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Update: The Senate just passed the Economic Recovery and Reinvestment Act (Jobs-stimulus bill) by 61-37.
After giving a speech designed to reassure markets and the banking industry, Secretary Geithner must be disappointed by the market’s initial reactions. Via the NYT, here are the major components:
— A new program, jointly run by the Treasury and the Federal Reserve, with financing from private investors, to buy up hard-to-sell assets that have bogged down banks and financial institutions for the past year. The program, often described as a “bad bank,” is expected to spend $250 billion to $500 billion.
— Direct capital injections into banks, which would come out of the remaining $350 billion in the Treasury’s rescue program.
— A vast expansion of lending program that the Treasury and Federal Reserve had already announced, which is aimed at financing consumer loans. The two agencies had originally announced their intention to finance as much as $200 billion in loans for student loans, car loans and credit card debt. Instead the program will be expanded to as much as $1 trillion.
A separate $50 billion initiative to enable millions of homeowners facing imminent foreclosure to renegotiate the terms of their mortgages is to be announced next week. . . .
It will also renew a legislative proposal giving bankruptcy judges greater authority to modify mortgages on more favorable terms to borrowers and over the objections of banks.
More details are available at the website for FinancialStability.gov [pdf].
Geithner seems to have been counting not only on the assurances his mostly non-punitive measures gave the market but also on the sheer magnitude of the effort. But so far, the markets are not impressed:
The stock market, which had been trading down all morning, fell sharply after Mr. Geithner spoke. By 11:45 a.m., the Dow Jones industrial average was down more than 280 points. The broader Standard & Poor’s 500-stock index fell more than 3.6 percent.
Every sector of the market was trading lower, with the Standard & Poor’s financials index falling the most, reflecting uncertainty about the banking system and how the government’s latest plans would affect major financial companies. Shares of Bank of America slid more than 5 percent, and Goldman Sachs and Morgan Stanley also fell.
[As of 12:30 Eastern, the Dow is now down 275 points -- about 3.3%.] Listening to coverage on CNN and elsewhere, I was struck by how underwhelmed everyone seemed, even though they acknowledged that the numbers being offer should be overwhelming. A trillion here, a trillion there — it doesn’t phase us.
I’m surprised that after Geithner talked about the need for transparency, public input and accountability, and after describing what for many is a very complex program, Geithner gave his speech and immediately left without answering questions. [eCAHNomics reports Geithner appeared on CNBC, and he also talked to NBC's Brian Williams and others?]
Update II: First reactions: Krugman, Brad DeLong and Reich are also puzzled about how the program works.
Do these people not understand how to roll out a program?
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Geithner did followup Qs on cnbc. I tuned in toward the very end, so I mostly missed it, but the cnbc anchor patter afterwards was very negative. Billing it as “no plan.”
that money needs to go for jobs not to finance gambling losses
Maloney up on cnbc. “Good new beginning” but wants to hear more specifics.
Heh. Gambling losses. Maybe Geithner plan should have 12 steps?
Maloney punts when asked about most of the program is done by FRB as an end run around transparency and congress.
Someone once said we need change..”yes we can”? hmmmmmm…
Abolish the stock market. Unnecessary for economic sustainability. Simply a way to vacuum money to the top. Couldn’t care less what the mythical “markets” think about anything.
Glorified Las Vegas, only without the all-you-can-eat buffets.
Dear lawmakers, president & treasury secetary
Why are we bailing out the shareholders?
Why are the executives who got us into this mess still to be employed?
Why are the illegal insurance contracts “CDOs or CDSs” not rescinded, especially the ones that enable third parties to profit from, and have a vested interest in, the failure of others?
And you titles deliberatly start with lower case letters, because you have yet to earn the respect that upper case letters provide.
Taxpayer
669069675
Thorstein Veblen would agree.
And why no limits on usury fees banks can charge in exchange for govt largess?
Shit
Damn
Fuck
Plan was too vague.
check out elliotts dairy
there’s a youtube of bernie sanders talking to msn
she’s being a tool and has the nerve to ask;
“why do social programs beling in a stimulous package?”
what kind of tool is that?
paying off these bankers gambling debts is a social program for the very people who raped and pillaged our economy, it’s welfare, it’s an entitlement and obama needs to stop even the consideration
(If the otherwise eloquent LHP can do it…)
The Senate vote on the stimulus:
Isakson, No
Chambliss, No
Rockefeller, Aye
Grassley, No.
Lugar, No. …….
But, but, …. Grassley and Lugar are moderates!
Thanks for the tip about CNBC. Still, I think his audience has to be the public and the congress.
ANy details from that interview?
they are just doing what they did all through the campaign. lots of nice words, but short on specifics and very short on actions.
No. I don’t know how to retrieve it & give a link.
Switched back to msnbc.
Sanders missed that one. Would have been a perfect rejoinder.
Ok…one question.
When I lose my job in April (whistleblower), who/how will the mortgage get paid?
I think that Geithner’s speech was not even nice words.
Stimulus bill passes Senate 61-37.
There was a crooked man, and he went a crooked mile,
And found a crooked sixpence against a crooked stile,
He bought a crooked cat, which caught a crooked mouse,
And they all lived together in a little crooked house.
Yes. Interesting now to see what emerges from the bloodletting to ensue in the conference committee.
