THE PRAGMATIC CAPITALIST » » GEITHNER PLAN VERSION 2.0

GEITHNER PLAN VERSION 2.0

22 March 2009 by TPC 2 Comments

Tim Geithner will announce his latest “plan” to fix the banking crisis tomorrow morning at 8:45AM EST. The NY Times is out with details here. I’ll wait to comment on the plan until formal details have been released, but the early details make this “new” plan sound awfully similar to the original Paulson Plan – a plan which has already failed for all intents and purposes.

Futures are up 2% as Asia celebrates the new plan. There hasn’t been a single government announcement that didn’t sell the news. Unless we see something very different than the leaked details – don’t be shocked if stocks swan dive tomorrow morning after Geithner releases the Paulson, err, Geithner Plan version 2.0.

Rating: 0.0/10 (0 votes cast)

2 Comments »

Theo said:

Good job on your indicator and the 2 day sell-off coming into fruition. Yes this is TARP revisited, but injecting cash, buying of troubles assets off the books, and the feds making sure the yield curve is nice and steep is too much momentum for continuing the bullish trend begin a few weeks ago. Stocks need a wall to climb over right? Well I see all the ingredients are in place for multiweek bounce. Who knows where we'll be a year from now, but at the moment, I am playing this long. Also look at this chart of XLF, last week was the first time in 6 months that the 50sma has been breached. http://stockcharts.com/h-sc/ui?s=xlf&p=D&...
How the markets digest this news in the next few days will be telling.

Rating: 0.0/5 (0 votes cast)

# 23 March 2009 at 8:58 AM

TPC (author) said:

We'll see. This looks like nothing more than a recycled version of the Paulson plan. The market certainly likes it today. At least the short sellers don't want anything to do with it. I have a feeling we'll relapse here in the coming weeks when we realize that the same problems with TARP 1.0 exist in TARP 2.0.

I still wouldn't buy into this rally, but I wish you luck.