By MICHAEL GRAY

Wells Fargo’s pre-announced earnings gave a sunny side of the street view without mentioning with any clarity what resides on the debit side of the ledger and how much will be needed to cover those losses.

Treasury is telling the banks not to comment on the stress test results only adds to the mocus view of the biggest banks.

The plan from Treasury –– I believe –– is that by May 1st all the big banks will be in a capital-raising mode. The purpose of the raise will be withheld from investors, whether it is to repay TARP loans or to boost capital levels to support lower valuations on the balance sheets.

This is the flip side of the tact that every bank is taking TARP money from last year, so the Street will not know which bank really needs the money.

I look for this week’s bank earnings to take the market lower, despite earnings being higher from the AIG covert capital boost through favorable terms in the unwinding of swaps in Jan. and Feb.

But the writedowns –– despite mark-to-mayhem changes –– will still outweigh earnings. All the banks will fall into this scheme for the next three quarters at least and when TARP repayment is put into the equation, capital raises of $30B to $50B will be needed to make them whole.

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