MADISON, Wis. — As questions emerge on the details of the Treasury Department's economic stability plan, the stock markets may continue to roil.
The proposal "was short on specifics that investors awaited and did not include an anticipated 'bad bank aggregator,'" said Livia Asher, managing director, portfolio manager of mid cap value strategies at MEMBERS Capital Advisors Inc., the registered investment adviser affiliate of CUNA Mutual Group. The subsidiary has more than $12 billion in assets under management.
"Despite weeks of planning, and the market's anticipation, the administration is still finalizing details; but until there is greater clarity, markets are unlikely to find a firm footing that is required to move substantially higher," Asher wrote in MEMBERS Capital's Feb. 10 MarketLine.
Asher acknowledged that the Treasury's plan to stabilize financial institutions and markets remains a work in process with details on how the government and private partnership will be established, asset prices determined or bank balance sheets "stress-tested."
"The good news, though, is that [President Barack Obama's] administration is clearly putting its best minds to work on crafting multiple solutions to a multi-faceted set of problems," Asher wrote. "But [Feb. 10's] stock market reaction acknowledges that there is no silver bullet."
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