I’ve been watching the various reactions to the stress tests. I even got online to ask a buddy in Europe for a man-on-the-street perspective (he decided to go to a pub and start a brawl). The general consensus seems to be “Glad we got that farce over with, now we can move on.” But I’d like to offer a different perspective:

Everything is great again:

Seven European Union banks failed the region’s stress tests with a combined capital shortfall of 3.5 billion euros ($4.5 billion), according to the Committee of European Banking Supervisors, which coordinated the initiative.

It is hard to stress how impressive this is. Just a day ago, from data from the banks themselves, we were told to expect a shortfall between 24 billion and 83 billion euros (some estimates were actually higher). Fortunately, the results of these stress tests make it clear that the banks have no clue whatsoever how much money they need. This should fill everyone with confidence. I mean, finance is only their primary function. They should be able to be off by a factor of 10 or more and everything should be fine. Fortunately, the banks can be off on their estimate of needs by a factor of 10, but there’s zero chance of the stress tests being off of their loss estimates by a factor of 10.

Confidence restored (except for those seven banks that failed. They are totally screwed).