Wall Street is Schizophrenic over Tim Geithner

target1Last November—when news came that Tim Geithner was going to be tapped as treasury secretary, the stock market soared. It not only soared, it had one of its best days in history—rising by more than 500 points to regain the 8,000 mark once again.

Then came February 10th when the Treasury Secretary announced what amounted to “a plan for a plan.” Wall Street hates plans for plans—that’s because it abhors uncertainty— and sunk the market to the tune of almost 400 points, and an even greater percentage on the S&P (a 5% haircut).  Many barbs were tossed in Geithner’s direction along with calls for his head.

Then this week comes the actual plan to get toxic assets off the books of banks. Geithner is a man with absolutely no charisma. But as Peter Drucker taught us, charisma is not leadership, it is “how to make friends and influence people.”  The President was the one selling the plan to the American electorate, as Geithner presented the plan to reporters behind closed doors. Whomever sold it. Wall Street loved it 

Since then, Geithner has had a much easier time testifying beforre congress. The Dow is up a stunning 21 percent in thirteen trading sessions, which  technically constitutes a bull market. The Treasury Secretary found it much easier to talk to politicians when the market is soaring.  

 On Monday the stock market got back what it lost on that infamous February day and more, rising just under 500 points (nearly 7%) Monday—the fifth largest point gain ever. And we are about to close out our third week in a row with solid gains.

One of the real sparks to the market is the toxic asset bank program. We finally got the details, and anything that even looks like an actual plan was going to bring life to the market. The government is still financing the greatest part of the purchasing of toxic assets, but this time some private money should enter the picture. As long as the markets continue to rise—both the stock market and the credit market—taxpayers and private institutions, will make money. That didn’t stop some high-powered economists like Paul Krugman to declare the plan a complete failure before anyone had a chance to see if the plan had a chance! 

As for Tim Geithner, he is still in the “what have you done for me lately”  business, and  more than any other Obama cabinet member, likely to stay in the crosshairs for the duration. Everything he says or does is likely to be examined under a Wall Street microscope, and if Wall Street doesn’t like what they hear, they will shoot more poison arrows at him until they get their way.

As for me,  I’m in the minority. I think Geithner is going to  help lead us out of this mess, and will be heralded as one of our most effective Treasury Secretaries in history.  Not that there won’t be bumps along the way. We all need to fasten our seat belts and hold on for a wild ride.


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