Jim Jubak has written an outstanding analysis of the Geithner plan[Link]. For those interested in what the US Treasury is doing to fix the US banks, it is a good read. The plan may be the only plausible way forward. Jubak explains why Giethner has ordered stress tests on the banks....it is also the same reason why Bank of America and Citigroup stocks are falling - the stress test will shed light on which banks are actually insolvent. If we want to rescue some of our tax payers' money in those banks, we need to get out before these test shows the truth about these banks.
The DOW has been plunging since Geithner explained the plan in a somewhat sketchy manner. The DOW Futures shows that the US stock indices will plunge once the US markets opens tonight. I have this hunch that they might recover later tonight.....the Obama team did put in place 3 parts of a plan that will help the US economy - foreclosure mitigation, economic stimulus & the Geithner plan. All this was done within one month of being in office - so the administration is no slouch....think about it they have performed quite well given the circumstances. The reason why I think it will rebound tonight is the way these markets have been selling off throughout this crisis since Oct 2007 - the market will ease slowly in the onset of a wave of selling and then climax with big selloff followed by short covering and a relief rally. The global indices have fallen non-stop for 9 days and the selling has accelerated in recent days - this selling looks like it is going to climax soon - perhaps tonight.