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March 23, 2009

Treasury Secretary: My Plan for Bad Bank Assets

Posted: 07:22 AM ET

By Tim Geithner, U.S. Secretary of the Treasury

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.

No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.

The depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.

Over the past six weeks we have put in place a series of financial initiatives, alongside the Recovery and Reinvestment Program, to help lay the financial foundation for economic recovery. We launched a broad program to stabilize the housing market by encouraging lower mortgage rates and making it easier for millions to refinance and avoid foreclosure. We established a new capital program to provide banks with a safeguard against a deeper recession. By providing confidence that banks will have a sufficient level of capital even if the outlook is worse than expected, more credit will be available to the economy at lower interest rates today - making it less likely that the more negative economy they fear will take place.

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Filed under: Economy • Sec. Tim Geithner


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Bernadette Loesch   March 23rd, 2009 7:37 am ET

Dear Larry King, I have a request for your consideration. Former Governor Elliot Spitzer was a guest on Fareed Zakaria GPS which aired yesterday. The interview was excellent. Spitzer gave background on his pursuit of AIG, Lehman, et al when he was in office. Every word was a total gem and very informative. Please invite Elliot Spitzer to speak on Larry King Live. Your viewers will then be able to get a wider prespective of the economic and monetary meltdown from one of the greatest governors in New York history. We as viewers deserve nothing less!


ILeeBot as in Donald   March 23rd, 2009 8:13 am ET

well larry I,M not to smart sum times you read but dont lision you no I dont aways read to good I no you mean well but it may not be good to do what you say criticize or to judge no I dont do the gay union,S netter but we sud wach what we do I gas god well do the judge ing for aus I do like linsday I heate to see her sol lost I was in love well you no how it com and you no were it go Larry King I,M verry sary about what I said you must look over me I,M only good wen it com to truble but if it com to me I dont no what to do with it see you Larry King PS have a good one


ILeeBot as in Donald   March 23rd, 2009 8:20 am ET

bad bank they just give you enight to get your self in truble moony not good unless you or making moony and wen you do get it you cant pay it all back at one,S I need a contrack not a lone or a grant like 4,000,000,000 I,M real good at it wen it com to figre you no let theam pay me they got more I here the store on tv but it dont happing to me or mom


Terry, TX   March 23rd, 2009 9:32 am ET

Mr. Geithner.... are you insane?
Geithner, Obama, The Democratic Congress (minus a handful), the Democratic Senate and the 3 Republicans who voted yes on the Job Pork Stimulus...without even reading it....were responsible for all bonuses being distributed. Republican Snowe's provision was pulled out and Chris Dodds's (the liar) Bill was put it.....on the Obama administration authorization. Your credibility is shot....no more money...no more illegal unconstitutional bills to tax anyone 90%.

We have been Blagoviched with an "F". No more money...No more Pork...amend the bills to remove illegal aliens from receiving Pork money....leave the economy alone...it will fix itself ....No more spending until we are healthy enough..stop all wish and welfare lists.

So government tighten your belt... American Taxpayers do your thing....vote these morons out of here. ...


Terry, TX   March 23rd, 2009 9:39 am ET

Might I add....Mr. Geithner just step down...I understand Obama has called up his 15 million email foot soldiers to go door to door to preach your messages....not a good idea....I don't believe ACORN will be welcomed.

It didn’t matter you were a tax evader…you were the “ooooonly one in the woooooorld” who could do the job.

Why aren’t the treasury positions filled….might I answer that....
What morons would sign up on a sinking ship or have their reputation linked to this administration and their socialist economic policies.
Most good managers and CEO’s have personnel that follow them to a new job. Reporters might want to ask his former fellow workers…. or people who he supervised. There has got to be some good stories there ….nobody followed him to the treasury. They would have to be anonymous sources willing to talk with their voices changed and their body shape hidden… because Obama administration henchmen and slobbering media…go after citizens… I don’t think anybody would talk to CNN on camera without that protection.


Krishna Gollapudi   March 23rd, 2009 9:57 am ET

We can put the blame all we want on AIG, Timothy and the president. The fact of the matter is no one wants to talk about American people spending and greed. Perhaps addressing these would mitigate the risk of total collapse on the long run. Let's not forget the US Congress for allowing this to happen over the last 25 years. It saddens me to see the very same legislators still holding key committee positions today who were to protect American people all these 25 years. Do we have an accountability office for legislatures similar to GAO that only seem to apply for Executive branch of the government?


