Geithner Says US Can Handle Economic Crisis; Investor Confidence and Wells Fargo Profits Are Up
by Anne Szustek
U.S. Treasury Secretary Tim Geithner says the economy is showing “some signs of stabilization”; institutional investors’ confidence is at a nine-month high and Wells Fargo announced a 53 percent increase in profits during Q1 2009.
U.S. Treasury Secretary Tim Geithner has already noticed “some signs of stabilization of declines in output and trade,” he said in a speech in front of the Economic Club in Washington, D.C. this morning. While acknowledging that the global economy is seeing “the most severe crisis in generations,” he gave a vote of confidence to policy adopted during the G20 summit of developed nations earlier this month. “We know we have a strong framework of policies to confront the crisis,” he continued, noting that the United States and U.S. companies played heavily into the current recession, thus carry some of the onus to fix it.
If financial services firm State Street’s survey is any indication, institutional investors feel up to the task of economic recovery. State Street’s global investor confidence index, which polls groups such as pensions and trust funds—namely, institutions that invest and play a key role in economic recovery—went up 9.4 points to 79.6, the highest it’s been since July. According to the index, all three regions surveyed showed greater confidence, with North American investors leading the way with a 10-point jump this past month to 70.2. “The data reveal that institutional investors have participated with some enthusiasm in the recent market recovery,” Ken Froot, Harvard professor and index co-developer, told Reuters.
Mortgages are getting some love in the form of Wells Fargo’s 53 percent year-on-year growth in first-quarter profits. Customers looking to refinance are taking advantage of historically low mortgage rates; the bank has written more than $100 billion in mortgages during the first three months of this year. A near-doubling of revenue to $21 billion helped the bank sock away enough money to take care of at least a year’s worth of losses from nonperforming loans.