Investors Skeptical of Bailout

Treasury Secretary Geithner's plan fails one important test: The Dow Jones plummeted nearly 400 points, the worst selloff since President Obama took over, and Asian and European markets also tumbled. What specifically were markets reacting to? The main complaint is that the plan is too thin on details. The Washington Post writes that investors may have been troubled by the plan's overtones: “Geithner seemed to be following the Hank Paulson playbook … Many of the specific policies Geithner offered were tweaks, adjustments or continuations of Paulson's strategy.” Writing for the Financial Times, Martin Wolf offers a dire assessment: “The banking programme seems to be yet another child of the failed interventions of the past one and a half years: optimistic and indecisive. If this 'progeny of the troubled asset relief programme' fails, Mr Obama’s credibility will be ruined. Now is the time for action that seems close to certain to resolve the problem; this, however, does not seem to be it.”