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European Stress Tests

|Includes: ProShares UltraShort Financials ETF (SKF)

The statement today by the various EU political leaders that they will release the results of the regions' banks stress tests had me approving, but also thinking of the law of unintended consequences. First, on a purely personal level, I can never shake the image of European leaders as bumbling Inspector Clouseaus, unwittingly opening the door of the tiger cage with their belt buckle as they trip over the mop handle. So I wonder if they really understand the full ramifications of releasing such results, especially if they try to stage manage the process, which I would guess would lead market questions, uncertainty and ultimately pessimistic assumptions about what wasn't released.

But more importantly, I wonder about the impact of such release upon US banks, namely, will a peek behind the curtain of their European colleague's lead to unexpected discoveries or questions about US banks (either for the positive or the negative) in this age of interwoven financial products and relationships. Since the veil of banking secrecy, when torn, usually results in surprise and disappointment, I would venture a guess that these results will not be positive for our financial friends in the US. Believe it may be worth a play on the SKF. We'll see though.

Disclosure: No positions