Not sure what your situation is. Are you saying that you could be a whistleblower, but if you do you’ll lose your job? If so, I’d recommend you blow the whistle anonymously. Don’t use your own computer to type docs, print them at a copy shop, handle paper with gloves on, mail without return address from a post office far away from where you live (mail first to a trusted friend if you have one to pass on & warn that person to handle docs with gloves), and make sure you use self-stick envelopes & stamps. Send to investigative reporters, possibly members of congress, or TARP oversight, but not to anyone in chain of command. Give them info they can confirm.
A fair bit of the tradecraft familiar to an intelligence agent. Scary.
If I heard correctly Reid is on the conference committee. We’ll see what the Dems are made of. As if we don’t already know.
It’s pretty much common sense, if you think about it for a couple of minutes. Or watch the CSIs. *g*
Sounds like a title waiting for a diary to be written.
Yep. How can I do this and not get hammered?
Gotta hand it to him. Obama’s really charming with the audience Qs. Gives a hug & a kiss to woman who has urgent need on homelessness.
Oh, I’m sure much better writers than I will have plenty to say after we see what comes out of conference.
If the Republicans aren’t going to play ball anyway, I would really like to see an aggressive rewrite. They’re not going to vote for it-it could be a bill Norquist would love, and they’d try to kill it just to give Obama a bloody nose. So f*ck ‘em. Write the bill we want.
Practice, practice!
Bluntly, gifts of taxpayer money to the banks’ owners and executives. Why do I say “gifts”? Because there is no control. The bankers’ can loan it to their children, the RNC, or whomever. If we have no control, we should have no expectation of repayment, even if we get nonvoting stock.
Or voting stock. Nothing is worth nothing.
This will still have to get the 60 votes in the senate after it comes out of conference.
AND THE KILLIN’ GOEZ ON AND ON AND…
Citizen Scarecrow and the Firepup Freedom Fighters:
“But so far the markets are unimpressed.”
With all due respect Brother Scarecrow, anthropromorphising the stock market is the same as giving life and meaning to the latest sports game-line in Las Vegas…FOR CHRIST’S SAKE, the Dow as well as the fuckin’ latest line in the East Elbow Creek vrs. Pumpkin Falls middle school volleyball match are fantasy!!!
We gotta remember that the “unseen hand” behind the market is attached to the arm of the wealthy and the powerful and it is neither the determiner of real value or the arbiter of good economic policy.
The loss in the Dow is a reflection of the intent of the monied class ta fight this out to the last retiree and widow and orphan.
I’d like to see them try to kill it. It like to see them there day after day reading the phone book as the unemployment statistics trail across the bottom of the screen. I’d like to see how long it would be before there were anti-republican riots in the streets.
Why should the taxpayer continue loaning/giving money to criminals in hope they might decide to loan it back to us at a markup, if we are real lucky?
Obama has the Ft Meyers audience wrapped around his little finger.
Firepup Freedom Fighters:
Has it become clear yet that this battle will not be ended in compromise or truce…the monied class is all in RIGHT NOW, for God’s sake!! Political power at the ballot box and the power of the Justice Department to start criminal prosecutions are the only weapons we have besides the weight of numbers in the fuckin’ street!! Does anyone out there get it yet???!!!
The elites are going to kill the entire economy in an attempt to cover the losses of the big banks and insurance companies.
They care of nothing but themselves and their fellow elites. THEY HATE YOU.
Hey man, did the Lakers win last night, dude? Gotta go check on my fantasy team numbers…be right back.
The market is down because investors are realizing that things are going to get worse for a year and a half. Market looks out 6 months. Anything past that is doomsday as far as the ‘investors’ are concerned. I think what we are seeing is a slow erosion in denial. Be interesting to see what happens when they get into anger. Who is going to be the object of that anger?
Who is going to be the object of that anger?
Immigrants, and the beneficiaries of Social Security and Medicare. Count on it. The scapegoating will be sickening to see.
Scarecrow,
I would welcome any insights you might have on my latest diary on the Infrastructure Bank.
Might I also suggest an important tool for whistleblowers?
WIKILEAKS!
Their website has greatly detailed info on how to get evidence to them secretly. They help in various ways to give as much safety as is humanly possible.
And this is because it serves not only the US, but the world, and there are many countries where folks rightly fear for their lives for telling what they know. The Wikileaks staff take this mortally seriously.
Many important scandals have been revealed there, including secret corruption at the Penagon and banking scandals, to name just two types of items. It’s for both governmental and corporate whistleblowing.
Good luck to any potential whistleblowers out there. Be careful, and heed the type of advice given at Wikileaks.
The reason the stock market continues to fall is that this “plan” does not in fact (and is not designed to) resolve the actual value of the notes held by the banks, and so the actual balance sheet of the economy. The public and the shareholders and management of the non-financial businesses KNOW this is all a sham, that the cost has not yet been paid, and will NEVER be paid until it is accurately totaled — and so the insecurity in stock value and in consumer spending.
The financial “elite”, the thieves and gamblers who created this situation, along with the politicians and the legislation they bought, are desperately trying to avoid accountability, and will put the public and the republic into a catastrophic situation before they are taken to task. And if they can, they, like the masters of Japan, will happily put the U.S. (and possibly the world) into two decades of depression, recession, inflation, and stagnation and all of the social distress that entails, in order to maintain their hold on power.
Make no mistake about it, Geithner’s press conference today was a naked exercise in power, “Hello, we’ve lost all our money, and so we’re going just going to take yours and eat our caviar while you choke on stale crackers. Vote new leaders in? Hah! We own them all. Fuck off and die; we own you and everything you think you own!”
“Do these people not understand how to roll out a program?“
Quite possibly they do. But first you gotta have a program.