Geithner not supporting Obama....(leaks from annonymous sources hah!)

http://www.nytimes.com/2010/01/22/business/economy/22policy.html?ref=business

In adopting the tougher line, Mr. Obama set aside a more limited approach to regulation that had been championed since last year by his economic team, led by Treasury Secretary Timothy F. Geithner.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012104935.html?hpid=topnews

Say good-bye to Tim Geithner. Also when the industry agrees with the regulator you have to wonder....

Industry officials, however, said they were startled and disheartened that Geithner was overruled, in part because they supported the more moderate approach Geithner proposed last year.

"His influence may have slipped," said a senior industry official who spoke on the condition of anonymity to preserve his relationship with the administration. "But you could also argue that it wasn't Geithner who lost power. It's just that the president needed Volcker politically" to look tough on big banks.

http://www.businessinsider.com/look-whos-smiling-now-2010-1

Great visual. It's clear Larry Summers and Geithner are advocates of crony capitalistm.

Good riddance to both of them and the sooner the better. It was just Obama "triangulating" a la Clinton. Now maybe Obama can move further away from the Clinton economistas ........
Which is not to say that Reagan didn't start this avalanche of crap that has turned us into a banana republic ......

"Good riddance to both of them and the sooner the better. It was just Obama "triangulating" a la Clinton. Now maybe Obama can move further away from the Clinton economistas ........
Which is not to say that Reagan didn't start this avalanche of crap that has turned us into a banana republic ...."

I could not agree with you more...

I can't wait for someone to drop kick the weasel into a plum job, then maybe we can get proper regulations in place.

Getting access to FDIC deposits and the Fed window is a privilidge. In exchange for that the banks have to agree to restrictions on their activitities. Just as important is the need to act in a fiduciary capacity when dealing with clients. We didn't have a crisis every six months during when we had Glass Stegal.

The banks today are showing a preference for Geithner now. It's like asking the crooks who their favorite cop is. Why does anyone listen? That kind of thinking allowed banks to choose their regulator and created the AIG mess.

Maly, yes.
Drop kick the weasel already, drop kick the weasel .......

"Volcker Rule Simple in Principle, Complex in Practice":

"The irony of this announcement is that these aren't the businesses that created the crisis. According to media reports, this is among the reservations that the Treasury Secretary has. It wasn't proprietary trades, hedge funds, or private equity investments that took down any of the firms that failed. AIG (AIG) sold credit default swaps as a customer business. The securitized products that hurt the banks were excess inventory from the %u201Coriginate to distribute%u201D model, another customer business. JPMorgan (JPM) and Bank of America (BAC) are now going to be penalized for acquiring institutions the government begged them to acquire. "

"Jamie Dimon warned last week he believed most banks would be overcapitalized by mid 2010 due to regulatory fears. In short, banks will remain conservative in lending, so as to not fall short of new capital requirements. The approach the President is taking only proves Dimon is likely correct; that doesn't help the recovery. "

http://www.minyanville.com/articles/orourke-aig-jpmorgan-bank of america-us steel-citigroup-fannie-freddie-wells fargo/index/a/26473/from/yahoo

Now if we can only close Guantanamo and increase the income tax to close the Federal deficit, I will be a happy independent voter.

Re Sunday's post: Isn't the AIG situation a simplification? What happens if AIG fails? Goldman and several other banks don't get paid back their $65 billion in CDSs that their prop desks bought to hedge (not really) their assuming the risk for commercial bank CDOs. No purchase of those CDSs by Goldman and AIG's liabilities are much less.

malthus, I agree with you that the author is over simplifying things (while trying saying it's complicated :) ), especially in the case of AIG. However, I do agree with the general idea of the article.

> It's clear Larry Summers and Geithner are advocates of crony capitalistm.

And women in the kitchen.

http://www.bloomberg.com/apps/news?pid=20601087&sid=az0TYtD7YCKo&pos=4
Somewhere else do you think Timmy lied when he said he didn't work on the 100% PAYOUT on AIG swaps?

Jan. 22 (Bloomberg) -- Treasury Secretary Timothy F. Geithner spoke with Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett, JPMorgan Chase & Co. CEO Jamie Dimon and Goldman Sachs Group Inc. CEO Lloyd Blankfein on the day of the bailout of American International Group Inc., phone logs show.

http://abcnews.go.com/Business/story?id=8169165&page=1

update, geithner couldn't sell his house. he's renting it for $7,5k/month (which would make it an ok deal for $900k versus the $1,6 million geithner was hoping for).

shiller on the blue tiles and the need for a piece of accent furniture... just in case somebody here missed it:

http://www.truliablog.com/2009/07/30/video-timothy-geithner-john-oliver-the-daily-show-and-bob-shiller/

petty...
Much more interested in whether he was truthful on AIG. and if his policies are hurting the country.
I would speculate he's gone when they do mid-term elections.

not petty.. .funny... now admin what happens if taxes go up 50%? and IR goes back to 6%... instead of Geitner's "screw savers and save bankers" monetary plan? plz.... long term assets.. let's do long term analysis...

ok w67, now that we are friends again... (i like al jazeera btw!!!)

