TIME & PAIN

This is what we’ve been waiting for???

As expected, Geithners speech was a lot of fluff. There is no easy fix for our economic issues and it’s apparent our government (about 1 year into this mess) still hasn’t found a way to value assets and heal our banking system. I suspect that’s because THERE IS NO EASY FIX. There is no master plan that will fix what has been created over the past 10 years. Only TIME & PAIN. If Geithner came out today and said that our plan consists of two steps: Time and pain, I don’t think that would’ve been well received.

There where four major points to the Geithner speech…

1. The government will commence a “stress test” for banks. Ok, well great the government is going to look at the banks balance sheets. To me this means that there is more pain ahead for the banks. We still don’t know what to do once we admit our entire banking system is severely “stressed”.

2. A public/private trust to invest in toxic assets. Geithner specifically said they are still exploring how to do this. Uh, ok, thanks….

3. All government agencies to support lending and credit flow. Ah, now this is a novel concept…Haven’t we heard this for the past year?? How, Tim? We want to know HOW????

4. Housing Program to reduce rates for struggling borrowers, reduce mortgage payments, etc. Please, we’ve been hearing this for months. Loan modifications still aren’t working and there are millions of homeowners that are underwater. Again, there is no clear plan.

Glad I held my PUTS….