VP of Common Sense

Stress Testing: What's Your Bank's AQ?

In my opinion this test might as well be called a transparency test. The banks that the market "understands" are valued more highly that those that the market does not. For example, almost all of us agree that Citi has ginormous skelatons in the closet that we have yet to see. Collectively we are so sure of it that their stock price has been hammered.

Anyway, my guess is that the best opportunities for an investor lie in the middle group, be it long or short.