As reported by the New York Times, most of the big banks passed the so-called "stress tests" administered to them by the Federal Reserve.
Developed in the wake of the financial crisis, the examination is intended to assess how banks will fare under weak economic conditions. The Fed looked at whether banks would have enough capital to weather a peak unemployment rate of 13 percent, a 21 percent drop in housing prices and severe market shocks, as well as economic slowdowns in Europe and Asia.
Given the success of the tests on assessing the health of the nation's largest banks, various other institutions decided to embrace the model. Here are some early results.
Markets Surprised by Bill Simmons' Stress Test Outcome
Friends of Bill Simmons were just as surprised as he was when data from the Federal Reserve revealed that his relationship with Julie Lasker failed their stress test.
The couple had been going out since 2011Q2 and going into the stress test, Bill spoke confidently to friends of solid reserves of trust, listening/sharing skills, and satisfying relations in... um... all areas. Markets were particularly confident following recent quarterly reports wherein Bill alluded to "three little words" having been said by both sides of the merger.
The Fed's test, however, proved surprising rigorous. Simulations included subjecting Julie to Bill's:
- Not listening to her as she described work-related conflicts
- Favorable allusions to his last girlfriend
- Buying her big earrings when she likes small ones
- Repeatedly leaving the toilet seat up
Despite earlier reports regarding the stability of Bill and Julie's relationship, reserves proved inadequate for Julie to withstand the full spate of stressors administered by the Fed. Neither could be reached for comment but late trading suggested friends are divesting shares in the couple, or at least in Bill.
Cute Kitten Fails Stress Test -- Will Likely be Returned to Shelter
The children of DC-based economist Jared Bernstein were stunned to discover that their new little black kitten, Ivy, failed her stress test and may be headed back to shelter from which they adopted her only weeks ago.
Bernstein reported that the he was unable to give the kitten passing grades under stressful simulations including:
- Continuing to get kick her nasty litter outside the box and all over the floor of his bathroom
- Running around like a banshee at midnight and biting his toes through the blanket whenever he even slightly wiggles them
- Lightly scratching his face at 6:30AM when she wants to be fed
- Running off with those nice little earbuds he keeps on his nightstand
The children's shock at the failure was compounded by their claim that Bernstein appeared to love the little scamp, often, according to them, talking to it in a cutesy voice.
"It's true," Bernstein admitted, when reached for comment. "I continue to love little Ivy and we will all miss her. But the stress test has enabled me to test the depth of that love and it turned out to be shallower than I'd thought."
President Obama Squeaks Through Stress Test With His Base
In a widely anticipated result that was too close a call for markets to accurately price, the American left gave President Obama passing marks in a stress test designed to test just how far he could push them.
"It was touch and go, but we had to consider the alternative" said the Left, following release of the test results. Simulations included:
- Press briefings where the President taunts enviros with charts about all the oil and gas this administration has drilled and fracked
- Inviting Occupy Wall St. representatives to a White House summit on income inequality, wherein he announces another round of bail outs for the banks
- Schmoozing with Wall St. fat cats to fund his Super Pac
- Pivoting back to deficit reduction, praising Europe for their austerity measures, and telling American families how the government's got to tighten its belt in hard times, just like they do.
While some members of the professional left argued for failing the President, a majority of others pushed back, at which point the first group splintered off and formed a new movement disavowing any association with their former comrades.
This post originally appeared at Jared Bernstein's On The Economy blog.
Dan Glickman: Looking Into the Future: Super PACs and Congress
More egregious, to the point of treason, is the granting of money driven control of Washington to NON-CITIZEN, UNTAXED interests buying away tax responsibilty, outsourcing, offshoring, AND AGENTS OT TO DEFUND AND FURTHER WEAKEN OUR PROTECTIONS OF COUNTRY AND PERSONAL PROPERTY.
WE ARE, considering other options besides a property pirating, perpetuated capitulation, to Wall St.
We need individuals that have the constitution to, and that can and will define the embedded lecherous despots, that have their claws on this great country.
I pray GREG SMITH will be invited to the White House. Immelt and Dimon have worn out there welcome, FOR US.
Did you Pay the Credit Cards, Honey ?
