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Hoping the antidote will kick in

29 Mar 2009 - Preaching the News for Sunday

The reading from the Book of Jeremiah this Sunday promises a “new covenant” between the Lord and the house of Israel. This week U.S. Treasury Secretary Timothy Geithner announced a new public-private initiative designed to buy up so-called “toxic assets” that have poisoned the financial system. Wall Street appeared to be reacting favorably. Under the new “Public-Private Investment Program,” taxpayer funds will be used to seed partnerships with private investors that will buy up toxic assets backed by mortgages and other loans. The goal is to buy up at least $500 billion of existing assets and loans, such as subprime mortgages that are now in danger of default. The Treasury said the program could potentially expand to $1 trillion over time, but the hope is that it would not only help cleanse the balance sheets of many of the nation’s largest banks but help get credit flowing again. Even as he acknowledged that the government was taking on risk with this new program, Geithner defended it as the best alternative, saying that doing nothing would result in a deeper credit crunch and a “longer, deeper recession.” Judging from the reaction of industry analysts and the market, Geithner had succeeded. Monday the Dow Jones Industrials, led by financial stocks, rallied nearly 500 points, or more than 6 percent. Scott Talbott, the top lobbyist for the Financial Services Roundtable, said that while some information is missing, there’s probably enough for buyers to figure out whether it’s worth risking their money. “It’s not perfect,” Talbott said, “But it is a workable framework.” Sources: Articles by David Ellis and Jennifer Liberto for CNNMoney.com and Massimo Calabresi for Time.com

financial services roundtable wall street scott talbott us treasury public-private investment program toxic assets timothy geithner
Irish eye financial rescue with reluctance

21 Nov 2010 - Preaching the News for Sunday

God makes us “fit to share in the inheritance of the holy ones,” and in Christ, “all things hold together,” this Sunday’s reading from the Letter to the Colossians informs us. In Europe, it is the European Central Bank that is being commissioned to hold things together and make Ireland financially fit. Investors urged the European Central Bank to act quickly--and Ireland to accept help--to avoid plunging the Eurozone into crisis and panicking world markets. European officials responded midweek by laying the groundwork for a bailout of Ireland that could reach $136 billion, but Ireland’s Finance Minister Brian Lenihan insisted that his country wasn’t ready to seek help despite a huge budget deficit and sky-high interest rates on its government debt. European Union President Herman Van Rompuy on Tuesday cast the Irish crisis as a decisive moment for Europe and its common currency: “We all have to work together in order to survive with the Eurozone, because if we don’t survive with the Eurozone, we will not survive with the European Union.” U.S. Treasury Secretary Timothy Geithner said Europe learned painful lessons from its slow response to the crisis that convulsed Greece earlier this year. “The lessons of that experience . . . is you want to do this quickly and decisively and not wait,” Geithner said, though he declined to offer specific views about Ireland’s predicament. Source: Articles by Marcus Walker, Patrick McGroarty, and Charles Forelle for the Wall Street Journal,Rick Newman for US News & World Report, James Kanter and Steven Erlanger for the New York Times,and Adrian Croft and Nigel Davies for Reuters

timothy geithner ireland financial crisis european union european central bank eurozone brian lenihan herman van rompuy
Congress, can you spare a dime?

22 May 2011 - Preaching the News for Sunday

Reflecting on this Sunday’s reading from the Acts of the Apostles, PrepareTheWord.com scripture commentator Alice Camille quips that “the diaconate has its roots in people bickering about church resources.” While Republicans and Democrats continue to bicker about budget reform, the U.S. Treasury Department reached the nation’s borrowing limit Monday and warned of potential default if the financial impasse is not resolved soon. Treasury Secretary Timothy F. Geithner has suspended a program that helps state and local governments manage their finances and will begin tapping federal retiree programs to help fund operations, adding urgency to efforts in Washington to fashion a compromise over the debt. If Congress does not vote by August 2 to raise the debt limit, Geithner said the government is likely to default on some of its obligations, which he said would cause enormous economic harm and the suspension of government services, including the disbursal of Social Security funds. Many congressional Republicans, however, have been skeptical that breaching the deadline would be as catastrophic as Geithner suggests. What’s more, Republican leaders are insisting that Congress cut spending by as much as the Obama administration wants to raise the debt limit, without any new taxes. Obama is proposing spending cuts and tax increases to rein in the debt. Treasury secretaries have drawn from special programs to avoid default six times since 1985. But today the government needs far more money to cover its obligations than in the past, making the special measures less effective than they used to be. The government needs about $125 billion more a month than it takes in each month. Source: Articles by Zachary A. Goldfarb for the Washington Post and Tim Fernholz for National Journal

barack obama congress timothy geithner republicans debt ceiling treasury department