With concerns rising that a default within the EU could be a "Lehman event" for Europe, the Fed has come up with fairly vigorous stress tests for potential fallout on the largest US banks and other institutions. The new tests assume an initial quarterly drop in GDP of 8%, and a U3 unemployment rate that increases to 13% within two years, an ( Read more... )

Apologies in advance for the large numbers of posts this week - obviously, this has been an extraordinary month so far - on par with the crisis months of 2008, in fact.

CNBC/NYT
Contagion - Why Problems in Italy Should Scare US Banks

In early 2010, top officials at the Federal Reserve began to wonder: how would United States banks hold up through ( Read more... )

Bloomberg:
Greenspan Says Home-Price Drop May Spur New Recession

Former Federal Reserve Chairman Alan Greenspan said the slowing economic recovery in the U.S. feels like a “quasi-recession” and the economy might contract again if home prices decline.

“We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a ( Read more... )

Based on "Better than Expected Data!"...

Actually data that has largely been misrepresented, or outright fabricated.

Consider the following (my emphasis highlighted in red):

WSJ
Europe's 'Stress Tests' Relied on Mild Assumptions
LONDON-Europe's "stress tests" were intended to gauge the ability of large banks to weather an economic storm. But the exams ( Read more... )

Daily Mail
FSA sets out its nightmare double-dip slump scenario

Banks must be prepared for a double-dip recession and record unemployment, the country's financial watchdog has warned, in a sign that Britain may not yet be past the worst of the financial crisis.

The Financial Services Authority revised its worst-case parameters for the stress-testing ( Read more... )

Your periodic update to help survive the
zombie capitalism of post-bubble, 21st Century America

This Video is a Must-Watch if you consider yourself a real member of this community!

Elizabeth Warren: STRESS TEST IS ALREADY OBSOLETE...
 WE'RE BLOWING THROUGH THE "WORST CASE" SCENARIO...

Airtime: Tues. Jun. 9 2009 | 6:13 AM ET

Whether ( Read more... )

The following is a collection of excerpts that challenge most of the main stream media's and stock seller's assertions that recovery is, if not already here, right around the corner. And guess what? These guys back up their opinions with facts.

Mish Shedlock
Optimistic Unemployment and Housing Forecasts Looking Downright SillyEconomics may be the ( Read more... )

There are really several arguments pro and con. There are also the faux cons (arguably put forth by faux cons, no less) such as this gem: GOP: where are those 3.5 million jobs Obama promised (PDF), inspiring some interesting retorts - Wall Street Journal RTE Blog & Krugman, just two examples.

But, by and large, the pro and con debates both have ( Read more... )

First, a special community note: A special thanks to those of you who really do read and/or participate! Here at the_recession, we know that there are lots of options for where you can get your doom and gloom, and we value your commiseration ( Read more... )

( Read more... )