{"id":259385,"date":"2009-03-23T07:33:00","date_gmt":"2009-03-23T07:33:00","guid":{"rendered":"http:\/\/new.moldova.org\/2009\/03\/23\/economic-outlook-geithner-steps-forward-191199-eng\/"},"modified":"2009-03-23T07:33:00","modified_gmt":"2009-03-23T07:33:00","slug":"economic-outlook-geithner-steps-forward-191199-eng","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/economic-outlook-geithner-steps-forward-191199-eng\/","title":{"rendered":"Economic Outlook: Geithner steps forward"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

U.S. Treasury Secretary Tim Geithner announced he will unveil the details of a public-private bank bailout strategy Monday.<\/p>\n

As mapped out in an opinion article in The Wall Street Journal, Geithner bills the Public-Private Investment Program as an opportunity for investors as much as a public burden, that will take a substantial share of real-estate related assets<\/q> off bank ledger sheets and, it is hoped, free lending to consumers and businesses.<\/p>\n

The program will start with a $500 billion public commitment that could double over time, Geithner said. <\/p>\n

The government is trying to get the bounce started, using enough public funding to entice private participation. If it works, that gives the taxpayer substantially more bang for the buck and shares the risk with the private sector. In theory, it also allows the government to dodge the sticky point of pricing assets viewed as nearly impossible to value, Geithner said. Instead, the government will open the door to the market and allow the marketplace to establish price.<\/p>\n

Geithner said millions of Americans<\/q> are already seeing benefits with historically low interest rates on mortgages, which pushed a 30 percent increase in refinancing and a lending program that led to almost $9 billion of new securitizations last week, more than in the last four months combined.<\/q><\/p>\n

But, for the public-private program, bank stocks are the macrocosm to watch.<\/p>\n

In Asia, investors were already placing their bets. Mizuho Financial Group in Tokyo gained 5.3 percent, while the Industrial & Commercial Bank of China rose 6.3 percent. ICIC Bank in Mumbai gained 6.5 percent.<\/p>\n

The Nikkei index in Tokyo added 269 points Monday. The Hang Seng index in Hong Kong gained 4.78 percent on a 613-point gain. The Singapore Straits Times gained 4.21 percent.<\/p>\n

Stocks in Europe also pointed north. In Paris, the CAC 40 gained 1.4 percent. In Frankfurt, the DAX 30 gained 1.89 percent. The broader DJStoxx 600 gained 1.74 percent, while the FTSE 100 index in London gained 1.76 percent.<\/p>\n

Taking a long view, no crisis like this has a simple or single cause,<\/q> Geithner wrote, noting the depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.<\/q><\/p>\n

That said, the Public-Private Investment Program isn’t regulatory change and banks are still absorbing a wave of distrust triggered by revelations of bonus checks handed out in spite of bailout efforts. On top of that, analysts say first-quarter financial reports, which will trickle in soon, will likely disappoint and act like speed bump in the recovery process.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>Economic Outlook: Geithner steps forward<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-259385","post","type-post","status-publish","format-standard","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

U.S. Treasury Secretary Tim Geithner announced he will unveil the details of a public-private bank bailout strategy Monday.<\/p>\n

As mapped out in an opinion article in The Wall Street Journal, Geithner bills the Public-Private Investment Program as an opportunity for investors as much as a public burden, that will take a substantial share of real-estate related assets<\/q> off bank ledger sheets and, it is hoped, free lending to consumers and businesses.<\/p>\n

The program will start with a $500 billion public commitment that could double over time, Geithner said. <\/p>\n

The government is trying to get the bounce started, using enough public funding to entice private participation. If it works, that gives the taxpayer substantially more bang for the buck and shares the risk with the private sector. In theory, it also allows the government to dodge the sticky point of pricing assets viewed as nearly impossible to value, Geithner said. Instead, the government will open the door to the market and allow the marketplace to establish price.<\/p>\n

Geithner said millions of Americans<\/q> are already seeing benefits with historically low interest rates on mortgages, which pushed a 30 percent increase in refinancing and a lending program that led to almost $9 billion of new securitizations last week, more than in the last four months combined.<\/q><\/p>\n

But, for the public-private program, bank stocks are the macrocosm to watch.<\/p>\n

In Asia, investors were already placing their bets. Mizuho Financial Group in Tokyo gained 5.3 percent, while the Industrial & Commercial Bank of China rose 6.3 percent. ICIC Bank in Mumbai gained 6.5 percent.<\/p>\n

The Nikkei index in Tokyo added 269 points Monday. The Hang Seng index in Hong Kong gained 4.78 percent on a 613-point gain. The Singapore Straits Times gained 4.21 percent.<\/p>\n

Stocks in Europe also pointed north. In Paris, the CAC 40 gained 1.4 percent. In Frankfurt, the DAX 30 gained 1.89 percent. The broader DJStoxx 600 gained 1.74 percent, while the FTSE 100 index in London gained 1.76 percent.<\/p>\n

Taking a long view, no crisis like this has a simple or single cause,<\/q> Geithner wrote, noting the depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.<\/q><\/p>\n

That said, the Public-Private Investment Program isn’t regulatory change and banks are still absorbing a wave of distrust triggered by revelations of bonus checks handed out in spite of bailout efforts. On top of that, analysts say first-quarter financial reports, which will trickle in soon, will likely disappoint and act like speed bump in the recovery process.<\/p>\n

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