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Geithner Disappoints With Lack Of Details

Tuesday, 10 Feb 2009 | 12:18 PM ET

"Buy on the rumor, sell on the news" may be a cliche, but it worked beautifully here.

The Dow dropped 250-points as Geithner's speech came out. Besides sell on the news, the Street was clearly disappointed that it lacked the details everyone wanted to hear, specifically about the "public/private investment fund" wherein they are providing guarantees for private investors to buy assets.

It will provide up to $1 trillion in funding capacity, but all we heard was that they were "exploring a range of different structures." Nothing on how the markets would price the assets, the most elusive question of all.

So we don't really have the details, and don't know how much investors will be willing to participate.

Same problem with the TALF: it is expanding to $1 trillion from $200 billion, but no more details.

Alcoa didn't help. At the same time as the Geithner speech came out, S&P lowered Alcoa's corporate debt rating--concern credit metrics will continue to deteriorate--and dropped 8 percent.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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