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After Repeated Facts Presented That Stress Tests Are Scam, Europe Relents To Disclose Testing Methods, Even As Tests Still Remain A Scam

Tyler Durden's picture




 

It appears that constant badgering by fringe skeptics that Europe's stress tests are the dumbest thing since, well, our own "stress tests", has prompted European banking regulators to divulge just what the methodology of said testing will be tomorrow, ahead of the result announcement on July 23. According to Reuters: "The Committee of European Bank Supervisors (CEBS)
will on
Wednesday outline the methodology of a stress test that
simulates the impact of a severe economic shock on about 100
banks in the euro zone and other countries, sources close to the
process said." The reason: "
The move, agreed last week, comes as speculation
mounts that
national authorities and bankers are massaging the test design
to make sure their systems fare well, potentially undermining
the regulators' goal to boost confidence in the banks." And because lying within the confines of a set of parameters has never happened before in Europe (well, except for those Goldman facilitated currency swaps with Greece and Italy, and the whole Eurostat scandal) this is supposed to make everyone fully convinced that Europe will for once be fully honest and upfront with everyone.

More from Reuters, highlighting just how transparent the stress test will be:

In a sign of political influence, three sources
said that
CEBS may not publish a list of the participating banks because
it was still not finally decided which German banks would take
part.

Yes, the credibility builds...

The results of the stress tests, including data
for all
individual banks, are due to be published on July 23. It will
include around 100 banks in the euro zone and Great Britain,
Sweden and Denmark, sources have said.

Surely, Spain's Cajas will be test too...

"If every bank passes the test, the stress wasn't
sufficient, the markets will say," said one senior banker who
like the other sources for this story required anonymity.
"Therefore some banks won't pass the test."

Oh, so it is a farce... and unless it isn't, the dominos will start falling... hmm what to do...

Bank of France Governor Christian Noyer and Sweden's financial watchdog joined peers from Germany, Spain and Austria on Tuesday in saying that everything was fine with their country's banks in the stress test.

But "selective leaks" worked miracles with Wells and Citi... why not in Europe???

While no stress will be applied to German bunds, the stress on sovereign bonds of the southern European countries will be substantial, a source close to the matter said.

Thank heavens the ECB owns them all at this point.

Discussions with German authorities are also still not concluded about the exact number of German banks that will take part in the test.

"We might see NRW bank dropping off the list," a source close to the matter said, adding this would leave Germany with 15 banks taking part.

Yes, it will be unselective, and fully comprehensive.

Altogether, another epic win for transparency and no manipulation.

 

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Tue, 07/06/2010 - 15:53 | 455176 Ripped Chunk
Ripped Chunk's picture

That will fix those critics!

Tue, 07/06/2010 - 15:59 | 455205 hedgeless_horseman
hedgeless_horseman's picture

Probe the proctors.

Tue, 07/06/2010 - 16:11 | 455235 Mitchman
Mitchman's picture

Procto the probers.

Tue, 07/06/2010 - 16:00 | 455211 OutLookingIn
OutLookingIn's picture

 

Stress Test:

Okay stand up. Thats alright - remain sitting. You pass. Just don't fall out of your chair!

Tue, 07/06/2010 - 16:03 | 455216 jkruffin
jkruffin's picture

And a 50 point move up in the last 5 mins at the close to boot!  They really expect people to invest in this shit market the way its being run? 

Tue, 07/06/2010 - 16:09 | 455231 homersimpson
homersimpson's picture

Absolutely positively 100% fraudulent. How much taxpayer cash did the Fed burn in today's last 10 mins? Nice ramp up job.

Tue, 07/06/2010 - 16:13 | 455243 bada boom
bada boom's picture

This might apply,

"Better to remain silent and be thought a fool than to speak out and remove all doubt."

Lincoln, Twain, or ?


Tue, 07/06/2010 - 16:17 | 455257 firstdivision
firstdivision's picture

Bernanke

Tue, 07/06/2010 - 16:39 | 455321 carbonmutant
carbonmutant's picture

It's not going to look good if they reference "Turbo Timmy" as a source for their methodology...

Tue, 07/06/2010 - 16:41 | 455325 trav7777
trav7777's picture

If the stress tests were worth shit, the Fed wouldn't have had to step in and buy all these guys' toxic garbage bonds.  Who the fuck do they think they're foolin?

Tue, 07/06/2010 - 16:48 | 455345 ratava
ratava's picture

upfront and honest sure worked out well for our pension funds buying toxic shit

Tue, 07/06/2010 - 16:51 | 455352 Horatio Beanblower
Horatio Beanblower's picture

 

"Britain has become a nation of youth workers..."

 

http://blogs.telegraph.co.uk/news/edwest/100046321/britain-has-become-a-nation-of-youth-workers/

 

 

 

Tue, 07/06/2010 - 16:53 | 455364 dantes1807
dantes1807's picture

I'm sure the European Central Bank will give the banks a glowing reviewing. Just like they did in the US. Change a few accounting rules and everything will be just fine. That's what we did here before our stress test.

Tue, 07/06/2010 - 17:20 | 455440 ebworthen
ebworthen's picture
"We need to instill confidence in the insolvent banks in the U.S. and Europe, what can we do?"

"I know...we'll invent 'stress tests' that will demonstrate that they are not insolvent...and that they can survive anything."

The stress tests remind me of the Witch Hunt trials in reverse. How do you determine if someone is a Witch? Dunk them underwater and bring them back up until they confess they are a Witch. If they drown - well - proof that they were a Witch because God didn't save them.

The banks and stress tests are the witch hunters - they will always find a witch - and they are dunking to death the middle class.

Of course the banks are fine - they are the preachers, the church, the Inquisition - the power that must not be questioned or doubted.

Tue, 07/06/2010 - 17:21 | 455447 Pez
Pez's picture

911 started out as a drill.

Tue, 07/06/2010 - 18:52 | 455654 wyosteven
wyosteven's picture

Here is an example of stress testing (Courtesy of the Federal Reserve):

1 + 1 = ?

A) 142

B) 261

C) 77

D) None of the Above

Tue, 07/06/2010 - 18:55 | 455659 MarketTruth
MarketTruth's picture

Like the SEC, CFTC, FDIC and others, they will simply use their ability to kill the small fish (and protect the big fish who then get even more power). Reminds me of how Miami-Dade's 'finest' handled drug dealers back in the 80's.

Tue, 07/06/2010 - 18:58 | 455663 Rainman
Rainman's picture

A classic for the ages, TD.

........" Europe's stress tests are the dumbest thing since, well, our own " stress tests".

Tue, 07/06/2010 - 20:22 | 455787 DavidC
DavidC's picture

Can't wait to see if their definition of 'stress' includes the USA's - unemployment at a level that has been exceeded, assets marked to model rather than market, etc - ooh, yes!

DavidC

Tue, 07/06/2010 - 23:00 | 455999 knukles
knukles's picture

Eh-ah whazza matta fa zoo, eh?  Weez ah on a da longa weeg genda foor July justa befo wez a go on a vacatiooneh fora da montha da Augusto.  Lemme alona eh?  Who givesa shit eh? Basta Fung-ool.

Wed, 07/07/2010 - 01:19 | 456125 Moonrajah
Moonrajah's picture

In Soviet Russia the banks stress market.

Oh, wait...

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herry's picture

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