Treasury Secretary Timothy Geithner didn't get the reception he was probably hoping for after revealing the new bank bailout plan that may involve $2 trillion: The Dow Jones Industrial Average has fallen over 300 points/almost 4% (at this point), and the S&P 500 has dropped over 4% and the Nasdaq is off by 3.54%. The main complaint: The lack of details. Asset manager Joseph Keating told Bloomberg News, "The lack of clarity [on the public-private investment fund] has the market upset. Nationalization could have been a better outcome for some banks.” Another investment strategist said, “Everybody is disappointed in the lack of details. They came out and said, ‘We want you to believe that we’re still working on this.’ Well, we knew that last night.”
You can read Geither's speech here—the NY Times notes how he criticized the Bush administration's actions by saying "American people have lost faith in the leaders of our financial institutions and are skeptical that their government has — to this point — used taxpayers’ money in ways that will benefit them." CNBC notes the Treasury's four points: "1) It will set up a public-private fund to mop up to $500 billion of spoiled bank assets; 2) It will set up a consumer-lending facility to support up to $1 trillion in new lending; 3) It will devote up to $50 billion to help stem home foreclosures; 4) It will provide new funding to banks after a "stress test" to determine if the bank is healthy."
In other news, the Senate passed a $838 billion economic stimulus package. Now it's up to Congress.
