Scheduled for 2100 this evening, GMT. This is a good spot to measure whether we will see a “sell the fact” kind of reaction to the release of the results, though so much has already been leaked and discussed at this point, it is a bit hard to see this as a dramatic event risk trigger. We should be on guard, however.
In the end, the stress tests involve all kinds of projections for where the economy is going from here and assumptions about declines in asset values, etc… so the Fed’s projections would be rendered totally meaningless and wrong if the economy double dips and asset values continue to decline and defaults rise. The banks capital reserve levels are only as good as the Fed’s spreadsheets assume them to be . Considering how these kinds of assumptions and models got us all into this mess in the first place, we are as good as flying blind and should take absolutely no confidence away from the Fed’s conclusions.
In the end, the stress tests involve all kinds of projections for where the economy is going from here and assumptions about declines in asset values, etc… so the Fed’s projections would be rendered totally meaningless and wrong if the economy double dips and asset values continue to decline and defaults rise. The banks capital reserve levels are only as good as the Fed’s spreadsheets assume them to be . Considering how these kinds of assumptions and models got us all into this mess in the first place, we are as good as flying blind and should take absolutely no confidence away from the Fed’s conclusions.
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