Juggling Dynamite

This week we learned the outcome of the third round of bank stress tests performed since 2009 in accordance with the Dodd-Frank Act.

“Citigroup (C) outperformed all of its peers after failing the test in 2012. Last year the test results showed that a total of four banks (including Citi) would not withstand an economic shock; the other three were Ally, MetLife (MET) and SunTrust (STI).

What does this mean about the state of the U.S. banking system? William Cohan, Bloomberg TV contributing editor, and author of several books on US banks, says, “not much”.

Here is a direct link to the video interview.

“In support of this position, ECRI Co-Founder and Chief Operations Officer Lakshman Achuthan points out correctly that the timing of recessions is often determined only with the benefit of hindsight–often through revisions of prior numbers that initially did not show a recession. Achuthan thinks that, when the final revisions are in, they will show a recession that began in mid-2012.

Achuthan also points to several other measures that he says are consistent with recessions. This data, in his opinion, illustrates that the economy is in fact in a recession. (See charts here).”

Here is a direct link to the video interview.

Danielle was guest yesterday with Phil Mackesy on Talk Digital Network discussing recent trends in the world economy and markets. You can listen to an audio clip here.