In the past two weeks, the Bush Administration announced it would not seek the second $350 billion of the $700 billion “bailout” package approved by Congress. Also, Treasury Secretary Hank Paulson said there would be no new initiatives to deal with the credit crisis. So much for that promise to do “whatever necessary” to stem the crisis.
Sensing increased uncertainty amid this lack of leadership, the stock markets began falling further, setting new lows. Simply, there was no good news to give hope.
Suddenly on Friday, it was announced that Tim Geithner would be the new Treasury Secretary and the market responded with a nearly 500 jump in the Dow. As head of the New York Fed, he is intimately familiar with the ways of Wall Street, and as the former Under Secretary of Treasury for International Affairs, he understands the globalized nature of this recession. It was an excellent choice! It was also a little ray of sunshine that the markets desperately need.