So the New York Times reports that Bank of America needs a "cushion" of $33.9B. This is on top of the "fluffy pillow" of $20B it got in January and the "warm blanket" of $15B it got in the fall.
This must be particularly surprising to them given that as recently as March they thought they could pay back the first $45B.
This is a leaked result of the stress test. The stress tests were supposed to model what the banks' capital structure would look like if:
- Unemployment hit 8.9% in 2009 and 10.8% in 2010 [March: 8.5%]
- Home values dropped an additional 22% in 2009 [Q4 2008: -6.5% ~ 23% annualized)
- The economy contracted by 3.3% [Q1 2009: -6.1%]
Doesn't look that much more stressful than real life right now.
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