Expected Unemployment Rate In Bank 'Stress Test' Looks Pollyannish

With the unemployment rate at 8.1%, we are already getting close to the "baseline scenario" in the Fed's bank "stress test".

The Fed's "baseline scenario" for 2009 unemployment is 8.4%. Unemployment under the Fed's "adverse scenario" is seen at 8.9% for 2009.

Since we are already at 8.1% unemployment and losing 600K jobs per month, the Fed's "adverse scenario" of 8.9% unemployment is looking pollyannish and the "baseline scenario" of 8.4% is looking ridiculous.

Banks that will be run through the stress-test include: Bank of America (NYSE: BAC), Wells Fargo & Company (NYSE: WFC), Citigroup, Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM), among others.

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