It appears investors are fairly under whelmed by the new plan to bailout banks. And one of Geithner’s most outspoken critics is Fast Money friend Joe LaVorgna, chief US economist Deutsche Bank.
As we told you yesterday, investors had hoped Treasury Secretary Geithher would provide specifics about how the Treasury planned to mop up bad bank assets and revive consumer lending.
But instead investors listened to the plan and found themselves frustrated. "It's not big enough. There were few details," says LaVorgna.
What was missing?
There were few details on a proposed stress test that banks must pass before receiving any more aid. There was also no talk of doing away with mark-to-market accounting, something the Street was very much hoping to hear.
But, perhaps the thing the market disliked most of all -- was a proposal to set up a public-private investment fund, in partnership with the FDIC and the Federal Reserve. Investors agree that the move is designed to entice hedge funds to buy toxic assets – but little else is known.
In other words it’s still not clear how the government will value toxic assets or how they will get them off the balance sheet.