Banks may need new stress test!
But the panel, headed by Harvard Law School professor Elizabeth Warren, noted that the stress tests assumed an average unemployment rate of 8.9 percent this year under the worst-case scenario. The unemployment rate for last month, however, climbed to 9.4 percent, meaning the assumptions by regulators might have been too optimistic.
BTW Warren seems to be running for treasury secretary or Fed Chairman.... or congress... or ...
2 comments:
Bernanke on 60-minutes Sunday (was a re-run from Feb) and he said the strongest sign of recovery will be when the banks are able "to raise capital", and they just did.
Sure, naysayers will point out that the capital was raised after the fudged stress test results were released, but the dodginess of the stress tests was the worst-kept secret on Wall Street. To a person, everyone who came on CNBC or wrote an opinion said that "all the banks would pass"... so the proof was in the fact that money did in fact flow into banks with their new common stock issues.
Not sure where we go from here, or if any of this is "actionable", but I found it interesting.
Warren does not seem overly ambitious-- if she were, she would get a better hairdo. When sho goes to Diane Swonk's hairdresser, then I'll buy your thesis. Since I'm being catty, Roemer needs to go on "What not to wear", too. She makes Janet Reno look like Jennifer Aniston. (Man, I'm bad, I know.)
Oh... I'd Say she is ambitious... probably deservingly so... but one always keeps in mind the Plight of Icarus.... that and her "oversight committee" has one of those committee that will not die... kind of feels... one of those things that will probably go on forever, and be one of those things the republicans hate about government... if that is a semi clear idea...
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