Put away any calls, like those from me, from the lynch mob asking for the head of Tim Geithner. His job is secure and it will be indefinitely. The comeback of Geithner is very remarkable if you think about it. Here he was being pummeled for just about everything. He had been written off by the markets, by the politicos, the pundits, and most of the public at large. With his credibility at its all time low, he delivered what can only be seen as a home run on the most crucial issue of the day, the toxic assets of the banks. I was about to write a piece last night with an investment tip that shorted the markets in anticipation of his speech. That's how little confidence I had in Geithner. I couldn't have been more wrong.
The markets had absolutely no reason to trust anything he said, and yet, his plan was met with overwhelming approval. Markets were generally up about 7% just today. No more can anyone claim that markets are down in response to policies from the administration. In fact, in one fell swoop that has all been erased and then some.
The details of this plan will be debated, and there is certainly plenty to quibble with if that is your want. (I have my problems)There are a few things that must be kept in mind though. First, there is no magic bullet so no plan will be perfect. Second, no one can know for sure if it will work, and so all criticism will have limited effectiveness politically. As such, unless someone with a great deal of respect by the market comes along and trashes the plan in a credible way sending markets straight down, Geithner's credibility is restored for the time being.
Furthermore, the effectiveness of the plan will take months if not longer to judge. As such, Geithner has not only restored his credibility but the restoration will be there for the indefinite future. Now comes the difficult part and that is putting his plan to work and actually making this toxic asset plan work.
Please check out my new books, "Prosecutors Gone Wild: The Inside Story of the Trial of Chuck Panici, John Gliottoni, and Louise Marshall" and also, "The Definitive Dossier of PTSD in Whistleblowers"