A batch of gloomy economic reports during the past few days suggested that recent optimism about a global recovery might have been premature. This caused Doug Kass to warn that “stock prices have moved ahead of fundamentals” and Kenneth Langone to caution that “investors seem to be getting ahead of themselves”, although he maintained that the long-term outlook on the market was positive.

Big banks across the US announced large common stock offerings and plans to repay the government, and the US administration attempted to bring transparency to the credit derivatives markets and also crack down on the credit card industry.

In addition to Kass and Langone, commentators featured on camera in this post include Elizabeth Warren, Meredith Whitney, Alan Greenspan, Peter Boockvar, Giles Keating, Jim Rogers, Barry Ritholtz, Dennis Gartman, Abby Cohen, Peter Eliades and Laszlo Birinyi.

The

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The bank stress test, do you believe it?

Since my return from holiday, I have been scratching my head wondering why the market (in this case the S&P) has moved so high for little or no reason. The economy still appears to be very much on the defensive with unemployment rising and the business environment still on a slippery slope.

I made this video before the stress test was announced and I suspect that all of the stress test leaks have already being discounted by the market.

My new video is a follow-up from my April 14th video that I made before I left for New Zealand. If you have a few minutes, please take the time to view it. I think you will find it interesting that my observations may conflict with current market trend.

With the Obama honeymoon coming to an end, we are going to see how the markets move without …

The bank stress test, can you believe it?

Since my return from holiday, I have been scratching my head wondering why the market (in this case the S&P) has moved so high for little or no reason. The economy still appears to be very much on the defensive with unemployment rising and the business environment still on a slippery slope.

I made this video before the stress test was announced and I suspect that all of the stress test leaks have already being discounted by the market.

Video link on next page …

My new video is a follow-up from my April 14th video that I made before I left for New Zealand. If you have a few minutes, please take the time to view it. I think you will find it interesting that my observations

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After the close of trading, the Fed released the results of the bank stress test. 19 banks were analyzed. Nine came out with no need to raise new capital, but 10 will.  The banks that will have to raise the largest amount of capital are Bank of America (BAC), Wells Fargo (WFC) and GMAC (partially owned by General Motors (GM)).  The total for all 10 banks is $74.6 billion.  This is after the effects of the “better than expected earnings” in the first quarter and other capital actions that the banks have already taken or announced, such as selling off assets, or in the case of Citigroup (C), exchanging of TARP preferred shares into common stock. Under the “more adverse” scenario (read, realistic scenario) the 19 bank holding companies (BHC) will suffer total losses during 2009 and 2010

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Barring some dramatic – and unforeseen – news this week, expect investors to tread water until Thursday, when the government is expected to release the results of the bank stress tests it conducted on the 19 largest U.S. banks.

The stress-test results are expected to show that the 19 banks may have to raise between $100 billion to $150 billion – or even more – in new capital. Investors will cause the shares of the strong players to zoom northward, and will likely savage the shares of the weakest players.

“I can’t think of a time since I’ve been watching banks when there’s been so much uncertainty about the true value of a key set of assets,” Douglas Elliott, a fellow at the Brookings Institution, a Washington think tank, told Reuters.

The U.S. bank stress tests have transfixed the world financial markets for weeks, exacerbating the ongoing financial crisis – worsening the U.S.

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The bank stress test of the nation’s 19-largest financial institutions is a flawed exercise that threatens to elevate the very economic-system stress it was designed to relieve. The U.S. Treasury Department isn’t scheduled to release the results of the much-ballyhooed bank stress tests until Monday. Little has been revealed so far, but one fact seems certain: Whatever information is disclosed is likely to be either too much - or even more likely - not enough for analysts, investors and the public to determine the soundness of a banking system upon which the nation’s economic growth is predicated. We’re already starting to see bits and pieces leak into the public domain. And the response hasn’t been positive. Although the tests reportedly concluded that only one of the 19 banks that received a stress test would require additional ...

Only one of the 19 financial institutions that received a bank stress test would require additional capital, the controversial government initiative has reportedly concluded.

The identity of the bank that is alleged to have failed the bank stress test was not revealed.

The bank-stress-test findings were reported yesterday (Sunday) by CNBC.com, which said it obtained the information from a source that it did not identify. The source did not identify the company, CNBC.com reported.

“At least one firm – under the [bank] stress test assumptions – will require more capital,” the source said.

The bank-stress-test results were contained in a two-dozen-page report that the government released Friday. But the results had already been “conveyed” to the firms, meaning the bank in question is aware of the U.S. central bank’s assessment, according to the published report.

This round of bank stress tests was essentially a two-step process. The

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As stock markets attempt to notch up a sixth consecutive week of gains, the debate as to the longevity of the nascent rally rages on. The featured video material sees Steve Leuthold stating that the S&P 500 Index will rise to 1,100 this year, but Laslo Birinyi taking a bearish stance and advising that the “odds are not with you”. Similarly, Jim Rogers expects more “bottoms”, Nouriel Roubini claims markets to be “way too optimistic” and acclaimed Cazenove chartist Robin Griffiths is looking for a retest of the March 9 lows.

As far as the economic outlook is concerned, Martin Feldstain refers to the “faux recovery”, whereas Wilbur Ross and Abby Cohen comment on the slowdown in the econimic deterioration. Adding to the economic debate and related issues such as bank stress tests, the blame game, Goldman Sachs and commercial real estate, this week’s harvest

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Thursday February 26, 2009 Navivest

The U.S. Treasury late yesterday, announced details of its two pronged Capital Assistance Program (CAP) under which it will put banks through a “stress test” to determine if the banks need additional capital to help see them through the current economic crisis and if it is determined that they are in need of additional capital, the Treasury will provide “bridge” capital until the banks are able to access private capital.

Banks with assets greater than $100 billion are required to undergo the stress test regardless of whether or not they plan on applying to receive CAP money.

The CAP program is only open to what the Treasury is terming Qualified Financial Institutions or QFIs and to be a QFI, a financial institution must be a top tier bank that’s not controlled by a bank holding company or savings and loan company and must not be

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