Kabuki face via colodio.

Geithner presser upcoming on C-Span shortly, set to begin at 11 am ET. 

Duncan called it a fiasco this morning, after looking at what’s been leaked about the proposals. 

After reading NYTimes and WaPo reporting, I have to say it seems a whole lot like deliberate obfuscation designed more for public confusion than clarity.  Which always makes me nervous when public funds are on the line.

In any case, I’ll be liveblogging once the presser gets going.  Hold onto your kabuki masks.

Stephen Gandel of Time, who recently wrote "Why Your Bank Is Broke," is still speaking on C-Span as we wait for the presser to get started.  Will liveblog soon as it begins.

Live video feed from the Cash Room at the Treasury Department.  Press filing in, Geithner to speak shortly at the presser.  Geithner will also testify live today to the Senate Banking Committee, live on C-Span III and radio  this afternoon at 2:30 pm ET.  Will be a few minutes before the presser goes live.

Starting now.

They’ve gotten Sen. Chris Dodd to introduce Geithner this morning.  Dodd looks tired this morning.

DODD:   Good morning.  21 days ago today, as we articulated the challenges we Americans face, President Obama asked all of us to participate in a new area of shared responsibility and cooperation.  Today, as the United States Senate votes on a bi-partisan plan to stimulate our economy, create jobs and invest in our middle class families, we are going to hear Treasury Secretary Tim Geithner lay out the Administration’s long-term, comprehensive framework to lead the nation back to economic recovery.

This framework will require swift and concerted action by policymakers throughout our government, using existing authorities.  Elements it..in it may require…require new legislation.  Certainly, I look forward, along with my colleagues, to work with the Secretary and his staff in that effort, to flesh out the details in the coming days and weeks.

Secretary Geithner understands the enormity of the challenges we all face as a nation.  Regretfully and for too long, his predecessors failed fully to realize the fiancial health and security of consumers is inextricably linked to the success of the American economy.  That without applying the same urgent focus to helping homeowners that we applied to supporting our financial institutions efforts to restart lending, we are not able to break the negative cycle of rising foreclosures and declining credit that is damaging our economy so much.

With nearly 10,000 families facing foreclosure and 19,000 Americans losing their jobs every single day, we understand just how much the health of our economy rests on the financial well-being of American workers and small businesses.  So while it is important to know how we came to this, it is even more important…far more important…to understand how we move forward to recovery and prosperity. 

Today we will hear a new set of ideas of how the troubled assets weighing on our financial system should be valued, transferred, and structured, so that credit can start flowing again.  In coming days, we will hear about a way forward for American families buckling under the weight of unaffordable mortgages, including more than 25,000 in my home state of CT.   We’ll hear how focus must be simply…uh…not simply on our financial institutions, rather, but also on those who rely upon them:  homeowners seeking options to keep their homes, small businesses who rely on payroll accounts and banks, and entrepreneurs who need access to capital to generate jobs of the future.

Today as the Senate casts an historic vote that addresses the jobs and income losses facing American families by investing in our future, we look forward to Secretary Geithner’s announcement of a comprehensive plan to get credit flowing again.  To hear the saving jobs and unfreezing credit are designed to offer the opportunity for a fresh new start for American homeowners, consumers and businesses.  A fresh new start for transparency and accountability for how taxpayer dollars are going to be used.  And a fresh new start for public and private sectors, for all Americans, in fact, as we work together in partnership to stabilize our nations economy.  To continue this process of exchange between co-equal branches of government that all Americans, including my colleagues, want thsi process to work.

And with that I’m very pleased to announce the Secretary of the Treasury, Timothy Geithner.

(CHS:  Sorry for a bit of a delay on the typing — had to pause for a moment to deal with something.  Catching up now.)

GEITHNER:  Thank you Sen. Dodd.  And thanks to all of you for coming here today.

Pres. Obama said in his inaugural address that our economic strength is derived from the do-ers, the makers of things, the innovators who create and expand enterprises, the workers who provide life to companies.  This is what drives economic growth.  The financial system — your banks — are central to this process. 

Banks and the credit markets transform the earnings and savings of American workers into the loans that finance a first home, a new car or a college education.  And this system provides the capital and the credit necessary to build a company around a new idea.  Without credit, economies cannot grow at their potential.  And right now, critical parts of our financial system are damaged.

