We await stress tests but more analysis to follow

The European Banking Authority will release the results of their stress tests of 91 banks at 12pm est. While the results will render a pass/fail grade, a 2nd and very necessary analysis of the data will take place after by the rest of us. I say this because again, the tests don’t assume any sovereign default, particularly from Greece, just as Greece is about to be forced into a default. The results will show all the holdings of sovereign paper that the banks own and then it will be left to analysts to slice and dice it to come to a more comprehensive conclusion on who needs money and who doesn’t. An Irish newspaper is already saying their banks have passed but they passed last time only to fail a few months later followed by another recap. Ahead of the results, the troubled debt in Europe are all trading poorly again with the Greek 2 yr note in particular at a new low. The lower House in Italy should pass their budget package today.

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