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A stress test is the Federal Reserve imagining terrible things and seeing if banks survive.

Things like the “stock market falls 50 percent, housing prices fall 20 percent, and the unemployment rate goes back up to 12 percent” says Rebel Cole. He's a former Fed economist and a professor of finance at DePaul University who trains the International Monetary Fund on how to run stress tests.  

Cole doesn’t expect any surprises in today’s Fed results:

“In practice the stress tests aren’t very stressful. The last thing regulators want is to spook the markets. This is about engendering confidence in the banking system" and letting people know that regulators aren't asleep at the helm.

Still, the Fed could be nervous enough to tell some banks to hang on to their cash, and not to give too much to shareholders as dividends or by buying back shares. That part of the stress test won't be made public today.

Anat Admati, a professor at Stanford’s Graduate School of Business, is concerned the banks will get off easy.

“When a company pays dividends or buys back some of its shares, then it doesn’t have that money to invest or back up its debts,” Admati explains, adding that she expects the banks to be allowed to pay out tens of billions of dollars.

Admati says it's in the banks interest to be as indebted as possible -- borrow money when the rates are good, invest it, and reap the majority of the profits for shareholders. Taken too far, that makes banks vulnerable to losses.

Cole says it doesn't make sense for banks feel the need to shovel out cash. A bank's performance is evaluated primarily on its return on equity.

"This doesn't happen in any industry I know of, we usually look at free cash flow, stock prices, but in banking, analysts look at return on equity," he says.    

The easiest way to raise your return on equity, Cole and Admati both point out, is to increase your leverage -- to borrow more.

Shareholders will have to wait a week to see whether the Fed lets banks pay higher dividends and which banks it allows to do so.

This note comes with a little bit of 'ewwww' attached.

The acting president of Venezuela, Nicolas Maduro, said today the body of his late predecessor Hugo Chavez will be permanently displayed in a glass casket so that -- and this is a quote -- "his people will always have him."

Not the first time -- think Mao and Lenin and Ho Chi Minh.

But still. Eww.

So here’s a little mystery, Wall Street style. What gives with the NASDAQ? The Dow Jones Industrial Average and the S&P 500 are at or near historic highs. But the NASDAQ -- the index that tracks mainly tech stocks -- isn’t reaching the same height.

It’s true the NASDAQ did reach a 12-year high this week. It’s just nowhere near its historic level. And given the stratospheric height it reached during the 1990’s tech bubble,  some analysts think that’s a long time off.

“Whether it’s Intel, or Microsoft, the old school, which used to be the high-flying names, are just sort of stuck in the mud,” says analyst Art Howard with Lazard Capital Markets.

And Apple -- which is so big that its fortunes can sway the entire NASDAQ has seen its shares drop 22 percent this year alone.

Economist Nela Richardson, with Bloomberg Government,  says given high unemployment and sluggish business investment, she questions this whole record setting run-up.

“I think how on earth can this economy support the rally that we are seeing in the financial markets,” she says.

Richardson says from where she sits, the slower-moving NASDAQ seems to be a much more accurate economic barometer.

New York City's Chief Digital Officer, Rachel Haot, began in the city's startup world and rose to prominence quickly. Now, she's a member of Mayor Bloomberg's administration and is advocating for more private-public collaboration in making New York a tech mecca that rivals Silicon Valley.

As part of that mission, Haot is focusing on five key areas: Internet access, technology education, open data and innovation, engagement, and developing New York's tech industry.

Hoat's goal, as she puts it, is "to fully realize New York City's digital potential and make sure that all New Yorkers are part of its digital future.” But she feels the city can always do more, especially when it comes to bringing more diversity to the tech sector.

"We still have a long way to go," says Haot. "The good news is that, for example, we have more female founders of startups in New York City than any other city in the world -- more than Silicon Valley, more than London. That's a very exciting and promising step."

Click on the audio player above to hear more of Haot's thoughts on the demographics of tech. And visit WeareMadeInNY.com to find out more about New York City's tech community.

The energy giant says it has "thrown in the towel on solar." The industry has evolved since BP entered the ring, currently emphasizing cheap production rather than research and development. BP says it just wasn't making money, though it will continue investing in other renewable resources.

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The energy giant says it has "thrown in the towel on solar." The industry has evolved since BP entered the ring, currently emphasizing cheap production rather than research and development. BP says it just wasn't making money, though it will continue investing in other renewable resources.

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With across-the-board spending cuts now on autopilot, there's a momentary lull in Washington's budget brinksmanship. So the president is using this window to try to craft a more lasting approach to the federal debt.

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With across-the-board spending cuts now on autopilot, there's a momentary lull in Washington's budget brinksmanship. So the president is using this window to try to craft a more lasting approach to the federal debt.

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A federal judge could rule as soon as Thursday in the case, which comes as the U.S. Supreme Court is also set to deal with gay marriage later this month. In Michigan, a lesbian couple sued because the state bans same-sex couples from adopting kids. Then, the judge invited them to go even further.

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Nogales, Ariz., is home to one of the nation's busiest ports of entry. Trucks line up for inspection before heading to grocery stores in the U.S. But the sequester is forcing the ports to make cuts, leading some to fear higher prices for food and strained relationships with foreign trading partners.

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Widespread police brutality under Hosni Mubarak helped fuel the uprising of 2011. But two years later, many say the police have begun to act like armed gangs, meting out collective punishment in restive areas. The police say they are the victims, under attack by anti-government protesters.

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Widespread police brutality under Hosni Mubarak helped fuel the uprising of 2011. But two years later, many say the police have begun to act like armed gangs, meting out collective punishment in restive areas. The police say they are the victims, under attack by anti-government protesters.

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Two months ago, the popular political blogger left the comfortable world of big media and struck out on his own. His bold new plan: Ask readers to pay to subscribe to his blog.

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A rice enriched with beta-carotene promises to boost the health of poor children around the world. But critics say golden rice is also a clever PR move for a biotech industry driven by profits, not humanitarianism.

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Shifting course in the face of political gridlock, President Barack Obama is making rare overtures to rank-and-file Republicans. He invited GOP senators to dinner Wednesday.

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"That's one small step for man, one giant leap for mankind."

It's one of the most famous phrases in the English language, and it was relayed live from the moon via a radio system that a man named Dean Cubely used to manage. These days, Cubely works as CEO of ERF Wireless, and still uses radio waves hopscotched over short to medium distances. His mission? To bring high-speed wireless Internet to places that wires or fiber optic cables can’t reach. 

Cubely joined Marketplace Tech host David Brancaccio to share his vision for a fully connected America.

Senator Rand Paul has ended his filibuster blocking Senate confirmation of the president's CIA nominee John Brennan. The filibuster lasted 12 hours and 54 minutes.

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The U.N. Security Council demanded the immediate release of the 21 peacekeepers who were seized in the Golan Heights area between Syria and Israel. A Syrian rebel group called the Martyrs of Yarmouk claimed responsibility.

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When President Obama signs an updated version of the Violence Against Women Act on Thursday afternoon, the law will include new requirements for how colleges and universities handle allegations of sexual assault.

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When President Obama signs an updated version of the Violence Against Women Act on Thursday afternoon, the law will include new requirements for how colleges and universities handle allegations of sexual assault.

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