European Stress Tests Minimized Risks

This is not really news, but now it's quasi-official--the WSJ has spoken--and spreads are affected (h/t Calculated Risk):

LONDON—Europe's recent "stress tests" of the strength of major banks understated some lenders' holdings of potentially risky government debt, a Wall Street Journal analysis shows.

From Calculated Risk:

After the WSJ story last night on the European stress tests, here is an update on a few European bond spreads:

The 10-year Ireland-to-Germany bond spread has risen to 376 bps. This spread is larger than during the financial crisis in May when the spread peaked at 306 bps.

The 10-year Greece-to-Germany bond spread is now 946 bps, just below the peak level of 963 bps in May.

The 10-year Portugal-to-Germany bond spread is now 351 bps, just above the peak in May of 349 bps.

Day of Protest

Today is the long-awaited day of strikes and protests against retirement reform. So how's it going? Let's have some eyewitness reports, so we can add to the "police estimates" and "organizers' estimates" of participation our own French Politics estimates. I've often wondered whether the police derive their estimates by taking the organizers' estimates and dividing by five, or vice versa. So, given the invariably disappointing and easily inflatable/deflatable elasticity of the quantitative, let's aim for some qualitative evaluations. Do the people you talk to believe that the government has fixed its policy once and for all, or is there some flexibility? What do they think ought to be done? Do they believe reform is necessary? How do they define pénibilité, and how should it be taken into account? Would they favor increased contributions (for all? for some?) over an increase in the retirement age? Etc. etc. The floor is open.