Bank "Stress" Tests, yeah, ok, we believe you...

The link below will bring you to the guidelines for the bank stress tests. Several observations and an editorial:

* The government's "base case" has unemployment averaging 8.4% in 2009. We're at 7.5% as of Jan 31, so we are either going to get to 8.5% in a hurry or they now expect to finish the year well into the 9's
* The base case unemployment for 2010 is 8.8%. Assuming we finish 2009 in the 9's, they are basically saying that in about 2 years unemployment will come back down to about where it is right now
* The base case home price decline in 2009 is 14% with another 4% decline in 2010. Who is gonna buy a house if the government's own reports say real estate is going down another 20% over the next two years? Why not just rent and wait? (Rents are coming down as we speak.)
* I find their "alternate more adverse" GDP of -3.3% and 0.5% laughable given the other inputs of that scenario. If home prices drop another 22% this year and unemployment AVERAGES 8.9%, there's no f-ing way that 2010 GDP is positive.

Here's the link: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiys3s3SFVys8tcn2C5sAju4uUPq8vL8xn1Dk3XIYs15vgLdxzpzLlDBLS6z-ZGsmaOXOe1tIX9QoC988IstaTk5paa7Wqm3mSilZFGfl0dXRpqJC2AaM5UIvumJZ2cfbxLPpLNs-GJ80s/s1600-h/EconScenarios.jpg

Joe