Geithner Says Global Crisis Unprecedented
Treasury Secretary Timothy Geithner said Wednesday the United States bears a substantial share of responsibility for a global economic crisis that could cost the world up to $4 trillion in lost output this year alone.
While the crisis started in the U.S., Geithner said its damage has spread widely with serious challenges facing much of the globe.
"Never before in modern times has so much of the world been simultaneously hit by a confluence of economic and financial turmoil such as we are now living through," Geithner said in remarks to the Economic Club of Washington.
Geithner cited the International Monetary Fund's new economic forecast Wednesday that projected global economic output will fall 1.3 percent this year, the first decline in more than six decades. Compared with a normal global growth rate of 4 percent, the lost output could amount to as much as $3 trillion to $4 trillion, he said.
Still, there are tentative signs the severity of the downturn was beginning to moderate. Some measures of consumer spending and industrial output had started to stabilize and financial conditions had improved "modestly," Geithner said.
It also was encouraging that the U.S. and other countries had responded with unprecedented speed and force to deal with the crisis, but going forward it will be critical for countries not to relent in their efforts to boost economic growth and stabilize their financial systems, he said.
"The actions now in place and in the pipeline offer the strongest basis for confidence that we will begin to lay the foundation for global recovery," Geithner said.
The plan put forward by the Group of 20 major industrial countries and developing nations in London on April 2 offered a solid basis for support, and finance ministers meeting this weekend would be seeking to build on those commitments, he said.
Following his speech, Geithner avoided directly answering a question about the chances the government will be able to recoup the $182 billion in support it has provided to troubled insurance giant American International Group Inc.
Geithner called AIG an "extraordinary challenge," but said that the government-installed managers were working hard to "help improve the odds that the taxpayer is repaid."
© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. While the crisis started in the U.S., Geithner said its damage has spread widely with serious challenges facing much of the globe.
"Never before in modern times has so much of the world been simultaneously hit by a confluence of economic and financial turmoil such as we are now living through," Geithner said in remarks to the Economic Club of Washington.
Geithner cited the International Monetary Fund's new economic forecast Wednesday that projected global economic output will fall 1.3 percent this year, the first decline in more than six decades. Compared with a normal global growth rate of 4 percent, the lost output could amount to as much as $3 trillion to $4 trillion, he said.
Still, there are tentative signs the severity of the downturn was beginning to moderate. Some measures of consumer spending and industrial output had started to stabilize and financial conditions had improved "modestly," Geithner said.
It also was encouraging that the U.S. and other countries had responded with unprecedented speed and force to deal with the crisis, but going forward it will be critical for countries not to relent in their efforts to boost economic growth and stabilize their financial systems, he said.
"The actions now in place and in the pipeline offer the strongest basis for confidence that we will begin to lay the foundation for global recovery," Geithner said.
The plan put forward by the Group of 20 major industrial countries and developing nations in London on April 2 offered a solid basis for support, and finance ministers meeting this weekend would be seeking to build on those commitments, he said.
Following his speech, Geithner avoided directly answering a question about the chances the government will be able to recoup the $182 billion in support it has provided to troubled insurance giant American International Group Inc.
Geithner called AIG an "extraordinary challenge," but said that the government-installed managers were working hard to "help improve the odds that the taxpayer is repaid."
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he keeps protecting the rich at the expense of the middle class!
U.S. Bears Some Responsibility, But Problems Are Worldwide, Treasury Secretary Says"
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He should know, he's part of the problem.
Should have allowed the involved financial institutions to crater last year.
Yes it would have been absolute chaos. A run on the banks. A run on the dollar. Panic across the globe. A drastic drop in the stock markets with trading curbs kicking in.
Then after about a month inject cash into the system for the surviving banks.
And start the bankruptsy process on the institutions that were involved.
And start the criminal investigations.
Instead of rewarding the folks that caused the problem.
And making a housing problem in four states a national problem that now touches everyone.
All the while fleecing the taxpayer.
Yes the stock market would have tanked - where it went anyway, only quicker. Yes it would have been scary. But it would have lasted about 2 months.
And we'd be rebuilding by now.
Why the bank stress tests are bunk
The Obama team has put banks under the microscope and plans to release the results. If the findings are bad, expect more market turmoil. If they're rosy, who'll believe them?
[Related content: stocks, financial services, financial crisis, Citigroup, Michael Brush]
By Michael Brush
MSN Money
President Barack Obama rode to Washington promising change. But the latest change his team is bringing to banking regulation has many experts on edge.
They fear Obama's strategy to stress-test troubled banks -- and release results, on May 4 -- could turn into a political show or rattle shaky markets. Or both.
Federal regulators routinely test whether banks have enough capital strength to survive extremely difficult economic storms -- a theoretical exercise that's known as a stress test.
But two things are disturbingly different about the tests now being overseen by Obama's embattled Treasury secretary, Tim Geithner:
First, politicians are involved, a no-no to banking regulators.
Second, after some initial reluctance, the administration will release results. In government, openness is usually a good thing. But it's rare in banking regulation because even speculative results can create turmoil in the market.
To avoid turmoil, the Obama administration may end up whitewashing the results to say the banks are mostly OK. Or it might keep the released results so vague as to be meaningless.
Either of these tactics -- or just the suspicion something squishy had gone on -- would make investors and taxpayers more nervous.
Test of nerves
That's because they know banks still have problems despite the artificially positive earnings numbers released recently by several banks. So we citizens would be left wondering what the government was hiding.
All of this might explain why plans on what to release have changed so often.
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Just my note, you could pry a truth out of Geithner and the DUMBAMA AMERICA SUCKS CAMPAIGN.....they have no relationship with a truth!!!!
So, Geithner WHERE ARE THE RESULTS OF THE BANKING STRESS TESTS?
Are you too chicken to produce them because it will show you and Bernanke manufactured a nice economic crisis HOAX for the DUMBAMA AMERICA SUCKS CAMPAIGN in an election year?
Some? Eight years of looking the other way on subprime and selling CDOs to the reset of the world?....some indeed.
Yea kinda like the Obama bunch is doing right now to make New AIG millionaires ,then act like they never knew and are mad about it. Geitner said yesterday he has about blew the first 800 billion plus the 400 billion Bush left them for political paybacks.Seen any of those new bridges pop up in your town yet? I did't think so.
or
We the American taxpayer.
What's it going to be?
NO MORE F*CKIN' BAILOUTS!!!!!!
Posted by TheMasses02 at 9:29 AM : Apr 22, 2009
Is that like using the "war on terrah" excuse to invade Iraq, and plunder our national treasury to benefit Haliburton?
HAIL OBAMA!!!!
Posted by walt1944
Time to take your meds. The dirty, filthy rich are dropping left and right. The rich have been pounded by the economic implosion more than the poor. The outsourcing of jobs, the predatory financing, the realestate and stock market bubbles have all finally caught up with us. The vultures living off the carcasses of the poor have run out of corpses and are feeding on themselves. Decades of buying today and promising to pay tomorrow are finaly coming to an end, and Hail, Obama! isn't going to save us, no matter how many explanation marks you make after it.