The credit markets that are essential for small businesses and consumers are not working.  Borrowing costs have risen sharply for state and local governments, for students trying to pay for college, and for businesses large and small.  Many banks are reducing lending and across the country they are tightening the terms of loans.  Last Friday, we learned that the economy had lost 3 million jobs last year and an additional 600,000 jobs just last month.  As demand falls and credit tightens, businesses around the world are cutting back the investments that are essential to future growth. 

Trade among nations is contracting sharply as finance dries up.  Home prices are still falling, as foreclosures rise.  And even credit-worthy borrowers are finding it harder to finance the purchase of a new home or to refinance an existing mortgage.  Instead of catalyzing recovery, the financial system is working against recovery.  At the same time, the recession is putting greater pressure on banks.

This is a dangerous dynamic and we need to arrest it.

It’s essential that every American understand that the battle for economic recovery must be fought on two fronts:  we have to jump start job creation and private investment, and we must get credit flowing again to businesses and to families.  Without a powerful economic recovery act, too many Americans will lose their jobs and too many businesses will fail.  And unless we restore the flow of credit, the recession will be deeper and longer, causing even more damage to families and businesses across the country.

Now today, as Congress moves to pass the economic recovery plan that will help to create jobs and lay a foundation for a stronger economic future, we are outlining a new financial stablity plan.  Our plan will help restart the flow of credit, will help clean-up and strengthen our banks, and it will provide critical aid for homeowners and for small businesses.  And as we do each of these things, we will impose new higher standards for transparency and accountability.

I’m going to outline the key elements of this plan today. But before I do that, I want to say a bit about how we got here.

The causes of this crisis are many and complex.  They accumulated over a long period of time, and they will take time to resolve.  Governments and central banks around the world pursued policies that, with the benefit of hindsight, caused a huge global boom in credit and pushed housing prices and financial markets to levels that defied gravity.  Investors and banks took risks they did not understand.  Individuals, businesses and governments borrowed beyond their means.  The rewards that went to financial executives departed from any realistic appreciation of risk. 

There were systematic failures in the checks and balances in our system:  by boards of directors, by credit-rating agencies, and by government regulators.  Our financial system operated with large gaps in meaningful oversight and without sufficient constraints to limit risk.  Even institutions that were overseen by our complicated and overlapping system of multiple regulators put themselves in a position of extreme vulnerability.  And these failures helped lay the foundation for the worst econoic crisis in generations.

And when the crisis began, governments were slow to act.  When action came, it was late and inadequate.  Policy was behind the curve, always chasing an escalating crisis.  And as the crisis intensified and more dramatic government action was required, the emergency actions that were meant to reassure and to provide confidence, too often added to public anxiety and to investor uncertainty.  The dramatic failure or near failure of some of the world’s largest financial institutions caused investors to pull back from taking risks.

Last fall, as the crisis intensified, Congress acted quickly and courageously to give your government the emergency authority to help contain the damage.  Your government used that authority to pull the financial system back from the edge of catastrophic failure. 

(CHS:  TIVO failed.  Am going ot have to replay this online to catch exact wording — will blog what I can below for now and fix later on today to get accurate transcript.  UPDATE:  Found remarks as prepared for delivery on the Treasury website – will cross-check this against video once it goes online to get an accurate transcript, but what follows is what Geithner had prepared as remarks until I can double check the wording.)

The actions your government took were absolutely essential, but they were inadequate.

The force of government support was not comprehensive or quick enough to withstand the deepening pressure brought on by the weakening economy. The spectacle of huge amounts of taxpayer assistance being provided to the same institutions that help caused the crisis, with limited transparency and oversight, added to public distrust. This distrust turned to anger as Boards of Directors at some institutions continued to award rich compensation packages and lavish perks to their senior executives.

Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions, and are skeptical that their government has – to this point — used taxpayers’ money in ways that will benefit them. This has to change.

To get credit flowing again, to restore confidence in our markets, and restore the faith of the American people, we are fundamentally reshaping the government’s program to repair the financial system.