"screw savers": not the intention per se, but cannot help it when trying to help over leveraged/underwater households and gamblers in WS. savers do not get screwed when/if bernanke/geithner fail to avoid asset deflation, my gut feeling says there's no way these 2 clowns will prevent asset prices from collapsing again. the fundamentals just cannot improve.

all the contrary, as a saver you get paid by sitting in the sidelines with the tranquility of having a lot of dry powder available for when the inevitable comes (taxes go up 50%? and IR goes back to 6% you name it)...

if taxes go up 50%?
-------------------

if taxes go up, i'd go long the shadow economy (if that were possible!). i don't see the increase revenue expected from that move. higher taxes will come anyway, as politically, it's a needed 1st step before cutting services/entitlements/pensions to already vested individuals. politicians will have to prove that hte $ is not there before doing needed cuts imho.

http://www.nypost.com/p/news/business/on_the_outs_with_LxzGg5P6cAEZAZ2aKNSyAO

Judging from Treasure Secretary Tim Geithner's position (third to the left of Obama), he looks to be on the outs after reportedly bumping heads with the president over his plan to fix Wall Street.

http://baselinescenario.com/2010/01/22/secretary-geithner-needs-to-get-with-the-program/

The details of the new White House banking policy are somewhat vague and in places borderline incoherent – e.g., what exactly does “The President’s proposal will place broader limits on the excessive growth of the market share of liabilities at the largest financial firms…” mean (from point 2 in yesterday’s short and poorly edited statement)?

And the size restrictions currently in pencil on the back on an envelope near the president’s desk are almost certainly too lenient; the goal should not be a return to the status quo of 2007 or thereabouts - the clock must be rolled back much further and “too big to fail” completely removed from the financial map.

But the general principle behind our ”Volcker Rule” is clear. Here’s what President Obama said, “Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers.”

Whatever you think of that notion or the exact wording, this clearly implies that banks will get smaller. Secretary Geithner apparently does not get this (transcript).

There are two possibilities given that Tim Geithner is a smart person with a great deal of relevant media experience – he did not misspeak.

1. Geithner is not on board with the policy shift. This would be understandable, as it directly repudiates what he has worked hard to achieve over the past year.
2. Geithner does agree with the obvious interpretation – provided by the president – of the Volcker Rule and associated principles. As an expert, he is certainly entitled to his own view, but this is beyond awkward.

President Obama said, quite plainly, “So if these folks [the big banks] want a fight, it’s a fight I’m ready to have”. He cannot fight this issue and these people effectively if his Treasury Secretary is not on board.

If the Democrats go at this fundamental shift in policy in a half-hearted manner or with mixed messages, they will be hammered so badly in November that the Massachusetts special election will feel like a victory in comparison.

Kindly ask Secretary Geithner to appear on all the weekend news shows with a convincing “clarification”.

Thanks for the chuckle, admin. It's worth reposting:

http://www.truliablog.com/2009/07/30/video-timothy-geithner-john-oliver-the-daily-show-and-bob-shiller/

Is It Just Us, Or Did Tim Geithner Get Fired Yesterday?
Henry Blodget | Jan. 22, 2010, 7:45 AM | 12,414 | 57
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Tags: Wall Street, Regulation, Tim Geithner, Barack Obama, White House
Earlier this month, we argued that it was time for Treasury Secretary Tim Geithner to go.

Our logic was simple:

Geithner's save-Wall Street-at-any-cost policy has failed (the banks aren't lending), and it is distorting fairness and competition throughout the economy
Geithner's role in the AIG bailout and cover-up continues to undermine confidence in the current administration (and makes it impossible for the current administration to blame AIG on the last administration)
Geithner's "too big to fail" bailout policy has led directly to today's Wall Street bonus fiasco: There's no "bonus problem" at Lehman or Wamu.
Geithner's insistence on always putting Wall Street first has contributed to the populist rage that is now sweeping the nation and bludgeoning Obama in the polls.
We still think Geithner should go. And judging by yesterday's startling Get-Tough-On-Banks press conference, it seems Obama is coming to the same conclusion.

Recall the opening words of Obama's short speech:

Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who is the former chair of the Federal Reserve Board, and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board, that they’ve offered as we have dealt with a broad array of very difficult economic challenges.