FY 2013 looks grim for the Federal Government.
Be careful out there !
Nope. I flunked.
And gleefully approving another $1.3T or so in additional debt that Sasha and Malia (and their kids) will have to pay, thus going without many essentials in the process.
Yes, sir, Mr. President, you passed that stress test. They love you on Main Street.
Economist Mike Kimel notes that the five former Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country’s indebtedness..
frm wiki
http://www.theatlantic.com/politics/archive/2011/07/the-chart-that-should-accompany-all-discussions-of-the-debt-ceiling/242484/
Causes of change in Federal spending as % GDP 2001–2009 from CBO Data
Causes for Changes in CBO Forecasts.According to the CBO, the U.S. last had a surplus during fiscal year (FY) 2001. From FY2001 to FY2009, at the height of the Global Financial Crisis, spending increased by 6.5% of GDP (from 18.2% of GDP to 24.7%) while taxes declined by 4.7% of GDP (from 19.5% of GDP to 14.8%). Spending increases (expressed as % of GDP) were in the following areas: Medicare & Medicaid (1.7%), defense (1.6%), income security such as unemployment benefits and food stamps (1.4%), social security (0.6%) and all other categories (1.2%). Revenue reductions were individual income taxes (−3.3%), payroll taxes (−0.5%), corporate income taxes (−0.5%) and other (−0.4%).
The 2009 spending level is the highest relative to GDP in 40 years, while the tax receipts are the lowest relative to GDP in 40 years. The next highest spending year was 1985 (22.8%) while the next lowest tax year was 2004 (16.1%).[33]
The Federal Reserve: History of Lies, Thievery, and Deceit
http://www.scionofzion.com/federalreserve.htm
Since you have more connections In DC. If you could do some digging on why The 1935 Supreme Court Ruling on "Congress" and Article 1 Section 8 to the "FED " Known as the Federal Reserve Act of 33... Has never been upheld????? ;-)
Thomas Jefferson, Andrew Jackson, Abraham Lincoln and James Garfield had the key to America's prosperity. Unfortunately, they were never allowed to unlock the Federal Banking door for the peoples best interest. It is only a matter of time (and interest owed) until the America we know is changed forever.
You forgot to include "leaving the cap off the toothpaste" in Julie's stress test about Bill. Too bad those "three little words" didn't save the merger! But Bill deserves all the divestiture coming his way!
Do re-think your decision to return Ivy to the shelter though. You know you love that kitty. She'll come around. Give her some time. :)
As for Obama's stress test by his base, well, it was inevitable, in light of all that has transpired over the past three years. But the result was pretty much a foregone conclusion. Yes, the left felt hurt and abandoned because of certain actions by the WH, and they had to have their grieving time period. But they have since realized that governing and campaigning tend to be light years apart most of the time, and have therefore decidedly come to the only logical conclusion we know: In November 2012, the alternative to Obama WOULD be unthinkable.
But let's really talk elections, shall we? Ron Paul is now running to pave the way for his son Rand to jump in the presidential race somewhere down the road - 2016 perhaps? 2020? At this point Ron Paul is running just to make a statement, but he knows full well he is not getting his party's nomination, much less winning the general election. And that is just a fact.
We had none of those conditions in 2008 and we had to bail out the Banks so what has changed in the last 4 years? - nothing - the same game is still being played. I would like to see some independent forensic accountants conducting these 'stress tests' and not the Federal Reserve - that's just like having my brother assessing my sister.
Yes, I know thye are not perfect.... but by the way when the stress test were being done un-employment was over 10%^ an housing prices in my area were donw 30% by 2007 and 60% by 2009-2010.
Morgan, Citi, BofA and Chase own 95 % of all mortgage derivatives.
When a customer comes into my business, whether it be government or private, its impact on my business is the same....I dont ask the government customer to pay more becuase his spending is less positive on my business.
What impacts an economy is not who spends the money, but on what.
And of the private sector is going to buy more imported goods, then government spending f more dpomestic will be better and it depnds on what is bought, militay spending low multipleir, infrastructure, research, funding startups very high multiplers.. especially MFG..the highest economic and jobs multipler.
Regards