Sunday, August 8, 2010

Geithner At NYU:Comeback Confidence

Treasury Secretary Timothy Geithner expressed confidence in the nation's future at NYU's Stern School of Business recently.Mr.Geithner feels that America is coming back;the economy is healing.Typically,recoveries following a crisis are more moderate.You always face more headwinds.Businesses are starting to hire,but the U.S. needs to bring the fiscal deficit down.Economic growth needs confidence that the U.S. will cut debt.This debt reduction will be a difficult process.
We're seeing more stability in house prices,but we still have a lot to work through.The system we have today is not tenable for the future.Fannie Mae and Freddie Mac built up huge portfolios of mortgage-backed securities without the capital to back up the risk.
The government still has substantial capacity to respond to a future crisis,Mr.Geithner said,wearing a black suit,blue shirt and blue tie.He did not believe the U.S. is headed for Japanese-style deflation.Most countries wait too long to respond to crises.The President made it clear we were not gonna do that.We decided to act with force.The major firms are in a much stronger position because we forced them to disclose and raise more capital.Because of that,the world turned and the basic beginnings of recovery began.Mr.Geithner is very confident we're gonna avoid the Japanese fate.

No comments: