Stress test Part 1

So all the banks passed the first step of the Federal Reserve’s latest stress test on capital ratios.

The more meaningful number comes out next week when the Fed weighs in about whether to  allow certain troubled banks (Citigroup, Deutsche Bank and Santander) to raise dividends.

Looking at the ratios these banks listed as well as Goldman Sachs and Morgan Stanley just passed the 8 percent threshold, so news bad banking news could come out next week.


Although I have stated economically there will be no reason for the Fed to raise rates this year, but said politically they may raise in Q3, it appears the adults in the room don’t entirely agree with me.

Movement on the 10-year note is pretty astounding over the last week or so. At the beginning of the month to 10-year stood at 1.65% today it’s at 2.11% yield.

Plenty of selling pressure. Now whether its investors moving out of bonds to protect themselves from falling prices or moving cash into the EU is a guess right now since no data is available.

The yield is a pretty decent return if you believe the Fed stays ZIRP bound for 2015

 

 

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