Quick Thoughts On The Geithner Plan

A few quick thoughts:

1. Today’s 497 point rally in the Dow was more than the 479 point drop when Geithner announced the general outline a month or so ago.
2. The very positive Dow response was the first major test for the plan.  If the markets had reacted negatively this would have been declared DOA.
3. The next 24 hours will be critical for the plan.  Look to see if Asian and European markets rally tonight and tomorrow, and if there’s a second-day rally in the U.S.
4. Congress will need to approve the funds for the plan from the second tranche of TARP funds.  This makes continued support from Wall Street critical.  If markets are rallying because of the plan, Congress will have a very difficult time voting against it because of the virtually certain immediate damage that would do to stock prices.
5. The anger toward Wall Street should subside a bit if 401K and other pension plans are rising in value.
6. Did anyone else notice the extreme communications planning that went into today’s rollout?  The communications plan was perfectly executed with validators like New Jersey Governor John Corzine doing interviews and much of the economic team delivering the clearly coordinated messages.  The opposition was left flatfooted with a plan that was too complicated to dissect in detail.
7. For one of the few times since the inauguration, the president himself was not making the economic announcement; he left this one to Geithner and the rest of the team.  But the choreography is still obvious.  If there is a second-day rally, the president will be able to say good things about the economy and the plan at his nationally televised press conference tomorrow and, in the process, put even more pressure on Congress to approve it.