09:18 – I’ve just been reading the results of the Spanish bank “stress test”, which concludes that under the “adverse scenario” Spanish banks may need a bailout to the tune of up to €60 billion. The problem, as with all of the past “stress tests”, is that the “baseline scenario” is simply ridiculous and the “adverse scenario” is in fact the rosiest possible scenario. Here’s their explanation of their scenarios.
The adverse scenario was deemed by the Steering Committee to be appropriately conservative, both relative to the past 30 years of Spanish macroeconomic indicators (the economic scenario being three standard deviations away from long-term average for the three years of the exercise), as well as relative to adverse scenarios used in recent stress tests in peer jurisdictions (e.g. the EBA Europe-wide stress tests and the US CCAR). Moreover, the adverse scenario included a third year of recessionary conditions, unlike the two-year period commonly seen in other stress tests. (See Appendix: Macroeconomic scenarios for further analysis).
The reality is that perhaps €150 billion is about the best they can possibly hope for, and €250 billion or more is certainly not out of the question. Imagine that for the last 30 seconds a bicyclist has been riding along on more-or-less level ground, with small ups and downs. That’s the source of the historical data for their scenario. But a couple seconds ago, that bicyclist drove off a cliff, and he’s still falling. What they should have done was use historical data for only the past two or three years. Instead, they buried that recent, more significant data, with 28 years’ of long-term averages. Geez.
13:10 – Uh-oh. Barbara’s over at her parents’ old house cleaning things out. I just took Colin for a walk down the corner and back in drizzling rain. On our way home, I spotted what I thought was a kid’s bracelet or necklace in the middle of the street. Upon closer examination, I concluded that it was a dead juvenile Carolina Flatsnake (Snakus flattus carolinensis). I need to remember to mention that to Barbara before we walk Colin again after she gets home. I’d hate for her to be surprised.
I just shipped the last two biology kits we had in stock, along with two chemistry kits. Two customers each ordered one of each kit. We still have a dozen chemistry kits in stock and half a dozen more biology kits and 15 chemistry kits downstairs ready to pack up, which means I really need to get to work on making more of the biology kits.
16:10 – Three cheers for Whitney Kropp, the teenage girl in Michigan who was the victim of what the MSM describes as a “prank”. In fact, it was a vicious attempt to cause her pain, an unpopular student whom a bunch of punks decided as a “joke” to elect to the homecoming court. When she found out that they were making fun of her, she considered killing herself. Some prank. Instead, she decided to show them they were picking on the wrong girl. When the story hit the news, Whitney found overwhelming public support. Local businesses and the public, local and remote, donated funds or services to buy her a prom gown and accessories and treat her to a makeover. She attended the coronation surrounded by cheering fans.
And what I can’t figure out is why these vicious children were making fun of her appearance. No, she’s not drop-dead gorgeous, but she’s certainly a reasonably attractive teenage girl. What is their problem?
Kudos also to her date. I suspect there were a lot of guys lined up to be her escort. And I hope those punk kids realize what miserable excuses for human beings they are.