Last week we saw a strong rally for the stock market.
There are a number of factors for this bump, but think that the biggest factor was President Elect Obama announcing a very impressive economic team.
Tim Geithner looks to be a respected and well thought of pick to be the Treasury Secretary. The pick also avoids a messy confirmation that would have taken place had Larry Summers been the choice. Summers considered to be one of the great economic minds in the world will be a part of the Obama Economic team as head of the National Economic Council.
What was most encouraging to me was that Obama's other appointments seemed to be applauded by people on both sides of the political spectrum and attacked by those on both ideological wings. Peter Orszag as Director of the Office of Management and Budget after running the Congressional Budget Office. While a lower level appointee than some it is nice to see someone with impeccable qualifications get an important job like this.
Former Federal Reserve Chair, the brilliant Paul Volcker will Chair the Economic Recovery Advisory Board. Volcker is a Hall of Famer when it comes to his track record and knowledge. He became a bit maligned during the Greenspan time at the Fed, but was one of the few people out there warning of the mess we are now in,,, before it happened.
The economic team is loaded with talent and experience.
Now they need to deliver stability to the economy.
Can't think of anyone else that should be on the team. It's an impressive gathering of intellect and well respected names in the fields they work.
Before getting too excited, I want to hear Geithner speak.
Why do I want to hear him speak you may ask?
The next Treasury Secretary needs to be more than a brilliant economist. He needs to be a sales person and a teacher as well.
This is something we have been sorely lacking during the Bush years. None of his Treasury Secretaries were particularly good salesmen or teachers of the economy during what turned out to be extraordinarily difficult times.
Paul O'Neill and John Snow were flops, and Hank Paulson has taken a beating for his handling of the bailout. 17people thinks we need to see how the TARP act works before burying Paulson as a disaster.
What we have all learned with terms like 'derivatives' and 'leverage' is that the economy is more complicated than we even imagined. Geithner and the new economic team is going to have to BOTH implement policy AND sell it to the public in a way that makes sense.
The public is not going to accept things getting forced on them as much as they have in the past.
It was nice to see that the markets last week responded to the decisions of our next President. He and his transition team deserve some kudos because the 'announcement stimulus' was perfectly timed leading into Black Friday and the biggest shopping weekend of the year.
17people fully expects that we will see many more dives in the markets in the weeks and months ahead. Yet, for the first time in a long time I have faith in the Economic Team leading our country.
There has never been more global economic pressure on an Administration.
One week of stimulus is nice but we could see an even worse economic landscape in 50days time and reputations will not be enough. Obama and his team will need to deliver.