The Devil’s in the Lack of Details

By Nitya

Feb 11, 2009 8:10am

At his Monday night press conference, President Obama promised that his treasury secretary, Tim Geithner, would offer, ‘very clear and specific plans’ on how the administration intends to stabilize the financial system.

It’s not at all clear that Mr. Geithner achieved that goal.

And that’s if you talk to Obama allies.

“We need more details from Treasury on how exactly it plans to remove bad assets while protecting the taxpayer,” Sen. John Kerry, D-Mass., told the New York Times.  “We have zombie banks that are weighed down because their liabilities exceed their assets. Without a precise mechanism for addressing toxic assets, it will be difficult to increase lending.”

Asked Sen. Chris Dodd, D-Conn., of Geithner at the hearing yesterday, "What is the framework? What is the purpose here? And what do you hope to attain?"

And House Financial Services Committee Chairman Rep. Barney Frank, D -Mass., issued a statement that said, “While the Secretary’s speech moves in the right direction on all fronts, some specifics remain to be detailed. …the Secretary said the administration would present details of their foreclosure reduction plan in a few weeks, which is too much time. In the meantime and while we wait for President Obama’s plan, I call on institutions that hold or service mortgages to delay and stop any foreclosure proceedings. I have said in the past that I have been skeptical of the question of a moratorium in general because it wasn’t clear where that would lead us, but in this situation where the Obama Administration will have a specific plan shortly, a moratorium is clearly called for.”

- jpt

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