Banks Might Need $1T More in Capital

So, Timothy Geithner will beginning to report the results of the stress test to the banks, and I do not know the results, but the estimate is scary:

“The headlines, not the details, seem to be driving the markets,” said Frederick Cannon, who is in charge of equity research at Keefe, Bruyette & Woods, a boutique investment bank.

Analysts are already betting that the stress tests will show that banks need to raise significant amounts of new capital, as profits made in the first three months of the year give way to more losses, tied to credit card, commercial real estate and corporate loans. An assessment by Mr. Cannon’s firm, which calculated its own stress test for the industry, concluded Thursday that United States banks might need as much as an additional $1 trillion in capital.

I don't know this guy from Adam, but $1T is a lot of money. US GDP is about $15T.

I would also note that the economy is already doing worse than the worst case in the stress test, so I would expect the final number is likely to be at least twice as much as this.