Only 35% Of Survey Participants Expect The Stess Test To Be Credible....

I´m surprised that the rate is above 20 percent... ;-)

Ich bin ehrlich überrascht das immerhin 35% dem Stresstest eine Aussagekraft zubilligen.... ;-)

Goldman Sachs via FT Alphaville

It’s the results of a Goldman Sachs survey of 376 mostly-European market “participants” ahead of the results

GS Stress Test
H/T Zero Hedge

Get ready for at least a weekend full of spin......

Man kann sich jetzt schon einmal mindestens auf ein Wochenende voller "Spin" einstellen.....

UPDATE:

I assume after the results the percentage of believers hasn´t increased "significantly"....

Kann mir gut vorstellen das nach Bekanntgabe der Ergebnisse die Glaubwürdigkeit des Tests nicht "explosionsartig" hinzugewonnen hat....

Stress Test Results CEBS

5 Cajas ( Spain ), Ate Bank (Greece ), Hypo ( Germany ) failed....

CEBS SAYS 7 BANKS HAD OVERALL SHORTFALL OF EU3.5 BLN OF TIER 1

Stress Test Interactive Graph Spiegel

Apparently Not Too Stressful The Mess That Greenspan Made

Stress test’s sovereign support = senseless

the test parameters being rather cynically calibrated to achieve the desired result.

JPMorgan Shreds The Stress Tests, Says 54 Banks Should Have Failed, And That Investors Will Lose Confidence BI

Gaming the stress tests 101 FT Alphaville

Morgan Stanley On Stress Tests: "Lots Of Missed Opportunities" ZH

Van Steenis European Stress Tests

with innovation comes risk./ pimco!

what a great summary from pimco! and the key to understand the markets more on this topic
super zusammenfassung! und der schlüssel zum verständnis der märkte. mehr zum thema
http://immobilienblasen.blogspot.com/search?q=buffet
http://immobilienblasen.blogspot.com/search?q=lbo

dank geht an tweedle-dee und ben http://thehousingbubbleblog.com/?p=1910#comments

U.S. Credit Perspectives / Credit Innovation and Opportunities http://tinyurl.com/y3ljk8
.....financial market innovation has shifted the status quo for individuals and corporations. Thanks to new products in the mortgage and credit markets, homebuyers and corporations can access capital like never before. And with the global economy growing and default rates at historically low levels, investors have been ready and willing to provide that capital.

However, with innovation comes risk. Uncharted waters have not yet been tested during turbulent times. If the U.S. economy slows sharply, today’s healthy risk appetites could quickly wither. Most likely, a deceleration in the economy will diminish the availability of capital, increase volatility, and apply downward pressure on asset prices by raising risk premiums in credit markets from today’s historically low levels.

Innovations in the Mortgage Market
Innovations in the mortgage industry have made it easier than ever for homebuyers to acquire real estate. The home ownership rate in the United States today is at 69%, up 5% in the last 10 years ....mortgage industry’s ability to develop new products that keep initial monthly payments low, enabling consumers to buy homes they could not otherwise afford,(yes they can not afford this kind of houses!)....... Last year, ARMs represented 31.4% of total mortgage originations whereas in 2001 ARMs contributed only 10.2%1. Other examples of new mortgage products include mortgages with maturities up to 40 years, low or no down payments, reverse mortgages, and introductory teaser-rates. Creative financing kept housing accessible despite rising short-term interest rates.
....... Consequently, due to innovation, disintermediation and leverage, housing prices have appreciated significantly faster than nominal GDP growth over the past several years

Ironically, despite a significant slowdown in housing price appreciation and soaring inventories2, credit availability for home buyers is only just beginning to tighten. Why? Investors remain focused on low default rates. In addition, abundant global liquidity continues to flow into the credit markets.....

Nevertheless, innovations in the mortgage market have brought a new and growing class of buyers, including sub-prime, adjustable-rate, and speculative borrowers, into the housing market. In all likelihood, these new players contributed to the rapid appreciation in the housing market over the past several years. However, if delinquencies and foreclosures rise, the prevalence of these marginal players will probably reduce risk tolerances. How the cooling housing market will impact the overall economy is still unclear.

What does seem clear to us is that the tightening of credit for homebuyers we are beginning to see is just that: the beginning. If we are correct, it follows that the influence of leverage and innovation on the housing market will turn and asset prices will be challenged.

Innovations in the Credit Market
As new mortgage products transformed credit availability for homebuyers, credit market innovations have also influenced corporate bond spreads. Credit default swaps (CDS) have grown such that the notional value of all outstanding CDS is now three times larger than the cash corporate bond market (Chart 3). As a result of growing liquidity in the CDS market, corporate bond collateralized debt obligations (CDOs) are increasingly replaced by synthetic CDOs, which are funded with CDS contracts as opposed to cash bonds. ....... Placated by historically low default rates, investors are now comfortable taking on more structured credit risk......

Does credit innovation carry risks? Yes. As we have seen with housing, new home buyers can be lured into buying homes they cannot afford. Ultimately, rising defaults and restricted credit availability will negatively affect the housing market, foreshadowing what is also in store for the credit market. ......... These products (cds, cdo´s, cpdo´s....) and markets are relatively new and, more importantly, have yet to be tested in a bear market. Leverage has been pushed to the point that corporate bonds, and particularly CDS securities, may have limited upside potential going forward. In fact, the explosive growth in leveraged structured credit products globally is likely a main catalyst behind the dramatic tightening in the major U.S. and European credit default indices (CDX and iTraxx) where credit spreads have now reached new tights (Chart 5). We are clearly in uncharted waters.

rest is tied to their tradingstrategies of bonds and derivatives........

uk: regulators wants stresstest with property prices down 40%!

it seems that more and more feels uncomfortable with the level of the bubble in the uk. this would be a "stresstest" that deserves the name. i would assume that with a 40% dive in housepricevalues that any major lender will have big big problems...... i doubt that we will see any of the results in the public any time soon. in the meantime the banks are getting more creative to support the bubbleprices and fule the fire.....

es sieht wirklich so aus als wenn es einigen inzwischen mit blick auf den immobilienmarkt unbehaglich wird. dieser test hätte den namen "stresstest" wirklich verdient. bei einem fall um 40% wäre sicher jede bank in großen schwierigkeiten. i denke nicht das wir in absehbarer zeit (wenn überhaupt) die testrusalte zu gesicht bekommen werden. in der zwischenzeit entwickeln die banken immer neue finnazierungsformen um das ganze am laufen zu halten..

more on the uk http://immobilienblasen.blogspot.com/search?q=uk
and the global bubble http://immobilienblasen.blogspot.com/2006/09/bubble-goes-global.html#links

dank geht an mish und sein http://www.markettradersforum.com/

Banks warned of 'end to the good times' http://tinyurl.com/utjvr

The City regulator issued a warning to the high street banks yesterday that the "clouds were already darkening" and urged them to prepare for the impact of rising unemployment and the knock-on effect on bad debts.

The Financial Services Authority highlighted mortgages based on high multiples to income - as much as five times in some instances http://immobilienblasen.blogspot.com/2006/11/five-times-salary-mortgage-offer-gb.html#links- and questioned whether sales of these products would be monitored properly. (plus the 125% ltv loan...) here a link to a bbc audioreport http://housingpanic.blogspot.com/2006/11/bbc-report-on-125-and-five-times.html
(thanks to keith from housing panic http://housingpanic.blogspot.com/ )

.....In a speech to the British Bankers' Association, he also urged them to conduct stress tests - essentially worse case planning scenarios - to assess the impact of a downturn in the housing market on the business. The regulator believes banks should consider the impact of a 40% fall in property prices and a 35% increase in the repossession rate on their business but stressed that it does not mean it expects such sharp movements to take place.

House prices fell about 15 per cent nationwide in 1989-1992, and in parts of East Anglia by 40 per cent, leading to repossessions, write-downs and bank losses.