Stress Test

Compliments of reader Tim.

For those too lazy to click on the Federal Reserve link and read, below are some of the key points contained in the SCAP:

(1) “more than 150 senior supervisors, on-site examiners, analysts and economists” spent a month reviewing the 19 BHC’s that hold two thirds of the country’s bank assets and account for one half of the loans

Developing Story: Allegedly the "gradation release" will be "essential" for clarity on the stress tests.

In other news, Obama has 100% confidence in Bernanke. Zero Hedge is starting a list of all the people Obama loves more than life itself: members so far 1) Tim Geithner, 2) Steve Rattner, 3) Ben Bernanke.

Turner Radio Network out with a shocker on what they claim are the leaked Stress results. We paraphrase and can not vouch at all for the truthfulness of the content:

(Update: signs point to potential scammery here. ZH will try to get bottom of this).

The U.S. Treasury will postpone the Stress test results until after Q1 bank earnings, according to Reuters, which is citing a source familiar. While the conspiracy theorists among us would not be surprised, this is a strange delay to say the least.

The source, speaking anonymously because the Treasury has not made a final decision on what to disclose, said officials do not want any test results released before the earnings season wraps up for most U.S. banks on April 24.

On the Federal Reserve's web site there is a useful search feature (link here) that provides a listing of all "Enforcement Actions" the Fed has brought against bank holding company subsidiaries, after these have failed a bank exam or need to take further action in the Fed's opinion. In essence the Fed has been running micro stress tests for 2 decades: the Fed database goes back all the way to 1989.

All bank holding companies with assets over $100 billion will be stress tested. The test will use a baseline scenario and a worst case- longer recession one. Here is where the Fed shows its disconnect with reality yet again, as the worst case scenario is already the optimistic one for several parts of the country. Bank testing under the worst case assumes: