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Surprise! All Banks Pass Stress Test (Except Ally)

Tyler Durden's picture




 

 

In a stunning headline-making moment of clarity, it appears that all the major financials that the Fed monitors (except GMAC Ally) will survive a cataclysmic, Lehman-like moment based on their self-determined analytics of their deeply illiquid off-balance-sheet assets (and a comprehensive understanding of the co-dependence of all those assets). As Bloomberg notes,

  • *TESTS ASSUME HYPOTHETICAL SCENARIOS FOR 9 QTRS ENDING 4Q 2014
  • *FED SAYS 18 BANKS PROJECTED LOSSES WOULD BE $462B UNDER TEST
  • *FED SEES 17 BANKS' TIER 1 COMMON RATIO ABOVE 5% IN WORST CASE
  • *GMAC ALLY ONLY STRESS-TESTED BANK SEEN WITH TIER 1 COMMON BELOW 5%
  • *TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 50%
  • *TESTS SCENARIO ASSUMES HOUSING PRICES DECLINE MORE THAN 20%

Is it any wonder that Government Motors wanted to IPO its GMAC/Ally business recently - with a 1.5% stressed Tier 1 ratio.

And another summary table:

And in chart format:

 

and for fun - only $48.4bn total losses from trading and countperty
exposure in a Lehman-like stress event for JPM and Goldman...

PR From The Fed:

The nation's largest bank holding companies have continued to improve their ability to withstand an extremely adverse hypothetical economic scenario and are collectively in a much stronger capital position than before the financial crisis, according to the summary results of bank stress tests announced by the Federal Reserve on Thursday.

 

Reflecting the severity of the stress scenario--which includes a peak unemployment rate of 12.1 percent, a drop in equity prices of more than 50 percent, a decline in housing prices of more than 20 percent, and a sharp market shock for the largest trading firms--projected losses at the 18 bank holding companies would total $462 billion during the nine quarters of the hypothetical stress scenario. The aggregate tier 1 common capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual 11.1 percent in the third quarter of 2012 to 7.7 percent in the fourth quarter of 2014 in the hypothetical stress scenario.

 

The Federal Reserve's stress scenario estimates are the outcome of deliberately stringent and conservative assessments under hypothetical, adverse economic conditions and the results are not forecasts or expected outcomes.

 

Despite the large hypothetical declines, the aggregate post-stress capital ratio exceeds the actual aggregate tier 1 common ratio for the 18 firms of approximately 5.6 percent at the end of 2008, prior to the government stress tests conducted in the midst of the financial crisis in early 2009. This is the third round of stress tests led by the Federal Reserve since the tests in 2009, but is the first year that the Federal Reserve has conducted stress tests pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Federal Reserve's implementing regulations.

 

"The stress tests are a tool to gauge the resiliency of the financial sector," Federal Reserve Governor Daniel K. Tarullo said. "Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty."

Full PDF here:

DFAST_2013_results_20130307 by

 

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Thu, 03/07/2013 - 17:33 | 3310109 TruthInSunshine
TruthInSunshine's picture

LOL 4 the QED

Thu, 03/07/2013 - 17:35 | 3310130 financial apoca...
financial apocalyptic contagion's picture

haha was just explaining to a socialist classmate how these self-reported tests work and this headline made my job much easier

Thu, 03/07/2013 - 17:42 | 3310153 ZerOhead
ZerOhead's picture

*FED SAYS 18 BANKS PROJECTED LOSSES WOULD BE $462B UNDER TEST

This just in...

18 Banks say taxpayer losses are just a little under half a trillion at the moment...

Thu, 03/07/2013 - 17:48 | 3310173 Spider
Spider's picture

I believe all the banks but Ally also passed the "Armageddon scenario", where the oceans blow up, the sky falls, and the Dow Jones drops over 35 points.

Phew - that was close!

Thu, 03/07/2013 - 18:00 | 3310217 hedgeless_horseman
hedgeless_horseman's picture

 

 

Wow!  Look into the magical risk pool...we look great!

 

FASB approves more mark-to-market flexibility


April 02, 2009

Responding to pressure applied by lawmakers on Capitol Hill, the Financial Accounting Standards Board on Thursday voted unanimously to give auditors more flexibility in valuing illiquid mortgage assets that may have long-term value.

Seeking to resolve this situation, FASB's new guidance allows banks and their auditors to use "significant judgment" when valuing the illiquid assets such as mortgage securities.

http://articles.marketwatch.com/2009-04-02/news/30761323_1_fasb-chairman-robert-herz-illiquid-securities-financial-accounting-standards-board

The new guidance, which is expected to boost bank operating profits when they report first quarter results later this month, alters so called mark-to-market rules, which have required banks and other corporations to assign a value to an asset, such as mortgage securities, credit-card debt or student-loan investments, based on the current market price for either the security or a similar asset.

Banks have complained that they have viable assets with strong cash flows that can't be sold because there is no market for them.

 

 

Thu, 03/07/2013 - 18:01 | 3310244 McMolotov
McMolotov's picture

Needs moar Skittle-shittin'!!!

Thu, 03/07/2013 - 19:09 | 3310482 WayBehind
WayBehind's picture

Who cares, we all know those books are cooked anyway ... keep calm and carry on ...

Thu, 03/07/2013 - 19:16 | 3310498 Manthong
Manthong's picture

The one parameter that was not mentioned but implied in establishing the preconditions for the stress scenario was that the letters d, e, f, a, u, l and t are removed from the alphabet.

Thu, 03/07/2013 - 21:06 | 3310783 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Who cares, we all know those books are cooked anyway ... keep calm and carry on ...

...and don't forget that all of the banks, including Ally, received participation trophies.

Thu, 03/07/2013 - 18:02 | 3310246 NotApplicable
NotApplicable's picture

In other news, Chavez is going full-Lenin.

http://apnews.myway.com//article/20130307/DA4SGCCG0.html

Viva La Zombie Chavez!

Thu, 03/07/2013 - 18:29 | 3310372 McMolotov
McMolotov's picture

Will he smell of sulphur or embalming fluid?

Thu, 03/07/2013 - 18:57 | 3310450 Obchelli
Obchelli's picture

But But But

 

How can stocks ever drop 50% when they can not even drop 0.5% intraday?

And housing as tey say is already recovering?

Thu, 03/07/2013 - 19:01 | 3310465 James_Cole
James_Cole's picture

"All Banks Pass Stress Test (Except Ally)"

I thought Friday humour was tomorrow..?

Thu, 03/07/2013 - 18:02 | 3310247 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

That will certainly end well.

Thu, 03/07/2013 - 18:19 | 3310323 TruthInSunshine
TruthInSunshine's picture

No shit. The "new" FASB rules, even better than the old FASB "rules," where banks are about to receive EVEN MORE LUDICROUS leeway to mark their assets to unicornium-valuations:

 

Proposal Gives Banks More Freedom to Value Assets

Published: February 14, 2013

The board that sets American accounting rules moved on Wednesday to substantially reduce the use of market values in financial statements. The move, if adopted, would give banks more freedom to value financial assets as they deem appropriate.

 

Long live the Ponzi. Pass the HorseMcNuggets & Escolar tartare.

 

Thu, 03/07/2013 - 18:35 | 3310392 Rainman
Rainman's picture

I'm shocked that the noble profession of public accounting has been criminalized !!

Thu, 03/07/2013 - 21:03 | 3310773 TheFourthStooge-ing
TheFourthStooge-ing's picture

FASB: Fuck America, Serve Banks

Thu, 03/07/2013 - 19:04 | 3310474 SnobGobbler
SnobGobbler's picture

so those crap MBS the fed is buying can be priced higher ya knowr; pretty fuckin' slick way to provide more (i)liquidity by my estimates. sounds like a "shitty deal" for us slaves.

Thu, 03/07/2013 - 18:00 | 3310238 I am more equal...
I am more equal than others's picture

I call BULLSHIT!

Commercial real estate is overvalued by a factor of two to five because they've used whores like Cushman Wakefield and CBRE who have the analytical ability Bernake.  I've seen nothing but nonsensical crap come from these girls in red.  Will overvalue (blow you) for a fee.

Thu, 03/07/2013 - 17:47 | 3310181 francis_sawyer
francis_sawyer's picture

I'll label this as the 'ekm' moment

~~~

ht ~ Minsky

Thu, 03/07/2013 - 17:50 | 3310197 ParkAveFlasher
ParkAveFlasher's picture

Electrolytes.  It's what banks crave.

Thu, 03/07/2013 - 17:56 | 3310223 SemperFord
SemperFord's picture

Yup yup, Idiocracy in America is not decades ahead, it's already here because 99.99% percent of Americans, don't understand, don't know and don't care!

Thu, 03/07/2013 - 18:16 | 3310309 francis_sawyer
francis_sawyer's picture

I CARE!... but that's prolly why I have no friends & even my family hates me...

Thu, 03/07/2013 - 21:09 | 3310763 CPL
CPL's picture

Rest easy , like last time they all DIE underground.

 

All of them.  Time for a reset.  Goodbye to bad trash.  I'm now looking at alphabet agencies because of askance...they best check in.  Or they get their children hunting. 

 

you all have some juice to use otherwise to illustrate 'place'.  Mind and will.  Use it monkey's.

Thu, 03/07/2013 - 17:39 | 3310147 McMolotov
McMolotov's picture

I view these stress tests as similar to the pump that's been taking place in the market. If they can't coerce people to dump money into stocks by constantly propping up the market, they want them to be reassured that the banks are a completely "safe" place to store what meager savings they have, and they accomplish that task by having "stress tests" that the banks pass with flying colors.

None of this does a thing to instill confidence in me.

Thu, 03/07/2013 - 18:42 | 3310410 chunga
chunga's picture

Yeah.

Banks "pass" but they're stressing the shit out of everyone else.

Thu, 03/07/2013 - 18:33 | 3310385 johngaltfla
johngaltfla's picture

There is not enough bullshit spray for this test.

 

 

Thu, 03/07/2013 - 17:34 | 3310114 lolmao500
lolmao500's picture

TEST SCENARIO doesn't include MARGIN CALL OF SEVERAL BILLIONS ON THEIR CDS if a major bank goes under...

Thu, 03/07/2013 - 17:50 | 3310193 NotApplicable
NotApplicable's picture

Nobody gets called on CDSes, just ask AIG!

Thu, 03/07/2013 - 18:46 | 3310418 GolfHatesMe
GolfHatesMe's picture

Just let the DTCC figure it out for you

Thu, 03/07/2013 - 18:45 | 3310417 GolfHatesMe
GolfHatesMe's picture

D used to mean Default

Thu, 03/07/2013 - 17:33 | 3310115 max2205
max2205's picture

Ben Almighty...what say thee

Thu, 03/07/2013 - 17:35 | 3310123 Confundido
Confundido's picture

Can we end the Fed then? What do we need a lender of last resort for? Or is it the lender of first resort? I am.... confundido!

Thu, 03/07/2013 - 17:35 | 3310126 SheepDog-One
SheepDog-One's picture

OH so on top of this weeks near 40 S&P points added, we'll get another 15 tomorrow, throwing in the certain full-retard jobs# blowout festival first thing in the morning!

Thu, 03/07/2013 - 17:38 | 3310142 Mark123
Mark123's picture

The whisper number is 170 million new jobs added (based on seasonal adjustment since we know that 170 million were lost due to sequester).

Thu, 03/07/2013 - 17:44 | 3310157 SheepDog-One
SheepDog-One's picture

Muh-muh-muh-muh BRAIN'S not too gu gu gu gud.....

Simple Jack (2009) Full Extended Trailer - Official/High Quality - YouTube

Thu, 03/07/2013 - 17:45 | 3310172 McMolotov
McMolotov's picture

The collective IQ of this country will shoot up 170 points once Maxine Waters kicks the bucket.

Thu, 03/07/2013 - 17:36 | 3310127 Fiat Burner
Fiat Burner's picture

They must have forgotten the test for rise in interest rates.

Thu, 03/07/2013 - 17:52 | 3310203 NotApplicable
NotApplicable's picture

Well, that would just be plain dumb. That's a market phenomenon.

Everybody knows the market is dead, dead, dead.

Thu, 03/07/2013 - 18:20 | 3310332 negative rates
negative rates's picture

Everybody still rocks.

Thu, 03/07/2013 - 17:36 | 3310131 monopoly
monopoly's picture

Thank God, I was worried there would be a problem if markets crashed. Feel much better now. So lets see, should I buy BAC or C....or both.

What a fucking circus we got ourselves into. Beyond words.

Thu, 03/07/2013 - 17:36 | 3310132 Mark123
Mark123's picture

Um, why do we need stress tests any more, now that the Fed can print unlimited money and give to banks?

 

Oh, right, I forgot that this is just a trigger for stock pumping whores of wall streets back room operations.

Thu, 03/07/2013 - 17:36 | 3310133 Confundido
Confundido's picture

Assumption: US Treasury holdings have a 0% risk weight.

Thu, 03/07/2013 - 17:37 | 3310137 SheepDog-One
SheepDog-One's picture

50% equity drop, 20% housing value decline, and banks STILL pass with flying carpets! WOW they're all teflon coated titanuim banks truly!

Thu, 03/07/2013 - 17:52 | 3310202 edb5s
edb5s's picture

Nice TPB reference, +1

Thu, 03/07/2013 - 21:14 | 3310800 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

50% equity drop, 20% housing value decline, and banks STILL pass with flying carpets! WOW they're all teflon coated titanuim banks truly!

...and they've Got What Plants Crave. They've Got Tungsten!

Thu, 03/07/2013 - 17:37 | 3310139 PAWNMAN
PAWNMAN's picture

Unusual that a privately held bank, with a majority of international shareholders, would be in charge of administering a stress test of U.S. banks. Amazing that this body grew to such a high level of influence. More like criminal.

Thu, 03/07/2013 - 17:39 | 3310145 ZippyBananaPants
ZippyBananaPants's picture

If they would have gave that kid a fucking ice cream cone maybe they would have passed.

Thu, 03/07/2013 - 17:39 | 3310151 Racer
Racer's picture
  • *TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 50%
  • *TESTS SCENARIO ASSUMES HOUSING PRICES DECLINE MORE THAN 20%

That is the official line.. the reality is

  • *TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 0.50%
  • *TESTS SCENARIO ASSUMES HOUSING PRICES DECLINE MORE THAN 0.20%

 

Thu, 03/07/2013 - 17:41 | 3310156 infinity8
infinity8's picture

"Ally" - gawd I laughed so hard when I first heard that name-change. This depression does have it's amusing moments.

Thu, 03/07/2013 - 17:49 | 3310191 SheepDog-One
SheepDog-One's picture

'Ally' name must have focus-grouped well....or it's an anagram for 'Ya'll be footin the bill'

Thu, 03/07/2013 - 18:48 | 3310425 GolfHatesMe
GolfHatesMe's picture

Its American for Dexia

Thu, 03/07/2013 - 17:54 | 3310218 NotApplicable
NotApplicable's picture

Besides, how can they become insolvent when they own all of those brand new repo'd cars?

Thu, 03/07/2013 - 17:58 | 3310230 McMolotov
McMolotov's picture

In Idiocracy, the restaurant Fuddruckers had become Buttfuckers at some point in the future.

I think eventually all banks will be called "Assrapers."

Thu, 03/07/2013 - 18:43 | 3310405 Mine Is Bigger
Mine Is Bigger's picture

According to the bank's website, "Ally Bank named 'Best Online Bank' For Second Straight Year."  WTF.  It is apparent they can't even get the capitalization scheme right both in typography and finances.

Thu, 03/07/2013 - 17:42 | 3310161 Iocosus
Iocosus's picture

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

-Henry Ford-

In America there are no people, just a few wolves and lots of sheep.

Thu, 03/07/2013 - 17:43 | 3310162 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I don't think it will take 9Q for them to go under once a derivatives shit storm tsunami hits along with the subsequent domino effect.

..This is the story 'bout Bald-Headed Ben
(Dong work for Yuda, Dong, Dong)
He talks a lot 'n it's usually wrong
(Dong work for Yuda, Dong, Dong)
He said Dong was Wong,
'N Wong was Kong
'N Dong work for Yuda,
'N Ben was wrong

Sorry, Ben, sorry, better try it again
(Dong work for Yuda, Dong, Dong)
Sorry, Ben, sorry, better try it again
He said Dong was Wong
And Wong was Kong
And Dong was Gong
'N Ben was wrong

Ben's got a sausage, yeah man!
Ben's got a sausage, yeah man!
Ben's got a sausage that will make you fart
Ben's got a sausage that will break your heart
Make you fart and break your heart
Don't bend over if you are smart...

 

Thu, 03/07/2013 - 21:55 | 3310900 WmMcK
WmMcK's picture

Zappa is one of my heroes.

A sinister little midget with a bucket and a mop
Where the blood goes down the drain.

The Torture Never Stops

 

Thu, 03/07/2013 - 17:43 | 3310163 youngman
youngman's picture

no synthetic derivatives here...none whatsoever....no off the books stuff either...all is good when you have Ben and now Eric behind you CYA....

Thu, 03/07/2013 - 17:43 | 3310164 Downtoolong
Downtoolong's picture

O.K., they did see that coming.

 

Thu, 03/07/2013 - 17:49 | 3310171 CaptainSpaulding
CaptainSpaulding's picture

Oh Lucy, Im confused ... Please splain'

Thu, 03/07/2013 - 17:46 | 3310175 gimli
gimli's picture

That's quite a relief, the worry had me quite constipated -- although I still feel the Fed's full of shit.

Thu, 03/07/2013 - 17:46 | 3310177 ebworthen
ebworthen's picture

This means that Ally (GMAC) is at the head of the line to get a bail out in the next crash.

Thu, 03/07/2013 - 18:03 | 3310252 NotApplicable
NotApplicable's picture

Just think where the level of channel stuffing would be without them.

I think the UAW pension fund should pick up the slack.

Thu, 03/07/2013 - 18:40 | 3310403 waterhorse
waterhorse's picture

What is good for General Motors is GOOD for America!

Thu, 03/07/2013 - 17:48 | 3310185 NoWayJose
NoWayJose's picture

Banks still do not have to mark their underwater mortgages and foreclosed houses 'to market' so it is pretty easy to pass your stress test when you can pull valuations out of thin air. And would an equity plunge of even 25%, leveraged up 30-to-1 really not cause any stress?

Thu, 03/07/2013 - 17:51 | 3310199 SheepDog-One
SheepDog-One's picture

Yea who are they trying to fool? If the 'markets' dropped even 10% from here they'd all shit their pants.

Thu, 03/07/2013 - 17:59 | 3310234 joeknows
joeknows's picture

absolutely!  the balance sheets are complete works of fiction...this from a CPA...  It's amazing that the AICPA can't get a set of balls and change the rules to reflect reality.  I don't know how reporting non performing assets at 100% of the loan amount circa 2007 doesn't qualify as financial fraud... 

Thu, 03/07/2013 - 18:09 | 3310285 Mark123
Mark123's picture

In a sick twisted way it is probably fair treatment....since the Fed/Govt will buy or guarantee any shit these so-called banks hold.

 

Kind of like the government saying it will buy any 2003 Dodge minivan for $75,000.   I guess I would carry that asset at $75,000.

Voila, I pass the stress test.

 

Thu, 03/07/2013 - 17:49 | 3310192 natronic
natronic's picture

Easy to withstand a crisis when the Fed will print you all the money you need.

Thu, 03/07/2013 - 17:51 | 3310195 Dewey Cheatum Howe
Dewey Cheatum Howe's picture
  • *TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 50%
  • *TESTS SCENARIO ASSUMES HOUSING PRICES DECLINE MORE THAN 20%

 

Sounds like Uncle Ben is prepping the masses for the bubble illusory wealth (that everyone thinks is real muscle and not some steroid meatball head, water balloon bloated muscle) deleveraging reality kicks in that is coming.

Thu, 03/07/2013 - 18:01 | 3310239 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Also the other thing we can infer is they probably plan to try to unwind the QE to infinity and beyond over 2 1/4 years. Hence the stress test being 9Q. Also this seems to be an admission (cry for help maybe) the FED has inflated (manipulated) the equities market by at least 50% and housing market by at least 20% due to all their money printing.

Thu, 03/07/2013 - 17:54 | 3310211 Yen Cross
Yen Cross's picture

     Every time I read something like this I pop my Scarface DVD(directors cut) in the player, fast forward to the end, and imagine Tony Montana is really John Corzine.

Thu, 03/07/2013 - 17:53 | 3310213 Getting Old Sucks
Getting Old Sucks's picture

That's what they get for not giving me a real pony or a second ice cream cone!

Thu, 03/07/2013 - 17:53 | 3310214 vote_libertaria...
vote_libertarian_party's picture

The FED says...

 

You mean the same Fed that didn't see a housing bubble even in 2008?

 

You mean the same Fed that says it's QE program is only tweaking interest rates a smidge?

 

oh, ok.

Thu, 03/07/2013 - 17:56 | 3310224 Stonedog
Stonedog's picture

Are these the same banks that receive the equivalent of $82 billion in taxpayer subsidies which permits them to be "profitable" and pay out massive bonuses to their employees?

Thu, 03/07/2013 - 18:12 | 3310297 Mark123
Mark123's picture

Bernanke response:

 

"Uh, er, well, economic models, risk, er, mandate, complexity, er, um...I have already addressed this issue"

Thu, 03/07/2013 - 18:39 | 3310399 waterhorse
waterhorse's picture

of course, how else can they attract or keep this kind of "talent"?

Thu, 03/07/2013 - 17:58 | 3310231 Its_the_economy...
Its_the_economy_stupid's picture

How 'bout a li'l history to focus the mind?

 

http://www.youtube.com/watch?v=RJpLMvgUXe8&feature=player_embedded

Thu, 03/07/2013 - 18:03 | 3310241 Yen Cross
Yen Cross's picture

 Banks+Insurance Cos. = Too Big To Prosecute. (according to our pussy of an Attorney General) Bring back Glass Stegall. Put some sanity back into banking! That will force "helo pad Bernanke" to raise rates yesterday!

Thu, 03/07/2013 - 18:04 | 3310257 Getting Old Sucks
Getting Old Sucks's picture

It will take hell on earth to make that happen now.

Thu, 03/07/2013 - 18:08 | 3310283 Yen Cross
Yen Cross's picture

 Wishful Thinking. It's amazing how fast people forget. History repeats because people always wait until the last minute.

Thu, 03/07/2013 - 18:06 | 3310269 adr
adr's picture

Wow, 12.1% unemployment? Already here and then some.

In 2012 my home lost 25% of its value and another 10% so far in 2013.

I'd say the worst case stress test scenario is already here. All we need is that pesky 50% drop in stocks.

Thu, 03/07/2013 - 18:15 | 3310302 Mark123
Mark123's picture

Stop using real facts....our government has all you need.

 

If you continue to use these un-sanctioned stats, then you will be deemed a combatant and subject to droning.

Thu, 03/07/2013 - 18:07 | 3310275 valkir
valkir's picture

I am not rich.I fully trust what FED says.All i can do is to send 1 small gift to Bernank.Cake from Ikea.

Thu, 03/07/2013 - 18:38 | 3310396 waterhorse
waterhorse's picture

how about a used urinal deodorizer cake?

Thu, 03/07/2013 - 18:15 | 3310303 Ricky Bobby
Ricky Bobby's picture

I have not been sent to the Gulag yet but starting to understand what it was like to live in the Soviet Union.

Thu, 03/07/2013 - 18:19 | 3310322 Mark123
Mark123's picture

I still go back to what my Dad said about the depression....

 

The leaders kept on blaming everthing on a "lack of confidence"....and as a result never addressed the real, obvious problems.  It required a world war that destroyed Britain and Germany to wipe the slate clean.

Thu, 03/07/2013 - 18:22 | 3310336 McMolotov
McMolotov's picture

I have plenty of confidence — that we'll follow the same gameplan.

Thu, 03/07/2013 - 18:24 | 3310352 Seasmoke
Seasmoke's picture

but what about a 51% and a 21% drop......its what they DO NOT say , that you need to be very afraid of

Thu, 03/07/2013 - 18:25 | 3310356 teolawki
teolawki's picture

So if I'm reading this right, the next bailout will have a minimum price tag of $462B and Ally gets the Lehman treatment.

Thu, 03/07/2013 - 18:29 | 3310369 Let The Wurlitz...
Let The Wurlitzer Play's picture

Please add into the assumptions a 50% loss in all 5+ year gov debt, a 80% loss in HY and a 70% loss in munis and for fun a 20% loss in grade "A" corporates.

Then let me know what the ratios are.

Thanks

 

Thu, 03/07/2013 - 18:32 | 3310382 tip e. canoe
tip e. canoe's picture

wonder if the FED would pass the stress test?

Thu, 03/07/2013 - 18:37 | 3310395 waterhorse
waterhorse's picture

With something like Arthur Andersen or Promontory conducting the testing, they'd be sure to pass with flying colors!  Or better yet, they could perform their own stress test.

Thu, 03/07/2013 - 18:34 | 3310390 waterhorse
