You Can't Handle the Truth
One of my favorite economists, John Mauldin, provided an interesting take on Tim Geithner's widely panned bank bailout "plan" (or lack there of) this week.
His take is that Geithner and his team are not stupid. They knew that Wall Street would be annoyed by his plan's lack of specifics, but perhaps they thought that being vague was being better than telling everyone the ugly truth about how much it will really take to fix America's financial system.
Perhaps the folks at the Treasury believe that it will take much, much more than the $350 billion remaining on the TARP tab to fix things. in the TARP program? Many popular analysts believe that it will. Nouriel Roubini has floated a number of $1.5 trillion out there and Merrill Lynch's David Rosenberg has mentioned $2 trillion.
I suspect that people would have flipped out and the markets would have fallen even further if Geithner had said that he would need that much money to fix things.