By Bonnie Erbe, Thomas Jefferson Street blog.
Finally, President Obama is showing us that he is using his powerful intellect and, perhaps, giving us a clue as to why he continues to defend his treasury secretary against all reason. World markets clearly responded positively to his public-private partnership plan to rid banks of so-called toxic or troubled assets, otherwise known as delinquent mortgages that never should have been given out in the first place:
Initially, a new Public-Private Investment Program will provide financing for $500 billion in purchasing power to buy those troubled or toxic assets--which the government refers to more diplomatically as legacy assets--with the potential of expanding later to as much as $1 trillion, according to a fact sheet issued by the Treasury Department.
The market endorsement was in sharp contrast to how the market has responded to his other economic stimulus measures. The Dow was positively downbeat about his pork-laden stimulus plan. Mr. Obama provoked a very different reaction to this market-oriented approach, which sent the Dow and other indices worldwide skyward as soon as the announcement became public. President Obama says he pays no attention to daily market fluctuations. But he ignores the market entirely at his own political peril. And this president is very much about trying to keep all factions happy--including Wall Street.
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By Bonnie Erbe