waterhorse's picture

So in the latest round of musical chairs aboard the Titanic, all the other banksters get a chair while Ally is left standing?

Thu, 03/07/2013 - 18:41 | 3310406 thismarketisrigged
thismarketisrigged's picture

tomorrows employment numbers are going to mean shit.

 

if we see improvement, the dow will hit 15000 tomm.

 

if we see disappointment, the dow will go to 16000 tomm because that will mean longer qe.

 

either way, we all know in this big fucking scam of a market that is becoming so obvious to even the biggest naysayers, its going to be a green day, and i am going to be fucking pissed.

 

the s&p will easily surpass its record tomm, 

 

when the fuck will the markets sell off? it makes no sense, even after we hit new highs, it seems like the market is tired but it just wont go red. i forgot what the color red looks like.

 

fuck all these fucking banks, i hope they are all beyond bankrupt like lehman and bear stearns were and do not get bailed out. fuck u bernanke and obama u fucking bastards

Thu, 03/07/2013 - 20:05 | 3310638 khakuda
khakuda's picture

Having been through a couple of these endless Fed monetary masterbations, you should relax, get long and have a drink.  Eventually, maybe even quickly, it will get to aggregious levels with rampant speculation times 10.  The Fed will keep the pedal to the metal the entire time, patting themselves on the back and enjoying all the Man of Year awards and Nobel Prizes.

Then, one day, you will see a dog drive by in a Lamborghini.  Not an ugly chick, but an actual dog driving an Italian sportscar and getting a blow job from Kate Upton as he drives down the street.  At that you point, you must sell and go short. That is the sign.  It is always the sign.

Thu, 03/07/2013 - 18:52 | 3310442 Crtrvlt
Crtrvlt's picture

yes nothing can possibly go wrong with 700 trillion in derivatives.  remember folks gross can never be net. ever  

Thu, 03/07/2013 - 19:56 | 3310585 yogibear
yogibear's picture

And everyone get's a triple star.

The only stress-test  the bank regulators created for the bankers was when the bank president was  asked about a personal lap dance in front of rest of board members at the bank regulator's strip club.

Thu, 03/07/2013 - 20:00 | 3310619 khakuda
khakuda's picture

Ally (ahhemm, DiTech, cough) didn't pass?  Come on Bernanke, why haven't you doubled monthly QE yet?

Thu, 03/07/2013 - 20:02 | 3310628 yogibear
yogibear's picture

Ally opposed attending the bank regulator's strip club for moral reasons.

Thu, 03/07/2013 - 20:02 | 3310622 thewayitis
thewayitis's picture

   

          And here we go. The key phase: a bank SELF assessment. NOT even funny......

Thu, 03/07/2013 - 20:10 | 3310651 thewayitis
thewayitis's picture

   Senario:  One of the self assessed banks get caught up loosing a few billion. They have to get bailed out by the Feds and they get a fine or MAYBE a slap on the hand. Now don't do this again........

Thu, 03/07/2013 - 20:06 | 3310639 CunnyFunt
CunnyFunt's picture

Like I've noted before, stress tests are like new age hippie schools, nobody fails to prevent their feelings being hurt.
Banks, go fuck yourselves.

Thu, 03/07/2013 - 21:07 | 3310785 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I think the political aspect of this goes unnoticed.

TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 50%

I've stated before this is probably a tactic admission how much the FED has inflated the equities market. When they finally try to normalize monetary policy and bleed all that excess out you are probably looking at about 50% inflation that is being hidden in the stock market finally hitting the street. That means federal deficit should be halved by about the same. It is going to be fun to see how they rig the CPI and other inflation measures to hide it while claiming they are cutting spending at the same time.

Thu, 03/07/2013 - 23:40 | 3311103 smart girl
smart girl's picture

Deutsche gonna blow?

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