Bank stress tests in Europe

So out of 90 or so banks only 9 of them failed the European Stress test which means that only 10 percent of the banks are risky. I don’t think so. The tests were supposedly done on a worst case scenario. But who knows what the next worst case scenario will be. The banks are only sound at the level of the stress level and may or may not be sound under other conditions. Further more if there is a panic in the financial markets and runs on the bank even the soundest of the banks which may have passed the stress test will fail or may need governmental help in dealing with the crisis.

The market took the test result at face value and has moved on. But it should not. I am as skeptical as everybody else regarding these stress tests. If in this crisis the mighty investment banks failed with tremendous power and resources at their hands how can we be sure that the next time, these same banks that have supposedly passed these stress tests will fare any better. Next time maybe it will be something else which can knock down these banks. So all I can say now this is the Stress tests should be done each year with stringent requirements escalated upward so that we may be absolutely sure that the banks can withstand the next financial crisis.

The Case for Tuition Increases at State Colleges

There has been an ongoing debate about whether to give the State Universities in New York State to increase tuition as they please without legislative approval. The governor is all for it while the legislature is dead set against it. I believe that the State should give them the authority to raise the rates as they please but with regulation that the students aid will increase with corresponding increase in tuition. Already the State each year keeps on cutting the aid to the colleges and then they expect the colleges to spend and keep more students in their schools. How can that be possible?

The legislature is concerned that the colleges will raise tuition and it will hurt the poor students. But you know what it is already hurting the poor students because the state cuts the aid each year and then try to dictate their own agenda on the colleges. This has to stop. We all need independent universities and colleges since the name just reflect that they are owned in name only by the state since most of the budget is self generated. If the tuition is increased then the students may hurt in the short term but they will adjust since they are getting a great and quality education at low prices as compared to other states. It will hurt students also but in the end it will attract quality students and great teachers.

On the lighter Side- Movies – Eagle Eye

Shia Labeouf and Michelle Monaghan star two strangers who are targeted by a female voice who tracks their every move and wants them to perform a certain task otherwise they will be killed. Billy Bob Thornton stars as a federal agent tasked with tracking both of them down. It is a constant non stop action film and it never bores you but at the end it is too far fetched to be believable. It reminds of an earlier film starting Sandra Bullock called The Net with somewhat similar premises but that movie was in the mid nineties and this is an updated version. Good action movie. Recommended.

Car maintenance-2

Apart from the previously mentioned expenses, the biggest one is the insurance. No matter even if your car is parked in garage, you still have to buy insurance and this is the biggest ongoing expense. In order to get a good rate, you must be living in a nice town and have a perfect (meaning no points) driving record. Otherwise you get hit by enormous premiums. Another part of having car maintenance is that even if you buy your car in installment with interests involved, you cannot deduct it on your income tax returns.

So you should always know a thing or two about your car so that you don’t get duped by unscrupulous and shady mechanics (and they are out there believe me) when it is time to fix up your car. A triple A membership should also be considered although not mandatory. So like a house, you need car insurance more than ever since you will be on the road and constantly dealing with other drivers who may or may not be as good with their cars and driving habits. And you don’t want to know what happens if you don’t take care of your car and it breaks down just when you are in a hurry to go somewhere.