Our work will be guided by the lessons of the last few months and the lessons of financial crisis throughout history. The basic principles that will shape our strategy are the following:

We believe that the policy response has to be comprehensive, and forceful. There is more risk and greater cost in gradualism than in aggressive action.

We believe that action has to be sustained until recovery is firmly established. In the United States in the 30s, Japan in the 90s, and in other cases around the world, previous crises lasted longer and caused greater damage because governments applied the brakes too early. We cannot make that mistake.

We believe that access to public support is a privilege, not a right. When our government provides support to banks, it is not for the benefit of banks, it is for the businesses and families who depend on banks… and for the benefit of the country. Government support must come with strong conditions to protect the tax payer and with transparency that allows the American people to see the impact of those investments.

We believe our policies must be designed to mobilize and leverage private capital, not to supplant or discourage private capital. When government investment is necessary, it should be replaced with private capital as soon as possible.

We believe that the United States has to send a clear and consistent signal that we will act to prevent the catastrophic failure of financial institutions that would damage the broader economy.

Guided by these principles, we will replace the current program with a new Financial Stability Plan to stabilize and repair the financial system, and support the flow of credit necessary for recovery.

This new Financial Stability Plan will take a comprehensive approach. The

Department of the Treasury, the Federal Reserve, the FDIC, and all the financial agencies in our country will bring the full force of the United States Government to bear to strengthen our financial system so that we get the economy back on track.

We have different authorities, instruments and responsibilities, but we are one government serving the American people, and I will do everything in my power to ensure that we act as one.

Our work begins with a new framework of oversight and governance of all aspects of our Financial Stability Plan.

The American people will be able to see where their tax dollars are going and the return on their government’s investment, they will be able to see whether the conditions placed on banks and institutions are being met and enforced, they will be able to see whether boards of directors are being responsible with taxpayer dollars and how they’re compensating their executives, and they will be able to see how these actions are impacting the overall flow of lending and the cost of borrowing.

These new requirements, which will be available on a new website FinancialStability.gov, will give the American people the transparency they deserve.

These steps build on what we’ve done already. We’ve acted to ensure the integrity of the process that provides access to government support, so that it is independent of influence from lobbyists and politics. We’ve committed to provide the American people with information on how their money is spent and under what conditions by posting contracts on the Internet. And, importantly, we have outlined strong conditions on executive compensation.

Under this framework, we are establishing three new programs to clean up and strengthen the nation’s banks, bring in private capital to restart lending, and to go around the banking system directly to the markets that consumers and businesses depend on.

Let me describe each of these steps:

First, we’re going to require banking institutions to go through a carefully designed comprehensive stress test, to use the medical term. We want their balance sheets cleaner, and stronger. And we are going to help this process by providing a new program of capital support for those institutions which need it.

To do this, we are going to bring together the government agencies with authority over our nation’s major banks and initiate a more consistent, realistic, and forward looking assessment about the risk on balance sheets, and we’re going to introduce new measures to improve disclosure.

Those institutions that need additional capital will be able to access a new funding mechanism that uses funds from the Treasury as a bridge to private capital. The capital will come with conditions to help ensure that every dollar of assistance is used to generate a level of lending greater than what would have been possible in the absence of government support. And this assistance will come with terms that should encourage the institutions to replace public assistance with private capital as soon as that is possible.

The Treasury’s investments in these institutions will be placed in a new Financial Stability Trust.

Second, alongside this new Financial Stability Trust, together with the Fed, the FDIC, and the private sector, we will establish a Public-Private Investment Fund. This program will provide government capital and government financing to help leverage private capital to help get private markets working again. This fund will be targeted to the legacy loans and assets that are now burdening many financial institutions.

By providing the financing the private markets cannot now provide, this will help start a market for the real estate related assets that are at the center of this crisis. Our objective is to use private capital and private asset managers to help provide a market mechanism for valuing the assets.

We are exploring a range of different structures for this program, and will seek input from market participants and the public as we design it. We believe this program should ultimately provide up to one trillion in financing capacity, but we plan to start it on a scale of $500 billion, and expand it based on what works.

Third, working jointly with the Federal Reserve, we are prepared to commit up to a trillion dollars to support a Consumer and Business Lending Initiative. This initiative will kickstart the secondary lending markets, to bring down borrowing costs, and to help get credit flowing again.

