LIVE BLOG of Geithner’s Bailout Plan Announcement

The live blog of the Treasury secretary’s press conference introducing the new version of the Troubled Asset Relief Program. Please refresh regularly.

11:00 AM ET: Waiting on Geithner’s arrival. Reporters have taken their seats. Lectern has the moniker “Financial Stability and Recovery.”

11:05: Two minute warning given.

11:07: Geithner appears with Sen. Chris Dodd.

11:09: Dodd introduces the plan: Plan will present a “long-term economic framework for economic recovery.” “Predecessor … have not been able to break the negative cycle.” “Today we will hear a new set of ideas.” “We look forward to Sec. Geithner’s announcement to … make a fresh new start for homeowners and consumers and for accountability …”

11:12: Geithner starts. He talks quietly, speaking from a teleprompter. Banks are critical. Without credit companies cannot grow to their potential. Borrowing costs have risen sharply for states, companies, and consumers. He is painting a dire portrait of the economy, citing “trade among nations is seizing up.”

11:15: We must get credit flowing again to prevent the recession from being “deeper and longer.” Financial Stability Plan will free up credit, clean up banks, and improve the economy. Blames a “huge boom in credit.” Investors and banks took risks they did not understand. There were systematic failures in the checks and balances. He is essentially blaming everyone, governments, banks, rating agencies — everyone. I hope he gives his own mea culpa.

11:17: Sounds like he is getting to the details now. Principles:

* Forceful policy and action;
* Action needs to be sustained until their is recovery;
* Access to public support is a privilege, not a right;
* Government support has to come with strong enforcement; and
* Government investment should support not supplant private capital.

Says this is a new financial stability plan. All financial agencies will be involved to get the economy back on track. “We are one government serving the American people.”

New site: FinancialStability.gov. Site does not appear to be up right now.

11:21: All regulators will pool together to develop this stress test for banks. Government funds will require greater lending by the banks than previous to the federal investment.

Geithner says this public-private fund for acquiring assets. Maximum buying capacity will be $1 trillion. He does not appear to know how this is really going to work. This is the key part of the plan, and he really doesn’t seem to have a formula down. There is no apparent limitation on the downside of asset writedowns other than a $1 trillion price tag.

11:25: Going to pump more money into SBA lending. Dow trading down 2.36%; S&P off 2.49%.

Dodd and Frank involved with Obama to figure out a long-term solution to avoid such a financial crisis in the future. G20 meeting in April will be a deadline for such a solution.

11:30: He is dialing down expectations now, saying that the program may have to “adapt and change.” “Our economy depends” on the plan’s success. He walks off to applause. Whether he deserves those applause or not is another matter entirely.