Stressed Out Over The Stress Tests? You Should Be

The European Stress tests are set to be announced today at 12 p.m. and it seems like we are being set up to fall after announcement of the tests. Everything I've read about how the tests were conducted makes me think that they were too easy on the European banks and that hardly anyone failed. We already know Germany's state-owned Hypo Real Estate has failed, yet they are now a government owned entity and have access to limitless capital, so it doesn't really count. There has been speculation that a couple of German banks could fail, but which names are anybody's guess. The Spanish Finance Minister was way too confident that all of the Spanish banks passed the results, as did Italy's. I would take a look at shorting the European banks on this news. Two banks that come to mind are Santander STD and Deutsche Bank DB and perhaps the Financial Select Sector SPDR ETF XLF right after the announcement.