Michael C. McHugh   March 23rd, 2009 10:59 am ET

I'm for Obama in spite of what the administration i doing (or not doing) for Wall Street. I think he's at least going to attempt to do something about the environment, health care and education, and will be a far better president than Bush in these areas.

I also think it's better for reformers when big business interests are very weak and discredited, and have to depend on the government to survive. As long as they are in that condition, they won't be strong enough to block Obama's other reforms–and the Republicans will also continue to look foolish by having bet everything of free market capiatlism–and lost.

All in all, the best chance for reform since the 1960s is right now. If we can't make changes now, we never will.


Johnny Honeycutt   March 23rd, 2009 9:47 pm ET

Tom was one of president Obama choice for his cabinet if he should be ousted he was the presidents choice to lead and we should honor the presidents wish if he needs to go lets let our president put him out. Obama has done more for us since he has been in office than our former administration did in their whole term in office.


james   March 23rd, 2009 9:51 pm ET

Dear larry,

I wish everyone would just give this administration a chance. Everyone makes mistakes. It really makes me mad that it has only been less than a 100 days and people think they know everything.


Patricia   March 23rd, 2009 9:53 pm ET

Everyone has a complaint but no solution. As a soldier our leaders always asked us what we thought of the plan to complete the task but before you answer if you disagree offer another solution if you do not have one keep your mouth shut. So now I say this to all you so called "experts" and "wannabees" If you have another way to go speak up; stop complaining, waiting, and being critical: help him,
HELP US!!!!!!


Chuck Young   March 23rd, 2009 9:53 pm ET

I just want this to work, it's too late for me, i was layed off after 8 yrs with one company, I had to cash in ira, spent my savings, got hired and was layed off 6 months later with a new company, now with no work in site, I file bankruptcy, At 52 I am starting over, When banks start loaning again, I am sure I will be hired again. (note I am a construction superviser renovating hotels).


jaitori   March 23rd, 2009 9:54 pm ET

I support Mr. Geithner and I think the media perpetuates the negativity coming from those people that can only COMPLAIN and have no plan other than to let these companies fail. I guess they have so much negativity in the brains that they have no space for REASON AND PATIENCE.


David   March 23rd, 2009 9:57 pm ET

as a former mortgage banker, my question is, have the federal housing authorty even been considered as a solution to the foreclosure crisis, and if not it should be. I can show you how.


JIM CARROLL INTERNET FREE PRESS   March 23rd, 2009 9:57 pm ET

IF IGNORANCE WERE GOLD, SENATOR GREGG WOULD HAVE MADE A GREAT SECRETARY OF TREASURY
If this jungle bunny had read Article 1, Section 8, of the Constitution, he would
know that the Federal Government can not go broke. He took an oath to uphold the
Constitution, but he has never read it. As ignorant as he is I'm damn glad he did not
take the job as Commerence Secretary. It is apparent that you don't have to know anything
to be a Senator or a Reporter. I wish these damn idots would go to the internetfreepress.com,
and get educated. Obama will make all my dreams come true that I have been working on for 40
years. He will put the Plilosophy of Mixturism on the map. It's great to have someone in
the Whitehouse with a brain.


ed,vancouver canada   March 24th, 2009 1:34 am ET

PORK? do not worry the people of power don't do pork


Joe Solomon   March 24th, 2009 3:46 am ET

Dear Larry:

The economy as influenced by the Stock market will have moved up to a 20% increase which has been the indicator of the end of a bear market througout history. Historically the market has inproved about six months before the beginning of the end of any recession.

The 60 days of trying to fix an ecconomy that has been dammaged over a decade has begun to have some effect. We must back up and accept progress inorder to restore confidence and succed at ending this recession.

Welcome to the new era of bravery in the white house signifying change!!!


Richard Cronin   March 24th, 2009 6:07 am ET

The US has dug the hole that it is in through GREED over the past eight years. For example, 1% of Americans used the earn 8% of the total wages bill in the US. Recent figures show that 1% of the population now earns 22% of the total wages bill of the US. Hence, it was only a matter of time that you were going to end up in the financial position that you now find yourselves in.

