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Home > About Us > In the News > Feb 11, 2009

In the News:
Reuters, The Wall Street Journal, AP, Dow Jones.

Portfolio manager Axel Merk is underwhelmed by Treasury Secretary Geithner’s financial stability plan; details in excerpts from his interviews with Reuters, The Wall Street Journal, Dow Jones and AP.

Reuters

“ ‘We do not see convincing evidence that the government is moving away from its Band-aid approach to helping banks,’ said Axel Merk, president and chief investment officer at Merk Investments in Palo Alto, California.

Merk took issue with the $1 trillion in consumer and business lending, saying that getting involved in specific credit allocation is best left to planned economies.

‘When governments start picking industries and companies to subsidize, inefficiencies are created, leading to higher costs, lower competitiveness and ultimately a loss of jobs,’ [Merk] said.”

The Wall Street Journal

Portfolio manager Axel Merk finds Geithner’s speech lacked a plan.

“ 'The concept of a public/private investment fund sounds intriguing, but there is no plan - the Treasury Secretary “seeks input” how to achieve this. There simply is no fair way to take bad assets off the books of financial institutions. The sooner policy makers not just recognize it, but embrace it in their strategy, the better… We did not see convincing evidence that the government is moving away from its Band-aid approach to helping banks. By now, the only viable solution left may be to nationalize the financial institutions that are deemed too big to fail; it’s then a political decision whether depositors should carry part of the cost.' –Axel Merk, Merk Investments”

AP

 “‘It was a bit underwhelming what we saw today,’ Merk said. ‘I think the market expected and deserved more.’"

Dow Jones

“‘We did not see convincing evidence that the government is moving away from its Band-Aid approach to helping banks,’ said Axel Merk, president and chief investment officer at Merk Investments in Palo Alto, Calif.”