On another subject....last year in the first quarter of 2009 the banks were stress tested. The Case Shiller 10 city index was used to stress the banking system. Under the adverse acenario by June 2010this index was to hit 120. Today'snumbers have that index at 160.
Brodero: Please translate. Good or bad? What does your post mean?
Did you actually believe in the 'stress' test or their forecasts?The ECB did one of those and Europe looked rosy. Now Greek and Irish spreads are at their wides. Banks are awash in bad debt and the American people keep subsidizing their bad business. The longer we keep it up the longer we keep directing good money into bad + unproductive sectors. Subsequently, the longer we muddle around the bottom here.
Benj,I may be reading this all wrong but the way I'm interpreting Bro's post is that in January of 2009 the Fed stress tested the banks. One of the assumptions was a Case/Shiller price index level one year hence (June 2010) of 120. By pointing out the index today reads 160 things are not nearly as bad as the 2009 stress tests were assuming. I'm sure other measures and assumptions were used as well but Bro has a point if his numbers are correct.
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