Now, after 40 days in the job, Obama is critisied for not having solved the problem that took so long to materialise. When you consider that the US is the largest capitalist system in the world by a large margin, it is going to take a long time to resolve the issues that you are now confrnted with. Why don't you give the guy a go?

it may be worth your while to speak to and listen to the Australian Prime Minister, kevin Rudd, who is currently in the US. He has well thought out LONG TERM plans to resolve our situation which is no where near the problems that you have. THINK LONG TERM and not in 30 day terms.


Joe   March 24th, 2009 8:30 pm ET

This entire toxic asset plan reminds me of an old country western song "She got the gold mine, I got the shaft". The wall street fat cats gamble and we're the ones that lose.


Wayne   March 24th, 2009 9:57 pm ET

Too much negativity on the part of CNN reporting. The economic problem goes to the heart of the world's economic system, and will take time to solve–a lot more than 60 days.

Obama needs help, help from the media, and help from the American people, and help of Congress. He has a problem not of his making, and yet some people want him to walk on water.

CNN needs to assess it policies of negativity. Ted Turner must roll his eye balls ten times a day. CNN needs some decent economic reporting and some educational reporting, not necessarily for the public, but at least for its reporting staff.

Time to replace Ed Henry on the Whitehouse beat. CNN needs people who can do in depth economic reporting without seeking sensational headlines.


Al   March 24th, 2009 10:05 pm ET

The President is setting a new standard for the leaders of our lands. When was the last time the government talked to us and not about us. The last time our government talked at us was when they wanted our vote. I like that the President is talking to us and allowing us to talk back to him. Notice to all government leaders, we will not go back to the old ways, I promise you. I hope I see my local government at our next Home owners meeting. Or they may want to start looking for a new job.


mm   March 25th, 2009 1:03 am ET

Why hasn't the tax evader Geithner paid his interest and late penalties yet? This is certainly not the change I asked for! We never had this problem with tax evaders when Bush was voted in! How can you even trust a man who is in charge of our taxes and refused to pay his own! No excuse under the sun could convince me he's not a crook like Obama is.


mm   March 25th, 2009 1:07 am ET

Obama had no business running for president with little to no experience running anything more than his household. This is what we get for voting a newbee in. Noone even read the 1 trillion dollar stimulus package which guaranteed bonuses to AIG employees before it was passed. This administration get's a big fat "F"! I still want these companies to fall and then we can pick up the pieces and move on, but this spending spree is going to kill us all~!


Ed Churchill   May 20th, 2009 7:17 pm ET

Here in America the problems and social issues facing our nation are monumental both in financial cost and social responsibility for our current and future generations. These problems our government has created and let grow; mortgage foreclosures breaking the financial stability of our nation, national debt, health care, social security funding, education standards and funding, freefall in home market values, all stem from two continuing problems that just are not getting addressed and they are lack of living wage jobs, and the high cost of transportation fuel!! All of our current world and national problems are somehow tied to crude oil. NG as an automotive fuel has been available for more than five decades, yet it is not promoted or offered to the general public as a mass produced alternative to gasoline or diesel powered cars, and light trucks. Currently there are over 130,000 NG vehicles being used in this country, less than one twentieth of one percent of registered vehicles nation wide, hardly enough to make a difference in oil fuel consumption but enough to prove factually that NG is an abundant and readily available alternative to foreign imported fuel. We have an alternative fuel that is not only easy to convert to but quite inexpensive and will promote tremendous economic growth for several decades to come. NG can be supplied to consumers through our current network of pipeline supply and allow consumers to refuel there cars and light trucks at there own homes to whomever has NG supply lines. This addresses a current delivery problem until automated refueling terminals can be installed. You see NG will not have to be made available at our accustomed gas stations, but rather anywhere there is a large NG supply line an ART (Automated refueling terminal) can be erected, much like satellite ATM machines to allow people to swipe a card, enter your PIN select debit, credit, or bill my account and begin refueling your NG vehicle. To begin our countries immediate recovery from this recession simply mandate 50% or more of all passenger vehicles and light trucks produced or imported into the U.S. within the next ten years will be NG powered. This will begin the turn around for our automotive industry which will become something of a patriotic duty to most folks to buy one of these new NG vehicles. This must be a part of any big three bailout if we are to come out of this travesty as a strong united country!


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