In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them. Because this vital source of lending has frozen up, no financial recovery plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses – large and small.

This lending program will be built on the Federal Reserve’s Term Asset Backed Securities Loan Facility, announced last November, with capital from the Treasury and financing from the Federal Reserve.

We have agreed to expand this program to target the markets for small business lending, student loans, consumer and auto finance, and commercial mortgages.

And because small businesses are so important to our economy, we’re going to take additional steps to make it easier for them to get credit from community banks and large banks. By increasing the federally guaranteed portion of SBA loans, and giving more power to the SBA to expedite loan approvals, we believe we can turn around the dramatic decline in SBA lending we have seen in recent months.

Finally, we will launch a comprehensive housing program. Millions of Americans have lost their homes, and millions more live with the risk that they will be unable to meet their payments or refinance their mortgages.

Many of these families borrowed beyond their means. But many others fell victim to terrible lending practices that left them exposed, overextended, and with no way to refinance. On top of that, homeowners around the country are seeing the value of their homes fall because of forces they did not create and cannot control. This crisis in housing has had devastating consequences, and our government should have moved more forcefully to limit the damage.

As house prices fall, demand for housing will increase, and conditions will ultimately find a new balance. But now, we risk an intensifying spiral in which lenders foreclose, pushing house prices lower and reducing the value of household savings, and making it harder for all families to refinance.

The President has asked his economic team to come together with a comprehensive plan to address the housing crisis. We will announce the details of this plan in the next few weeks.

Our focus will be on using the full resources of the government to help bring down mortgage payments and to reduce mortgage interest rates. We will do this with a substantial commitment of resources already authorized by the Congress under the Emergency Economic Stabilization Act.

Let me add that as we go forward, President Obama is committed to moving quickly to reform our entire system of financial regulation so that we never again face a crisis of this severity.

We are consulting closely with Chairman Chris Dodd in the Senate, Chairman Barney Frank in the House, and their colleagues on both sides of the aisle on the broad outline of a comprehensive program of reforms. The President’s Working Group on Financial Markets is developing detailed recommendations.

And we will begin working closely with the world’s leading economies on a set of broader reforms to the international financial system in preparation for the G-20 Summit in London on April 2^nd.

The success of our financial stability plan is going to require an unprecedented level of cooperation, here in the United States and around the world. Federal Reserve Chairman Ben Bernanke, FDIC Chair Sheila Bair, John Dugan, the Comptroller of the Currency, and John Reich the head of the Office of Thrift Supervision, are here today. I want to thank them for helping to shape this plan, and their commitment to making it work.

This program will require a substantial and sustained commitment of public resources. Congress has already authorized substantial resources for this effort, and we will use those resources as carefully and effectively as possible. We will consult closely with Congress as we move forward, and work together to make sure we have the resources and the authority to make this program work.

Later this week, I will be traveling to meet with the G7 finance ministers and central bank governors in Italy. There, I’ll start the process of working with our international partners to ensure that we’re working together to strengthen recovery and to help stabilize and repair the global financial system.

And we will work closely with the leadership of the IMF and World Bank so that they can deploy resources quickly to help those countries around the world that are most at risk from this crisis.

Many of the programs I’ve just discussed involve large numbers. But it is important to recognize that these programs involve loans, guarantees, and investments with terms and conditions that protect taxpayers and help compensate the government for risk. Because of these terms and conditions, the risk to taxpayers will be less than the headline.

Our obligation is to design the programs so that we are achieving the largest benefit in terms of supporting recovery at least cost to the taxpayer. And we take that obligation extremely seriously.

But I want to be candid: this strategy will cost money, involve risk, and take time. As costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families, for businesses and for our nation.

We will have to adapt our program as conditions change. We will have to try things we’ve never tried before. We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted.

We will be guided by the principles of transparency and accountability, dedicated to the goals of restoring credit to families and businesses, and committed to moving our nation towards an economic recovery that is as swift and widespread as possible.

This is a challenge more complex than any our financial system has ever faced, requiring new programs and persistent attention to solve. But the President, the Treasury and the entire Administration are committed to see it through because we know how directly the future of our economy depends on it.

Thank you.

UPDATE:  Treasury fact sheet (PDF) up as well on the plan.