Conflicting Signals on Bank Bailout
Day 32
Feb. 20, 2009
"I don't welcome that at all, but I could see how it's possible it may happen. I'm concerned that we may end up having to do that, at least for a short time."
—Chris Dodd, Senate Banking Chair, in an interview with Bloomberg TV on the prospect of nationalizing some banks
"That's been our belief for quite some time, and we continue to have that."
— Robert Gibbs, White House press secretary, dismissing speculation that the Administration may seek to nationalize Citigroup and Bank of America as their shares continue to fall
Stocks for Bank of America and Citigroup tumble as much as 36% on concerns that they may be nationalized. Dodd's interview may be partly responsible for the investor scare, even though the White House tries to regain order by sending out Gibbs to tell reporters that a "privately held" banking system is the "correct way to go." House Financial Services chairman Barney Frank chimes in, saying bank nationalization is "to be avoided." Dodd backtracks his remarks a few days later, saying his comments "should have been better thought-out at the time," and the story slowly disappears from the media's radar.
Meanwhile, Obama strikes a serious tone with the nation's mayors, hosting them at the White House to tell them he won't tolerate abuse of stimulus funds. And Clinton, still on her inaugural trip abroad, preps for her stop in China by telling reporters she's not looking to pick a fight there over human rights, saying neither side is likely to give ground.