Hey, Look, The Stress Tests Really Weren’t Stressful Enough

Calculated Risk illustrates what we already knew: the bank stress tests weren’t nearly stressful enough.

The chart below looks at unemployment by quarter.  The green bars are the "base case" in the stress tests (the most likely scenario, in the government’s opinion).  The blue bars are the "adverse case" scenario–unlikely but possible.  And the red bars are what’s actually happening (Q2 is a forecast).

The larger story here, unfortunately, is that the Obama administration continues to blow its credibility on the economy.  By being too optimistic from the get-go, the administration is opening the door for critics and opponents who are already arguing that the Obama plan has failed.