FARK.com: (6757931) Fed testing to see if banks can withstand 13 percent unemployment and an 8% drop in GDP. This is only a test

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		Fed testing to see if banks can withstand 13 percent unemployment and an 8% drop in GDP. This is only a test (finance.yahoo.com)		41
		More: Unlikely, Federal Reserve, stress tests, GDP, bank holding companies, SNL Financial, risk aversion, European debt crisis, capital ratios

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41 Comments (+0 »)

TheAlgebraist

2011-11-23 03:40:55 PM

Good idea. If that happens, the banks will be the first ones we need to help out!

Bschott007

2011-11-23 03:51:48 PM

What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

beta_plus

2011-11-23 03:57:44 PM

Maybe they should try actually making sure they're doing proper due diligence on their loans.

A friend of mine had a great line for these stress tests
"It's like preparing for an invasion from mars while termites are eating your house"

meat0918

2011-11-23 03:59:11 PM

Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

This time, they'll end up nationalized.

Bschott007

2011-11-23 04:00:46 PM

meat0918: Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

This time, they'll end up nationalized.

So...SOCIALISM!

/i kid

GaryPDX

2011-11-23 04:02:08 PM

Fed testing to see if banks can withstand ~~13 percent unemployment and an 8% drop in GDP~~ the collapse of Europe. This is only a test

FTFY

Suede head

2011-11-23 04:19:32 PM

Eh. Just start another war to stimulate the economy. Nothing like dropping bombs on some bewildered third-world peasants to get the money circulating.

ThisKidsAlright

2011-11-23 04:41:26 PM

Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

How about the over/under that the conditions of the hypothetical test become reality, before the results of the test are even published?

DrippinBalls

2011-11-23 04:46:07 PM

I would LOVE to see a 13% standard unemployment. Bring it.

/friday, black friday, lovin' it on black friday.....
//just a little worm.

enry

2011-11-23 05:02:01 PM

beta_plus: Maybe they should try actually making sure they're doing proper due diligence on their loans.

A friend of mine had a great line for these stress tests
"It's like preparing for an invasion from mars while termites are eating your house"

The Martians are patient and will strike when you're vulnerable, termites or no.

HellRaisingHoosier

2011-11-23 05:17:14 PM

GaryPDX: Fed testing to see if banks can withstand the collapse of Europe. This is only a test

FTFY

At least a collapse of the Euro.

All Latest

2011-11-23 05:18:35 PM

meat0918: Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

This time, they'll end up ~~nationalized~~ chinese.

ZAZ

2011-11-23 05:20:41 PM

This has been a test of the emergency bailout system. In the event of an actual collapse you would have received instructions on where to go, what to do, and which neighbors have stocked up on canned goods.

meat0918

2011-11-23 05:21:04 PM

All Latest: meat0918: Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

This time, they'll end up nationalized chinese.

Nah, China's teetering on the brink as well.

Not enough internal consumption to maintain employment without rest of the world buying goods from them, inflation is getting out of hand, and they've got a real estate bubble about to pop.

Who's up for a game of dominoes?

Bschott007

2011-11-23 05:25:56 PM

ThisKidsAlright: Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

How about the over/under that the conditions of the hypothetical test become reality, before the results of the test are even published?

Touché

FlashHarry

2011-11-23 05:39:58 PM

hmmm... they must be preparing for a republican sweep next november.

AngryDragon

2011-11-23 05:46:16 PM

TheAlgebraist: Good idea. If that happens, the banks will be the first ones we need to help out!

Done in one.

ddam

2011-11-23 06:21:32 PM

I like this... job security for me :D

Virulency

2011-11-23 07:09:19 PM

oh man will that cut into their profits this time??

abb3w

2011-11-23 07:25:21 PM

meat0918: Who's up for a game of dominoes?

I think a game of fifty-two-pickup is more suitable.

www.anunews.net

struct

2011-11-23 07:34:27 PM

Um, isn't this good? Don't we kind of want our regulators to actually do some regulation on our financial institutions? (The ECB failed to do these in a complete manner and look where that has gotten them).

epyonyx

2011-11-23 07:40:23 PM

Isn't there a flash game for that?

Ken VeryBigLiar

2011-11-23 07:42:43 PM

struct: Um, isn't this good? Don't we kind of want our regulators to actually do some regulation on our financial institutions? (The ECB failed to do these in a complete manner and look where that has gotten them).

It isn't bad they would like to see how we'd do- the bigger question is why is the test being proposed to the limits they're proposing in the first place.

/Learn to shoot and get physical silver and gold if you're listening to the more hardcore people out there.

Pumpernickel bread

2011-11-23 07:43:25 PM

tarkus1980

2011-11-23 08:32:02 PM

This is really not as big of news as it seems. Banks do stress tests all of the times.

Goodfella

2011-11-23 09:59:41 PM

The stress tests they run are a joke. And if they can't pass them they nerf them or just straight up hand out exemptions.

If they were actual stress tests none of those clowns would pass. Its hard to pass a stress test when you are insolvent.

Kuroshin

2011-11-23 10:14:08 PM

Suede head: Eh. Just start another war to stimulate the economy. Nothing like dropping bombs on some bewildered third-world peasants to get the money circulating.

Didn't work the last three times...

Incontinent_dog_and_monkey_rodeo

2011-11-24 01:15:32 AM

We won't really see the stresses until they require mark-to-market accounting again. None of the tests addresses the current fantasy accounting used by the big banks.

sendtodave

2011-11-24 02:47:24 AM

meat0918: All Latest: meat0918: Bschott007: What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

This time, they'll end up nationalized chinese.

