WASHINGTON — That bomb of a bailout intro could make things tougher later on for the administration.
President Barack Obama and his top financial officials will be picking up the pieces and filling in the blanks in the sprawling bailout overhaul package in the coming days. And lawmakers and market professionals suggested Wednesday that the bad early reviews from Wall Street and Capitol Hill could complicate winning public and market confidence along the way.
Obama had said that his new Treasury secretary, Timothy Geithner, would deliver “clear and specific” steps to revive the nation’s financial system.
“He’s going to be terrific,” Obama told reporters.
But the performance was a flop.
Bert Ely, a longtime banking analyst, said the administration should have sought more feedback from knowledgeable investment professionals before unfurling the plan.
“I think everybody is really scratching their heads and asking, ‘What happened?’ And now they’ve really put themselves behind the 8 ball. The expectations are even higher, and they’ve got to start fleshing this out,” he said.
Rep. Scott Garrett, R-N.J., a member of the House Financial Services Committee, said the rocky start didn’t bode well for future announcements.
“The next time we actually start seeing the details, let’s say tomorrow or two weeks from now, people will say, ‘Yeah, well, maybe that’s it, or maybe there’ll be another one.’ ”
Lack of concrete details, unduly high expectations, a shaky performance by Geithner and overall economic angst led to the thumbs down on Wall Street and Capitol Hill, lawmakers, traders, economists and analysts suggested.
At first glance, the plan described by Geithner sounded ambitious and forceful, a wide-ranging rescue that could send $2 trillion coursing through the nation’s weakened financial system.
It included a fresh round of capital injections into banks, an expansion of a Federal Reserve lending program, a public-private effort to relieve banks of bad loans and the promise of $50 billion for homeowners facing foreclosure.
But on closer inspection, many of the proposals were modifications or continuations of the rescue effort launched last year by Geithner’s predecessor, Henry Paulson.
“The feeling yesterday was deja vu,” said Quincy Krosby, chief investment strategist for the Hartford Financial Services Group.
