The U.S. Government's Worse Case Scenario For The U.S. Economy

This Is The Fed's Worst-Case Doom Scenario For The US Economy -- Business Insider

The Fed just announced that the latest round of bank stress tests will come out Thursday at 4:30 PM ET.

As a reminder, this is the doom scenario banks will be stress tested against:

The supervisory stress scenario for CCAR 2012, which was designed in November 2011, depicts a severe recession in the United States, including a peak unemployment rate of 13 percent, a 50 percent drop in equity prices, and a 21 percent decline in housing prices. The supervisory stress scenario is not the Federal Reserve's forecast for the economy, but was designed to represent an outcome that, while unlikely, may occur if the U.S economy were to experience a deep recession at the same time that economic activity in other major economies contracted significantly.

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More News On the Fed's "Worse Case" Scenario

Fed Unveils Doomsday Scenario for Banks -- CNBC
Fed Tests Big Banks on Scenario Worse Than 2008 Crisis -- eCreditDaily
Citigroup Might Be Surprise Winner in Stress Tests -- CNBC
Fed To Issue Bank Report Cards Thursday After The Bell -- Forbes

My Comment: My worse case scenario is worse than what the Fed is predicting. I was in Russia when everything went into the toilet in 1992, so I have a very good perspective on what can happen. So what is my take from my own practical experience .... 15%-25% unemployment, massive underemployment, inflation, depreciation of the dollar, drop in housing prices, catastrophic drop in commercial real-estate prices, a return to barter.