By Emily Kaiser
WASHINGTON, Feb 15 (Reuters) - Enough talking. Do something.
That sentiment is apparent in the chilly reception to U.S. Treasury Secretary Timothy Geithner's plan to repair the banks, and in the way consumers are balking at buying cars, houses or just about any other expensive goods.
It shows up in the depressed share prices of financial firms, and in the steep drop in business investment and hiring across many parts of the developed world.
Consumer, business and investor confidence remains in tatters even though governments have promised trillions of dollars to fix the financial mess. The underlying reason seems to be frustration at the slow pace of progress, and the global economy cannot recover until that attitude is reversed.
Dominique Strauss-Kahn, head of the International Monetary Fund, said that was the gist of his message to finance leaders from the Group of Seven rich nations, who gathered in Rome over the weekend.
"What you prepared is OK, in most cases, so just do it!" he said in an interview with an internal IMF publication, urging countries to move ahead with economic recovery plans before the recession gets any worse.
Figures due this week are likely to show that sentiment remains decidedly negative among Japanese manufacturers, German analysts and investors, and U.S. consumers.
Recent readings from Germany's ZEW think tank and the U.S. ABC consumer confidence survey showed tentative signs of stabilization in January, albeit at very low levels. Still, Japan's Reuters Tankan survey hit a record low last month and Tuesday's report may not indicate any improvement.
Considering all the efforts to combat recession, whether through interest rate reductions, stimulus packages or bank rescues, the still-bleak mood would suggest that people remain highly skeptical that these steps will work.
The Reuters/University of Michigan Surveys of Consumers on Friday showed that confidence dropped more than expected in February, after modest rebounds in December and January.
Perhaps even more disturbing, nearly two-thirds of those surveyed thought the downturn would last five more years. The survey was conducted at a time when reports of job cuts filled the news, and there was little hope that a nearly $800 billion stimulus package would save the economy.
The survey's organizers said the stimulus plan was "hardly mentioned at all, and when it was mentioned it was more likely to be referenced in a negative rather than a positive manner."
DOs AND DON'Ts
The stock market sell-off that greeted Geithner's bank rescue plan is another example of the confidence gap.
It wasn't so much that investors or economists disagreed with the approach of soaking up bad assets on banks' books and supporting new lending. It was that the lack of detail made it clear that this program will take many weeks to get going.
"The policy playbook is simple: don't promise more than you can deliver, don't promise big programs without explaining how they will work, and don't outline how bad the economy is unless you immediately offer a clear, credible turnaround plan," said Ethan Harris, an economist with Barclays Capital in New York.
Confidence also plays a big part in Geithner's expectation that private money will return to the banking sector and allow the government to bow out gracefully.
Foreign investors were badly burned by pouring money into U.S. banks in 2007 and 2008, and don't seem eager to do that again. The Financial Times newspaper quoted a Chinese banking official as saying there would be "no bottom-fishing of financial institutions, particularly in the U.S." because of concern about the quality of the books.
John Silvia, chief economist at Wachovia, said the private sector was understandably wary of getting caught on the wrong side of politics if they invested in banks.
"If we come in, how much say do we get, and is the federal government going to come back in six months and wipe us out?" he said, explaining the concerns among would-be investors.
For U.S. President Barack Obama, the darkening mood has left him no time to ease into the new job. Some investors have grown weary of Obama reminding Americans that things are bad and getting worse without offering enough assurance that he and his economic team are up to the task of fixing the problems.
David Kotok, chief investment officer of Cumberland Advisors in Vineland, New Jersey, said he was confident that the United States would indeed recover, but he was worried about "Washington in disarray."
"I am very concerned about the start of the new Obama Administration," he wrote in a note to clients. "I supported him and I voted for him. I want him to succeed. But I am now very insecure in the way the government is being run by the new folks." (Additional reporting by Burton Frierson in New York; Editing by Andrea Ricci)