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Whither The Supervisory Capital Assessment Program?

Marla Singer's picture




 

Does anyone remember "The Supervisory Capital Assessment Program"? We know.  That's ok.  Don't feel bad. The Administration has been quietly trying to get you to forget all about it for some time now. Just in case you need a refresher, the Program went by another moniker as well. The "Stress Tests."

We'd just like to refresh your memory to point something out.  This from the Fed's white paper on the topic "The Supervisory Capital Assessment Program: Design and Implementation."

 

 

Yes, the "more adverse" scenario for unemployment is 10.3%. Digging a little deeper we find:

Note carefully footnote #3 in the context of this morning's news: Unemployment in U.S. Jumps to 10.2%, Payrolls Fall.

Given that the recession (we still call it that in the Zero Hedge offices even given the government spending fueled GDP boost) has stuck its head through the ceiling of (another) metric of the Stress Tests' "more adverse" scenario (which is the administration's Thorazined code for "worst case scenario"), doesn't this imply that the government "goodbankkeeping solvency seal" applied to every bank that took the test with a "PASS" stamp (hopefully not in red ink) is worthless at this point?  (Were you fooled?)

So, when are the next round of revised Stress Tests, exactly?

 

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Fri, 11/06/2009 - 10:28 | 122136 chunkylover42
chunkylover42's picture

I thought it was called the Supervisory Capital Asset Memo, or SCAM.

Also, it's helpful that the gubbmint explained in the memo that the minus sign indicates a negative value.  I was confused for a second there.

Fri, 11/06/2009 - 11:46 | 122242 Anonymous
Anonymous's picture

Or how about the Capital Reserve Adequacy Program?

Fri, 11/06/2009 - 10:28 | 122140 deadhead
deadhead's picture

Your brilliance is brutally honest, appreciated, necessary, and I thank you for the stress test reminder.

If another round of stress tests do come around (yeah, i know, snowball in hell and all that), they will make "All in the Family" look like a drama.

Please, please, please....bring on the stress tests again.

 

Fri, 11/06/2009 - 10:54 | 122175 Anonymous
Anonymous's picture

I'm wondering if this was all out of the play book. Now they can come to congress with yet another round of bail outs. I realize that isn't a popular move, but perhaps this will be used to leverage that?

Fri, 11/06/2009 - 15:12 | 122618 Hephasteus
Hephasteus's picture

Risk can not be created or destroyed. Only transfered.

Fri, 11/06/2009 - 10:45 | 122160 Anonymous
Anonymous's picture

Is it possible that they will use this as an excuse for yet anther bail out? Perhaps it was designed in such a way

Fri, 11/06/2009 - 12:17 | 122278 aldousd
aldousd's picture

Yes, they invested in a political capital insurance policy. If they needed another stimulus, engineer expectations so that one comes when it's perceived to be necessary.  Heros all around.   This is good politics, too bad it's bad math.

Fri, 11/06/2009 - 10:46 | 122163 Anonymous
Anonymous's picture

As of 946am, with the stock indices all in green, once again apparently nothing matters and we have to prepare for a lot of geniuses explaining today that the market is climbing a wall of worry and blah, blah, blah.

This is about as crazy as someone who believes everything is crazy could ever have imagined.

Fri, 11/06/2009 - 10:47 | 122166 gator gatlin
gator gatlin's picture

Our present government is nothing short of an incompetent bullshit factory...incompetent because the quality of their bullshit is so poor and yet they arrogantly persist in spewing it in a fashion that shows they believe the public is flatout stupid and will believe any drivel they choose to spew out...average people in the street know this now and routinely say so...in the initimable words of Richard Pryor: "how long, how long, how long can this bullshit go on?"

Fri, 11/06/2009 - 10:52 | 122172 amarshall
amarshall's picture

market is up today on 10.2 % unemployment... green shoots

 

Fri, 11/06/2009 - 11:08 | 122197 Ivanovich
Ivanovich's picture

Unemployment is a lagging indicator, and worthless.

 

Or something.

Fri, 11/06/2009 - 11:33 | 122229 Hansel
Hansel's picture

It's also worth noting the household survey of unemployment reported 558,000 jobs lost last month.  190,000 jobs lost doesn't jibe with 500,000 weekly intial claims.

Fri, 11/06/2009 - 11:43 | 122239 digalert
digalert's picture

We need an Oblame-assessment-program that measures adverse, more adverse. One that weighs the negative factors Bernanke, Geithner, Pelosi, Frank...oh throw in the Biden variable for kicks.

Fri, 11/06/2009 - 11:54 | 122240 Racer
Racer's picture

November 2000 was the start of the long decline

 

But that was before the monopoly of GS took over the market

Fri, 11/06/2009 - 12:27 | 122290 Rainman
Rainman's picture

Gubmint is too busy trying to blow a trillion borrowed bucks on the HealthScare scam  to be involved in Stress Test II.

Besides, no depositor has ever lost a dime in the history of the formerly solvent FDIC.

Reminder : There is no plan, no backup plan and no backup plan for the backup plan. There is only trust in the short term attention span of the sheeple.

Sat, 11/07/2009 - 12:55 | 123460 Anonymous
Anonymous's picture

Chunky and Rainman...I know you think you are somehow being witty or folksy in writing "gubmint" instead of "government" However, I think most on this site would agree it makes your sound more like idiots. If you are too lazy to write government, just abbreviate to gov't...thank you for your attention

Fri, 11/06/2009 - 12:52 | 122335 Racer
Racer's picture

mindblowing fact....

LONDON (MarketWatch) -- At its high point, the federal government was guaranteeing or insuring $4.3 trillion in face value of financial assets, according to a report released Friday by the Congressional Oversight Panel. "The Panel found that Treasury took an aggressive stance in protecting taxpayer interests, and the Panel did not identify any major flaws with their implementation of the guarantee programs. Even so, these programs carried significant risk. In many cases, the American taxpayer stood behind guarantees of high-risk assets held by potentially insolvent institutions," the report said.

and a comment to that article was....

"Assuming about 300 million Americans, this means the government insured a little more than $14 billion per person."

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