The widely discussed stress tests were published yesterday evening and showed that capital shortfalls of some of the largest banks were significant. Bank of America (NYSE: BAC), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), and 7 others were being asked to raise roughly $75 billion in order to shore up their balance sheets.

This “test” was meant to see how the top 19 banks would hold up in a worsening economy; using both an opitimistic and pessimistic set of assumptions. I want to focus primarily on the pessimistic assumptions for now; specifically the assumption that the unemployment rate for 2009 would be at 8.9%. Well, Mr. Geithner, just this morning said that there were 539,000 layoffs in April, which brought the total unemployment rate for 2009 (thus far) to 8.9%.

Uh-oh.

We are now facing the most stressful situation the stress test assumed 7 months before the end of 2009, with layoffs occurring at blistering speed each month (though they have slowed). It’s my estimation that an unemployment rate of 10% is far more likely in 2009, which represents a 12% increase over the worst case assumptions of the stress test.

Now I’m not entirely sure what this would do to the capital requirements for the largest banks, but I am sure that it’s worse than we are being told. Obviously I don’t mean to insinuate we’re being lied to, rather the set of assumptions were overly optimistic. I am making sure my clients are well protected against the real worst case scenario and highly suggest you do the same.