"Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions and are skeptical that their government has – to this point – used taxpayers' money in ways that will benefit them. This has to change."
-- Treasury Secretary Tim Geithner in a speech introducing the Financial Stability Plan. Geithner said that the government will "require banking institutions to go through a carefully designed comprehensive stress test, to use the medical term. We want their balance sheets cleaner, and stronger."
He added, "We will have to try things we've never tried before. We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted." But, echoing President Obama's urgent pleas to Congress to pass the stimulus package, Geithner stressed the need to act: "There is more risk and greater cost in gradualism than in aggressive action."
The market wasn't convinced. The Dow dropped 382 points, or 4.6%, closing at its lowest level since Nov. 20. Many experts had believed that Nov. 20 was the low of the bear market. Maybe not, after all. -- Jessica Shambora
"There are some people in the Republican Party who resent the idea of helping others. But the market is broken right now, and unless we intervene, these people and the economy won't be helped."
-- FDIC chairwoman Sheila Bair in today's New York Times. The voice in Washington for millions of homeowners facing foreclosure, Bair insists that economic recovery depends on their rescue, financed by billions in taxpayer dollars. As the MOREJessica Shambora, Writer-Reporter - Dec 11, 2008 5:18 PM ET
Warren Buffett emailed this note to the directors of his company, Berkshire Hathaway (BRK.B), Tuesday after he heard that the U.S. Treasury sold $32 billion in 4-week bills at a yield of 0%:
"This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales MOREPatricia Sellers - Dec 9, 2008 7:28 PM ET
Barack Obama has been close to naming Larry Summers as the next Secretary of the Treasury, but the appointment is being held up by opposition to the brilliant but controversial economist. Fortune managing editor Andy Serwer said in his column Thursday that Summers, who headed Treasury under President Bill Clinton, is the lead candidate for the post in the new administration. Treasury officials have been led to believe that Summers MOREPatricia Sellers - Nov 7, 2008 1:29 PM ET
"The regulatory system in the U.S. is hopelessly outdated, outmoded. It's not just a matter of too little regulation. It's a matter of the wrong regulation. The big parts of the mortgage origination industry weren't even regulated to any great extent. It was state regulation and very inadequate. The power to look across the financial system and deal with systemic risk, no one had that."
-- U.S. Treasury Secretary Hank Paulson MOREJessica Shambora, Writer-Reporter - Oct 22, 2008 6:54 PM ET
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