Nah, China's teetering on the brink as well.

Not enough internal consumption to maintain employment without rest of the world buying goods from them, inflation is getting out of hand, and they've got a real estate bubble about to pop.

Who's up for a game of dominoes?

So, the US is farked, Europe is farked, China is farked... Hmm.

Well, at least the third world is as stable as ever.

BigBooper

2011-11-24 05:43:53 AM

sendtodave: Well, at least the third world is as stable as ever.

I still have a crisis in the middle east and the resulting spike in oil prices being the first domino to fall.

Regardless of which one goes first, each domino that falls will make things that much worse for every one else. 13% unemployment and an 8% drop in GDP is not a worse case scenario. It just the appetizer for the shait sandwich we're all going to be eating.

On the other hand, while things will suck mightily, the whole Mad Max style total collapse of society is about as likely as a zombie apocalypse. Just be prepared for greatly reduced governmental services, multiple generations living in one residence, and a beans and rice style diet. You know whole generations of Americans lived like that, and survived just fine without cable TV, high speed internet, and a car+ per driver in a household.

MisterRonbo

2011-11-24 06:01:09 AM

BSchott007

What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

Around zero. Under Dodd-Frank - one of those things that the Democrats got done while they had control of the House, and which that supposedly Wall Street friendly Obama signed - there are no more bank bailouts.

There is a resolution process, which has some options. Under every scenario, stockholders and bondholders take the losses. The options come down basically to liquidation; separating in to a "good asset" bank that gets sold to another bank and a "bad asset" bank to that winds down with losses, with the "good asset" bank being sold off either in pieces or in whole; or the bank sold to multiple buyers by breaking it up, most likely along operational unit or product lines.

All in all, a great piece of legislation. Now if we can just get a decent implementation of the Volcker rule - I know, not likely, but possible - we might have a banking system as sound as before the repeal of Glass-Steagall.

sendtodave

2011-11-24 06:44:13 AM

BigBooper: It just the appetizer for the shait sandwich we're all going to be eating.

Happy Thanksgiving, everybody!

BigBooper

2011-11-24 06:54:13 AM

sendtodave: Happy Thanksgiving, everybody!

Thanksgiving? What's that? I'm already shopping on-line, and I'll be at stores in a few hours! Sure my credit cards are all maxed out, but I just got approved for several store credit cards. Happy Consumer day everyone! Spend! Consume! Obey!

sendtodave

2011-11-24 07:07:01 AM

BigBooper: Sure my credit cards are all maxed out, but I just got approved for several store credit cards.

Will debts be absolved in the new third world order?

If so, I could use a new TV.

AcneVulgaris

2011-11-24 08:04:52 AM

winterwhile: its the complete failure of Obama test

geeeeeeeeeeeeeeeee can he pleae quit now????????

He's not Palin, after all.

moel

2011-11-24 09:04:35 AM

This all seems completely bizarre to me. We ended up in a shiatty situation, and your telling me that it could all have been avoided by doing a bit of simple maths labelled as a 'test'

Seriously, if banking were a manufacturing industry it would have ceased trading years ago...

Hey Brad, I've had a brilliant idea, we should sell razor blades to Children as a toy

Wouldn't it be a good idea to like maybe do a bit of market research, and test to check it's safe for the children?

Nah....what could possibly go wrong? Absolutely no need to do any testing, just buy them, repack them and then sell them.

AcneVulgaris

2011-11-24 09:57:49 AM

MisterRonbo: BSchott007

What is the over/under on how soon this study used by the banks to beg for another bailout to avoid this possibly happening?

Around zero. Under Dodd-Frank - one of those things that the Democrats got done while they had control of the House, and which that supposedly Wall Street friendly Obama signed - there are no more bank bailouts.

There is a resolution process, which has some options. Under every scenario, stockholders and bondholders take the losses. The options come down basically to liquidation; separating in to a "good asset" bank that gets sold to another bank and a "bad asset" bank to that winds down with losses, with the "good asset" bank being sold off either in pieces or in whole; or the bank sold to multiple buyers by breaking it up, most likely along operational unit or product lines.

All in all, a great piece of legislation. Now if we can just get a decent implementation of the Volcker rule - I know, not likely, but possible - we might have a banking system as sound as before the repeal of Glass-Steagall.

Lovely idea. I doubt it will be enforced, though. Guess we'll see soon enough.

Benni K Rok

2011-11-24 03:05:34 PM

GaryPDX: Fed testing to see if banks can withstand 13 percent unemployment and an 8% drop in GDP the collapse of Europe. This is only a test

FTFY

I can see that too, followed up closely by the US, then the Middle East, and China very shortly thereafter.

Bennie Crabtree

2011-11-25 12:38:35 AM

Benni K Rok: GaryPDX: Fed testing to see if banks can withstand 13 percent unemployment and an 8% drop in GDP the collapse of Europe. This is only a test

FTFY

I can see that too, followed up closely by the US, then the Middle East, and China very shortly thereafter.

No way man, China is totally developing Africa! They've invested wisely!

dforkus

2011-11-25 07:56:07 AM

Let's just cut to the chase and get a nice big war going with Iran.

Just the kind of Keynesism we need.

Benni K Rok

2011-11-26 02:41:36 AM

Bennie Crabtree: Benni K Rok: GaryPDX: Fed testing to see if banks can withstand 13 percent unemployment and an 8% drop in GDP the collapse of Europe. This is only a test

FTFY

I can see that too, followed up closely by the US, then the Middle East, and China very shortly thereafter.

No way man, China is totally developing Africa! They've invested ~~wisely~~ to get rid of as much money as possible to delay their crash!

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