Tales from the Trail

When Treasury Secretary Timothy Geithner made his long-awaited speech on Tuesday to unveil the administration’s bank rescue plan, the stock market tanked. Traders said the nearly five percent drop was caused by a lack of specifics in Geithner’s announcement that the government would spend up to $2 trillion to mop up bad bank assets and revive lending.

The main newspapers had banner headlines about the biggest one-day drop for Dow industrials since Dec. 1.

So what will happen today when Geithner heads to Capitol Hill to testify before the Senate Budget Committee? The market will also be watching as top Wall Street CEOs appear in a hearing with the House Financial Services committe to defend their use of $176 billion in taxpayer funds.

President Barack Obama continues his push for the $800 stimulus bill outside of Washington, traveling today to nearby Springfield, Virginia to talk about how jobs will be created with the new plan.

Meanwhile, his emissaries push forward in their efforts to help lawmakers on Capitol Hill hammer out a compromise agreement between the House and Senate versions of the stimulus bill. Obama wants to have the final version on his desk by Feb. 16.

A trillion dollars is a million million dollars or 12 zeros after the one.

And that’s how much apparently every program costs to save the U.S. economy these days.

Treasury Secretary Timothy Geithner outlined what he called “a new financial stability plan” to help restart the flow of credit, strengthen banks, and  “provide critical aid for homeowners and for small businesses.”

His proposal included a program in which the FDIC, the Federal Reserve, and the private sector would establish a fund, using government financing, to deal with bad assets weighing on financial firms.

The inauguration celebrations are over and the clean up begins as Barack Obama prepares for his first full day of work. 

It’s a big job. The recession shows no signs of easing and Wall Street ushered in the new presidency with a record Inauguration Day slide. Obama’s choice for treasury secretary, Timothy Geithner, will likely be asked at his Senate nomination hearing about the state of the economy and the new administration’s plans to shore up banks sagging under the burden of bad investment decisions.

Obama’s first day in the Oval Office is expected to be busy. He begins with the National Prayer Service at the National Cathedral and plans an open house for the public at the White House in the afternoon. He will also meet with economic advisers to discuss his proposed economic stimulus plan and proposals for dealing with bad bank assets.