Obama Foreshadows The Roubini $Trillion

Obama spoke at a news conference last night in Washington

Feb. 10 (Bloomberg) — President Barack Obama signaled he would be open to seeking an expansion of the $700 billion financial-rescue program should the plan fail to restore stability to the U.S. banking system.

“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we’ve seen how successful we are at restoring a sense of confidence in the marketplace,” Obama said in a news conference last night in Washington.

Treasury Secretary Timothy Geithner today will announce an overhaul of the bank-bailout fund. The plan, which so far won’t seek additional government money, is designed to support about $1.5 trillion in new lending and handling of distressed assets. It has three main components: more capital for banks, financing for as much as $1 trillion of consumer and business loans, and public financing for investors willing to buy the distressed assets, people familiar with the matter said.

The president’s remarks indicate he acknowledges the assessment of many economists that the $350 billion remaining in the Treasury’s Troubled Asset Relief Program is insufficient to revive credit markets. The International Monetary Fund forecasts financial companies will need to write down over $1 trillion more of their U.S. mortgage debt.

A second article from the WSJ