TEXT OF INTERVIEW
Renita Jablonski: The unemployment rate is now at 8.9 percent. The government just announced employers cut 539,000 jobs in April. That's actually less than expected, and the smallest loss since October. That'll probably take a little stress of the markets this morning.
So will the results of those bank stress tests the government announced last night. It turns out 10 of the country's top 19 banks need more capital. The banks need to tell the government how they'll raise a total of $75 billion by June 8.
Edward Hadas joins us now from London. He's with the financial commentary Web site Breaking Views. Good morning, Edward.
Edward Hadas: Good morning.
Jablonski: OK, the results are out. Do you feel better?
Hadas: Feel a little better, but there were so many leaks beforehand there wasn't much news there. What really makes us feel a little bit better would be that the markets have rallied and that means that the banks will probably be able to raise the $75 billion mostly from the equity market and not have to turn to the government for yet more cash.
Jablonski: Throughout this process, we've heard the Fed and Treasury didn't really go too deep with these tests. What do you think?
Hadas: It does look like the so-called stress scenario was not all that stressed. If we had a terrible, terrible recession that goes on much longer than is currently expected, then they might have to be a super stress test and there might yet be more need for capital. But so far, this looks like a reasonable starting point, given where the economy is and where sentiment is right now.
Jablonski: You mentioned those leaks. I have to ask you, what did you make of the government dripping out all of this information ahead of time?
Hadas: Well, if a private company did that, it might cross some borders of disclosure of information. But in this case, it made some sense. It enabled the government to find out what the market was looking for, and enabled the market to absorb the news before it came. So by the time the announcement came, the market was really very ready for it, and indeed was taken as better than expected.
Jablonski: Edward Hadas is an editor for the financial commentary Web site Breaking Views. Thanks so much.
Hadas: Thank you.