Tomorrow' results of stress test on European banks have somewhat been counteracted by a flow of optimism, largely unjustified, that is today spreading through markets on both sides of the Atlantic.
Some fact that ought to be remembered:

1) America is still the engine of growth through consumption: without a convincing growth in jobs (today's jobless rate still shows a very weak labor environment), there is no potential recovery for European exporters, and for sustainable banking profits
2) About 1.5 trillion banking debt will become due, in Europe, over the next couple of years: refinancing will not be straight forward
3) German Landesbank have already anticipated that they will not publish their results
4) Hypo Vereinsbank, where German government has already injected tens of billions of euros is said not to pass the test
5) Stress test criteria are too mild to serve as a true test at times of possible defaults of one or more member states
6) Swiss banks - a duopoly in Switzerland is far more fragile in case of crisis- are not part of the stress test.

After a likely initial positive reaction expect people to concentrate on what is not being said.
 

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