Many of the banks in the United States are going through the government’s bank stress tests. Some reliable authorities are saying that the fourteen largest banks will all get a passing grade in these tests.

The Federal Reserve recently stated that “most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized.” Others say that only 1-3 major banks need any additional capital.

Does that mean that we can now sit back and relax? Have our largest banks made it through this very difficult recession? Are we home free?

These are important questions for all of us. We would all like to see this economy return to normalcy.

Many corporate professionals are feeling job insecurity.

Even those who have a secure job know of family members or friends who are feeling insecure in their job.

It wasn’t too many years ago that I had a burning desire to get out of my corporate job as a chief financial officer. I was completely burned out. Besides, I was close to retirement age, but couldn’t afford to retire.

Fortunately, I made changes that eventually allowed me to retire from corporate America.

If you are concerned about your job, I think it is important to have a good understanding of the economy in determining your course of action.

The purpose of many of the articles I write is to express my viewpoint on the status of the economy.

Let me emphasize that what I write about is only my opinion. You don’t have to believe what I say. You shouldn’t rely just on my opinion. But my educational background and corporate experience has allowed me to be very accurate in what I write.

So where does our economy stand today?

What about the results of the bank stress tests? Do they mean that the economic recovery is on the horizon? Is the worst over?

If you want my opinion, I don’t think these banks are very healthy. I feel that there has actually been further deterioration in their financial condition in the last six months.

I have 2 major concerns with the government bank stress tests. :

1. The U.S. Treasury is conducting these tests. There is apparently the direct involvement of the White House.

These tests should be carried out by independent banking agencies without any political interference. Because of the political involvement, these tests cannot be trusted and are worthless.

2. The government bank stress tests are based on extremely mild premises. The “worst case scenario” is only slightly worse than the economic conditions we are experiencing today. Therefore these tests are unreliable.

Just a few months ago, we were told that these banks would face a “fatal financial meltdown” without a major bailout of taxpayer money. Now these banks are healthy again and are reporting high profit levels for the first quarter of 2009.

What caused this miracle turn around? What has occurred in the last few months that allowed our banks to go from financial collapse to a healthy status (according to the federal government)?

So is our federal government not telling us the truth? Surely not!

Federal Reserve Chairman Ben Bernanke recently assured us that the economy would bottom out and start recovery in 2009.

Let’s take a look at what Bernanke said back in 2008. He stated that the total losses from the debt crisis would not exceed $100 billion and could be written off.

Soon after that statement, the International Monetary Fund (IMF) stated that the debt losses would be approximately $1 trillion and only a small portion of that would be written off.

Recently, the IMF estimated that the losses would exceed $4 trillion and only one third of that amount had been written off to date.

So what does that mean?

For one thing, Mr. Bernanke’s estimate of the severity of the credit market crisis was grossly understated.

So why should we believe him?

It also shows that banks must write off an additional $2 trillion. This indicates that banks have a long way to go in this debt crisis.

As of December 31, 2008, several major banks had massive exposure to defaults by their trading partners in derivative transactions. Goldman Sachs derivative exposure as a percentage of its risk-based capital is 1,056%. The percentage for HSBC Bank USA is 550%; 278% for Citibank; JPMorgan Chase is 382%; and Bank of America is at 179%.

This is a huge amount of exposure. It indicates that banks will have major losses in the next several quarters.

In the last several months, much of the focus has been placed on the major banks. Little has been said about regional and smaller banks. However, we are seeing a significant increase in defaults of commercial real estate loans. This indicates that we’ll see far greater losses for these banks in the second phase of this crisis.

The United States federal government has consistently understated the severity of this debt crisis. They have now rigged the results of the recent bank stress tests. This gives the impression that even the riskiest of the fourteen largest banks is still safe for you to place your money.

I feel we are far from reaching a financial bottom in this economic downturn.

Job insecurity is a scary thing to go through.

One thing to remember is that most people will not lose their job. Some will.

My recommendation is to have a backup plan, a Plan B. Fortunately I developed one several years ago. My backup plan was to go into internet marketing and get good internet network marketing training.

I didn’t sit back and just hope that my job situation would get better. Instead, I took action. This helped to reduce the tremendous stress I was under. I slept better at night. And it wasn’t necessary for me to leave my corporate job to implement my backup plan.

Your course of action is completely up to you.

Scott Hubbard has retired from 25 years as a Chief Financial Officer in Corporate America. He now enjoys teaching corporate professionals and network marketers how to apply attraction marketing online and how to generate free qualified MLM leads on the internet.

He is happy to give a free consultation for those having a serious interest in being an entrepreneur. You can reach him toll-free at 877-878-4036 or by email at Scott.Hubbard3@gmail.com. You can learn more about Scott by going to his blog at http://www.YourGuideToRetirement.com.