Banks told to stress-test for 11% jobless rate

[OhioChick]

Source: MarketWatch

Feb. 17, 2011, 5:07 p.m. EST

WASHINGTON (MarketWatch) — The Federal Reserve is requiring 19 banks that underwent U.S.-mandated “stress tests” to now test their capital against a recession scenario in which the unemployment rate rises to 11%, according to a report Thursday.

The institutions went through the first stress tests in 2009, a time in the aftermath of the 2008 crisis when the financial system remained in fragile shape. In January, they submitted new capital plans to the Fed.

Nancy Bush, analyst at NAB Research, said that with an 11% jobless rate, it’s apparent that regulators don’t want to be “too optimistic, as they had been in 2009.” The government pegged the nation’s unemployment rate at 9% in January.

Louisiana State University- Baton Rouge finance professor Joe Mason said an 11% unemployment rate was “a reasonable scenario to test” and not so extreme.

“I see that as pretty darn likely,” Mason said.

Read more: http://www.marketwatch.com/story/banks-told-to-test-for-11-unemployment-report-2011-02-17

[Wilms]

1. .

[dixiegrrrrl]

10. Perfect.

[Newsjock]

2. Perhaps this is why they're trying to steal everything now

This seems to be an ominous development.

[krispos42]

3. Gee, I wonder how soon the result of this test will be released to the public.

I'm going to guess about never-ish.

[boppers]

12. What are you going on about?

They released the results last time, why wouldn't they release the results this time?

http://www.cnbc.com/id/30626486/Stress_Tests_Ten_Banks_Need_to_Raise_74_6_Billion_in_Capital

[Fuddnik]

14. The last test was a joke.

This one will be too.

[krispos42]

20. I seem to remember the Fed refused to release the names of the banks last time this happened

Maybe it was on a different financial issue.

*scratches head*

I thought it was the stress test, though.

:shrug:


Thanks for the link, though.

[nalnn]

21. I can see

I can see how releasing the names of the participating banks could cause problems. Some people could become anxious (or panic) if they thought their bank performed poorly on the test.

[Kip Humphrey]

4. 11%??? Don't they mean 22%? ...Or do they believe their own fakery?

[area51]

9. I think they want us to believe their fakery.

According to this article, we have 30½% unemployment; it's long past the time to start another WPA.

[pinqy]

15. That 30.5% includes...

the prison population, many people who are actually employed, and the math is all wrong, too. They're using a percent of the Labor Force, but most of the people they're adding in the numerator are not in the Labor Force, so they're not in the denominator. That's grade school math, that you can't have items in the numerator that aren't in the denominator.

And even the 22% claim...I have no idea where shadowstats is making up those numbers from...he's again counting employed people as unemployed and including people who aren't available for work and even then he's arbitrarily adding more people and his explanation of where they're coming from flat out isn't true.

[boppers]

13. Have to use a consistent number to get consistent results.

They're using the most common number, rather than arguing about underemployment, "discouraged" workers, etc.

[applegrove]

5. Peak oil could cause another recession.

[defendandprotect]

6. Why in the hell are we allowing the FED RESERVE to set economic/job policy?

Congress has surrendered this decision making to the FEDERAL RESERVE -- a private bank!!

Our economy and decisions on job creation should be made by Congress -- it's political

-- and not something to be decided by a private bank!

What the hell is wrong with us?




THANKS FOR THE HEARTS -- AND here's a :hug: back -- !!

[dixiegrrrrl]

11. heh...Obama wants to remove that item from the Fed, didja hear?

Says a revamped Fed will NOT have employment as a policy.
Just as well, since the Fed has ignored its mandate for so long anyhow.

[defendandprotect]

19. Fed's policy has been "worker instability" .... You don't need to "revamp" FED. ...

we simply need Obama and Congress to take on their actual responsibilities --

and keep the economy and jobs out front for discussion and debate -- not

hidden away in back rooms where more and more stuff keeps landing!!







THANK YOU FOR THE HEARTS -- AND HERE'S A :hug: BACK -- !!

[Yavin4]

16. Simple. Because Fiscal Policy Works and That Destroys the Core Republican Meme

Republicans want the Fed to control the economy, not the federal government. Why? Fiscal policy actually works. It puts people to work, and it puts money in their hands. Over time, these kinds of policies build up political constituencies and it gets harder to over turn them.

Better to let the Fed monkey with interest rates and encourage irresponsible borrowing which makes people believe that they're wealthy when in fact, they're poor as hell.

[Joanne98]

7. Is this a joke?

[rucky]

8. mother fuck

I don't think I'll be able to ride this out.

[sarcasmo]

17. 20-25 % in reality.

[pinqy]

18. No, it's not

To get anywhere near that percent, you have to include some people who are employed, people who couldn't actually take a job if offered, and people who haven't even tried to look for work in over a year. Or add in prisoners, or young children.

I'd love to see the actual breakdown of your figure...hard numbers, not the hand-waving shadowstats etc does.

[nalnn]

22. I agree

That the number is not quite 20% yet, I would believe however that the number is higher than commonly reported. I know the 'official' number is not all of them, but I wonder what the total really is. I mean the total number of ALL people between 15 and 65 that are not working right now.

[sarcasmo]

24. All of the people who no longer get unemployment don't count. What do you think that percentage is?

[pinqy]

26. Wrong

The Unemployment rate is not and has NEVER been based on unemployment benefits.

See for yourself: Unemployment Insurance First note that there is a figure called "Insured Unemployment rate." That is the percentage of people covered under UI who are receiving benefits. The current Seasonally Adjusted (SA) rate is 3.1%...clearly not the Unemployment rate. Look further and see that the advance number for the week ending 5 Feb was 3,911,000. And the unadjusted number for all programs is 9,250,156 Keep these in mind.

The Unemployment rate is the percentage of people who are not working but are looking for work as a percentage of all people working or looking for work. We find these numbers at Bureau of Labor Statistics Note that the Seasonally adjusted Unemployment number is 13,863,000...far more than those collecting insurance.

Then you can always read the http://www.bls.gov/cps/faq.htm#Ques2">FAQ

[AnneD]

23. I see the sock puppets are out.....

:eyes:

When you have a job opening and you have between 150 to 600 applicants, depending on the part of the country you are in, things are worse than they are telling you. They report the new claims and the people still receiving unemployment, but if you drop off the rolls, you are not counted, but you didn't suddenly get 'employed'.

I went through this in the 80's. I was unemployed for 9 months, ran out of benies at 6 mos. Finally landed a part time job for 6 mos, not enough to really live on and finally found a full time job after 6 more mos. I was not counted as unemployed for 3 months-I dropped off and was counted as working when I was working 18 hrs a week.

They jack around with the statistics to: make the party in power look good, keep the population calm. They tend to revise up most time and their stats on the numbers of jobs needed are based on faulty birth death rate stats. This has been brought up before and conveniently ignore. I have always multiplied the "official" rate by 2 to get a good rate. This has been going on so long I now multiply the official rate by 3 and am about ready to up that to a factor of 4 if this goes on much longer. That seems to be an accurate 'feels like' number.

[OhioChick]

25. You're absolutely correct and very well stated n/t