The Plebian

Pretty Economic Pictures for the Illiterate Masses

Timmy Geithner’s Financial Stability Plan

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As promised yesterday by Treasury Secretary Tim Geithner, the Financial Stability Plan website is up and running. The plan has numerous facets and provide explicit intentions “to protect taxpayers and ensure that every dollar is directed toward lending and economic revitalization, the Financial Stability Plan will institute a new era of accountability, transparency and conditions on the financial institutions receiving funds.”  This is very exciting for those of us that have been promoting the internet as a means to enforce gov’t accountability and transparency (note initiative 4 for more).  While the plan is pretty much a broad outline with details to come, it will be interesting to see how it continues to develop.

The reaction from Wall Street during Geithner’s announcement was  less than enthusiastic.  The Dow dropped +3% and media immediately began speculating as to why? As commented by Ritholtz:

“Both the NYT and the WSJ seemed to focus on the lack of details as the cause for the selloff. But that conclusion is belied by the “sell the news” reaction immediately as Geithner began speaking. No one could have digested anything in that milli-second.

I have a decidely different take. Wall street was hoping for another multi-billion, no strings attached, taxpayer funded giveaway. Instead, they got something much tougher than they expected.

Hence, the selloff/tantrum.

They wanted their candy and didn’t get it…”

Contrary to the worldview of the grools (greedy tools) on Wall Street, I believe main street will be much more open to idea that their tax dollars can be tracked and firms can be held accountable for poor performance. 

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