From the frying pan and into the fire.
Watching the reaction to the passage of the stimulus and the release of the Treasury Department's latest plan was like watching the Friday the Thirteenth movies and yelling at the screen for the not so smart girl in the movie not to go into the woods alone at night. Painful and frustrating and in many ways, sad to watch.
The Dow Jones shed 4.62% by the close. Dropping 381.9 points to end the day at 7888. That is only 4.5% above the five-and-a-half year low of 7552 from Nov. 20th. The day started off at a flat line. Then at 11 a.m., Treasury Secretary Timothy Geithner held a press conference. The heat from the stove hit the oil in the pan and the fire was ignited. Some compared the scene to the movie "Trading Places". The calm before the storm and the explosive nature in which the environment erupted into chaos as the press conference was underway.
Geithner's plan? To use $1.5 Trillion (yes I said TRILLION) to thaw the credit markets and bail out banks and financial institutions. The plan calls for the use of quasi private/public fund of $500 Billion designed to buy up the toxic bank assets like bad real estate and consumer loans and remove them from bank statements and test banks solvency. It also calls for a commitment of up to $1 Trillion to reopen lending markets for consumer, student, small business, auto and commercial loans.
In the end we can't tell if this is a good idea or a bad idea as there are no real details about what or how this will be achieved. Who and how will the fund be funded? It remains to be seen as his plan was not presented, it was only outlined.
The Senate added to the volatility of the day as they announced passage of an $838 Billion Economic Stimulus package. The package passed on a vote of 61 to 37 with three Republicans in support of the package. Those Republicans are Susan Collins and Olympia Snowe both of Maine and Arlen Specter of Pennsylvania. The three Republicans joined with 56 Democrats and 2 Independents and passed this mammoth package through. One Senator did not vote today. Senator Judd Gregg, a Republican from New Hampshire.
The package now moves forward to a House-Senate conference in which the group will work to resolve the differences between the House and Senate versions. Obama still hopes to sign this bill into law by Monday, again forgoing the 5 day public review we were promised.
The Education package is still not in this bill.
President Obama was in Fort Myers, Florida involved in one of his town hall meetings at which he was introduced by Florida Governor Charlie Crist, a Republican who also backs the stimulus package. During his speech to the crowd President Obama was handed a note from press secretary Robert Gibbs informing him of the Senate vote. He announced the outcome of the vote to the crowd who cheered and applauded the victory. "That's good news," Obama said.