Geithner Follies

In his Monday evening press conference, President Barack Obama touted the expected Tuesday revelation by Treasury Secretary Timothy Geithner of a financial rescue plan. The plan announcement had been delayed to allow further work on the details and to permit the President to tout it in principle without being questioned about the reality of the details.

Geithner who was confirmed despite admissions of tax cheating and in contravention of the President's reported standards for service in his administration on the basis that only he could resolve the banking crisis, laid out the framework of a plan bereft of details in any case, a move that left investors, especially in the banking industry, racing for the exits at almost any cost. The accompanying Wall Street Journal chart for Bank of America reflects the market for that stock falling off a cliff immediately following Geithner's announcement.

Bank of America declined by 19.3%. Sellers lost $807.3 million from the pre-speech price. Citigroup declined 15% costing its sellers $177.7 million and Wells Fargo Bank declined 14.2% losing $370.6 million. All told losses to today's sellers for these three bank stocks alone exceeded $1.3 billion, an amount equal to 1.1 days of porkulus.

House and Senate conferees began considering the resolution of the differing porkulus bills passed by both houses. With Sen. Collins announcement that she could not support final passage of a conference bill exceeding $800 billion, it unclear if the current porkulus can pass this weekend or at all.