Stress from the “stress test”

A friend called late yesterday to ask me what I thought about the “stress test.” I told him it seemed to be working, I was pretty stressed out by the market thanks to the carnival act we call the Treasury and Fed.

First Mr. Geithner effectively tells us that everything is hunky-dory. Stocks soar and the buck tanks (because the only way to trade the dollar these days is to trade the stock market it seems).

It’s all about stress tests ... and green shoots.

“It’s all about the stress tests,” exclaimed a Bloomberg news reporter this morning.

She’s got that right. So far the unofficially released results are “reassuring,” and the currencies (with exception of the US dollar, of course) mostly love it.

The generally accepted reason for these stress tests was said to be for replacing uncertainty with transparency. Ahh yes ... transparency. Thank goodness for that. (For those unaware, ‘transparency’ is a common buzz word used in the public forum to evoke that warm and fuzzy feeling.) From this point on, we know where we stand

That’s nothing…

John Ross and I were discussing what a “$35 billion funding gap”, as its being report, really meant for Bank of America; JR said, “Heck, that’s like the cost of a McDonald’s cheese burger to our government these days.” Funny, but sadly true. Also, true that McDonalds seems one of the few places real people can afford to dine, despite their government having endless supplies of cash.

But we need not worry little things like “funding gaps” in the midst of all those “green shoots” shoost-up their lovely little heads. Credit markets are loosening. Junk bond distributors are back in the game. China announced this morning they are growing ahead of expectations.

Juggling Risk

Juggling is a rather simple skill. But it’s impressive nonetheless. Perhaps the appeal is in its inherent uncertainty – the number of juggled doing the juggling. Whatever it is we like watching someone juggle while it’s going smoothly, but we get nervous once we feel there are too many balls in the air for too long.

Right now, the markets aren’t considering the potential for things to come crashing down. Alternatively, market players have become rather confident ... almost as if they’ve gotten sick of all the negatives and decided to take a glass-half-full approach.items exceeding the number of hands