All equities tumbled as he talked, eerily reminiscent of the phenomenon during the implosion last year that when President Bush talked, stocks tanked. Only the safe havens of gold and Treasury bonds were bought in yesterday's sharp sell-off.
On the substance, Mr. Geithner promised to "stress test" large financial institutions. Pardon me, but as head of the NY Fed, did he and his boss Ben Bernanke not have the responsibility to evaluate the soundness of the money center banks, in conjunction with the FDIC?
Financial stocks tumbled yesterday. Probably they had gotten overpriced on hopes. This down-move may be telling, however, because of the reluctance (still!) of the Obama Administration to wipe out common stockholders of financial companies that would be bankrupt were it not for Government cash and extraordinary guarantees. This could have been viewed positively by the traders, but it wasn't. The feeling here is the conventional one in the blogosphere: Citigroup and Bank of America are zombies.
The mainstream media and blogosphere are both full of commentary about the Obama-Geithner "plan", so there's no need here to spend more time on it.
To paraphrase Irving Berlin:
There's no action like inaction, like no action I know . . .
Let's just say that Timothy Geithner did not steal the show.
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