Regarding the just announced 2nd round of stress tests for the banks, I have but one rhetorical question:
If a loss falls on a bank balance sheet, but no one is there to mark it to market, does it affect their capital?
ps - In case it wasn't painfully obvious, I'm channeling my inner "If a tree falls in the forest and no one is around to hear it, does it make a sound?"
pps - Banks are currently holding a metric crap ton of mis-marked home equity loans and second mortgages. Unless the stress tests plan to treat these bad loans realistically, Stress Tests Part Deux will be a total farce.