|Bracing against the wind|
Saturday, May 30, 2009
In other words... we're outpacing the "adverse scenario" stress tests.
If we pass 10.3% unemployment, then we will *exceed* the stress scenario.
With an additional 1% unemployment, we're talking about 10 billion more in write-downs on credit card debt and real-estate defaults, This will exceed what major banks than have in reserve... and the market has eaten its full in stock issuance and bond conversions, so where will the banks get the money from?
Answer: Expect another round of bailouts in the Fall... right about when the second phase of swine flu will hit.
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