeting mortgage securities values?
Would have this approach been so bad in light of the current situation?