The Slog has been digging around in euromarkets, credit agencies and currency dealers for the last three days. Our subject: the bank stress tests. We’re only talking a dozen or so people here, but they span five countries and the feedback is very consistent.

“The U.S. stress tests worked partly because they were rigorous, but also because the [U.S.] Federal Government uniequivocally gave its word to sort out any emerging problems,” said our man in Madrid. “Europe lacks any credibility when it comes to action.”

“Non-disclosure of the method and coverage of the stress tests was a major error” said a German contact, “but one the EU couldn’t avoid. We suspect giving the details would have made everyone even more nervous”.

“The market doesn’t believe in a euro managed by lightweights” a London dealer bluntly told us, “they need a highly-regarded hard-case in there to tell analysts how and when. They think they can bluff it, which is laughable.”

“Some EU member States are in dire straits” a US Swiss-based credit manager observed, “they’ll be donating bailout one week and receiving it the next. Also there is real doubt out there about how far the strong will go to underwrite the weak. There are rallies of course, but that’s all they are. The euro is in deep trouble.”

In his opinion column at the Reuters site, James Saft amusingly notes that ‘European officials are orchestrating the bank stress tests like Pacific islanders speaking into coconuts and waiting for cargo to drop from the skies….they both make the elemental error at the heart of all cargo cults – they mistake necessity for sufficiency, and hope that imitation and affect will make up for a lack of substance.’

That’s as good a summary as you’ll read anywhere – and it reflects the market pulse exactly.

Related: Lagarde ‘secret squirrel’ won’t do. The fantasy that is Spanish Inquisition.