29 October 2009

Geithner Says Commercial Real Estate Will NOT Wreck Economy

Wall Street Journal


U.S. Treasury Secretary Timothy Geithner expressed confidence Thursday that the woes of the commercial real-estate sector would not drag the economy back down.

Geithner acknowledged that it was difficult for policymakers to tackle the problem of sliding asset values and write-downs.

However, he said, "I think the economy can handle it" when asked if commercial property could reverse a domestic recovery.

"I think you can say with confidence that the financial system is stable [and that] the economy has stabilized," he told an audience of the Economic Club of Chicago.

His remarks came after GDP data released Thursday showed that the U.S. economy grew by a better-than-expected 3.5% in the third quarter.

Geithner described the first quarter of growth in more than a year as "broad and strong," noting it did not just rely on auto-sector incentives and the broader government stimulus plan.

In front of an audience of the Midwest's business and economic elite, he said that the private sector - and exports in particular - were more central to recovery than in previous downturns.

Amid a pushback from some politicians and lawmakers to the administration's financial reform agenda, Geithner said that a system he has described as "broken" was now "on the path" to resolution.

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