The market is reacting poorly because they were hoping that Geithner would be as big a fool as Paulson and sign over the entire Treasury to our capitalist heroes. Any delay of that, even if vague, lessens its likelihood.

I can see the One didn't want to answer any questions yesterday about his administration's "financial rescue plan" since it was made crystal clear by the tax cheat that no such plan exists.

What a pathetic performance by the guy who was "indispensable" and had to be Treasury Secretary. Yeah, he'll be a lot better at handling TARP II, III and IV than Paulson. LOL

Uncertainty seems to be a good thing is it reduces the expectation of the citizens for a bailout.

There is a problem, right in front of our noses. We are unable to see it because it involves some risky restructuring of government.

I guess we will have to learn to live with hysteria until we can calmly look for the bottleneck in our economy.

Simon Johnson has said that the stock market going down in response to the speech is a good thing. It means that they are expecting the stress test to be real, and the Federal money for Paulson's golfing buddies is over. Good!

Right, need to look at how financial stocks did. If the market thinks existing, private holders are going to get dilluted to hell byy massive government conversion to common stock (i.e., nationalization), bank stocks will fall like stones. On the other hand, if the investor class read the plan as one that would let the offenders off the hook, the market would have risen. Always the follow the money.

As expected, Geithner is as precise about the plan as he was about filing his taxes.

If the market is any guarantee, Geithner got it exactly right. I just love the word stress test applied to the banking industry. I have visions of John Thain being waterboarded. Bottom line, Geithner just told the banking industry that the Treasury would eat anyone who wasn't health and help the rest to get healthy after they'd taken a good dose or two of chemotherapy. As usual, all there is is bitching from left (nationalize them) and right (let them fail).

The good news is that the markets hated this plan! This is very good news. Also, the Fed will takeover the consumer lending market. I think that Obama has decided to replace the banks, which is easy if you can print money.

"Coulda been better, too"

I'm sorta wondering what the point of today's big announcement was.

Krugman is bending over backwards to be polite. So instead of his usual in-your-face critical analysis, he buries his objections in the details.

As to the private-public purchases of questionable assets, he allows that any huge public financing will amount to ring-fencing after all.

But there WILL be huge public financing.

As to the stress test, he says that auditors of major money center banks who are found to have negative net worth might be told to come up with a different answer and that's a big concern.

But they WILL be told to come up with a different answer.

I have NO faith whatsoever that private capital can be attracted without HUGE public financing, nor that an valuation of assets that is fair to taxpayers will be performed.

Not with Geithner and his cronies in charge.

Steven Pearlstein just spoke very well to the Bailout Plan on 'Hardball'.

The problem is that the government is not even attempting to address the root of the problem....i.e. declining real estate values.

After all, these toxic assets were not always toxic, and they will not be toxic indefinitely into the future. What the government should be instead of throwing money at banks is buying up bad mortgages and shoring up real estate values. This will not only reduce the toxicity of CDO's, but will also reliquify the market for them, with the side benefit of allowing thousands of people who would otherwise be evicted to stay in their homes.

At the same time, the government should be doing everything in it's power to increase demand for housing, including expanding immigration and putting a moratorium on new real estate construction.

Once the real estate market gets back on track, all those toxic assets will no longer be quite so toxic anymore, and the financial system will right itself on its own.

I'm starting to thing that the vagueness and opacity is part of the plan. Too much clarity about anything and the Wall St. drama queens are bound to overreact massively.