Business week in review

Fed says 18 biggest US banks in stronger position

Under the stress tests' most severe scenario, the United States would undergo a recession in which unemployment would reach nearly 12 percent, stocks would lose half their value and home prices would plunge 20 percent.

I'm not sure of the value of a stress test in which the most severe scenario isn't all that severe.  I mean, we arguably already have 12 percent real unemployment, home prices are (the last time I checked) about 20 percent above the long-term trend, so a 20 percent drop in home prices wouldn't be terribly surprising at this point, and stocks are currently somewhat overvalued and a 50 percent drop doesn't seem that unlikely.

Payrolls Rise as U.S. Jobless Rate Reaches Four-Year Low

The decline reflected both a gain in employment and an increase in people leaving the labor force.

Another example of how lowering the bar makes some things look better than they were.  People leave the labor force, unemployment drops, and potential GDP also drops.  We'll close that recessionary gap one way or the other.

Jack Welch: 'I'd Give Einhorn the Back of My Hand'
So would I.  Of course, I'd give Jack Welch the same.

Former General Electric (GE) CEO Jack Welch says Apple (AAPL) deserves better than the treatment it's getting from David Einhorn, the hedge-fund manager pressuring the iPhone maker to cough up dividends.

Since when does a corporation deserve better treatment than it gives its shareholders?  Personally, I've been thinking that AAPL's senior management is considering taking the company private and moving.  Everyone else seems to think the company should buy back shares... why not buy them all back?  Move to some other country where the tax rate is more business friendly, and free up that cash horde.  Just a thought.