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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