This morning's NY Times has a brutal, front-page expose of Tim Geithner's history while running the NY Fed, entitled: "
Member and Overseer of the Finance Club." It paints him as being nothing less than in the pocket of Wall Street.
In it we learn that Sandy Weill, Citi's long-time CEO, had proposed to Bob Rubin that Geithner be named CEO of Citi. (Geithner, supposedly, declined the offer.) We also find out that the government was aware that Citi would need at least a $45 billion federal aid package as far back as the Fall of 2007!
The implications of this article are, for lack of a better word, stunning. Among other things, we learn that Geithner, in his role as head of the NY Fed, was at the forefront of lobbying the government to lower banks' capital requirements as well as a leading architect to do an end-run around Congress so that they would not control the government's Wall Street bailout spending. It's a must-read, folks. Any doubts I had about Geithner staying around are off the table. He must go. Right away.
Member and Overseer of the Finance Club
By JO BECKER and GRETCHEN MORGENSON
Published (online): April 26, 2009
...Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation's most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele A. Smith, then an assistant Treasury secretary.
The proposal quickly died amid protests that it was politically untenable because it could put taxpayers on the hook for trillions of dollars.
"People thought, `Wow, that's kind of out there,' " said John C. Dugan, the comptroller of the currency, who heard about the idea afterward. Mr. Geithner says, "I don't remember a serious discussion on that proposal then."
Here are a couple of additional money (double entendre) quotes...
....he lobbied behind the scenes for a plan that a government study said could lead banks to reduce the amount of capital they kept on hand.
--SNIP--
By the fall of 2007, that was becoming clear. Citigroup alone would eventually require $45 billion in direct taxpayer assistance to stay afloat.
On Nov. 5, 2007, Mr. Prince stepped down as Citigroup's chief in the wake of multibillion-dollar mortgage write-downs. Mr. Rubin was named chairman, and the search for a new chief executive began. Mr. Weill had a perfect candidate: Mr. Geithner.
The article points to the controversy surrounding the apparent blank check the government has obtained with regard to its commitment of taxpayer funds to the Wall Street bailout. It concludes that Tim Geithner, moreso than perhaps even then-Treasury Secretary Paulson, was behind that end result.
Bank stress tests, as Stiglitz and Roubini have told us over the past few days, are nothing less than a joke.
Unemployment (that's the Labor Dept's U.6 figures, not U.3 nos.) will officially be at the 17%+/- mark in just another week.
On President Obama's 101st day in office, we'll be--officially--smack in the middle of the lengthiest U.S. recession of all time.
Banks off-balance-sheet "assets" still contain $5.2 trillion in unaccounted/unposted crap. Waves of commercial real estate and corporate debt defaults will, inevitably, occur over the next 24-36 months, adding trillions more to this price-tag.
Consumer credit, as we know it, has been eviscerated by Wall Street during this period, while we're lied to by our government that it will soon return to the marketplace.
The international economy is to the point where many sovereign states are expected to go into default over the next few months.
Yes. It is time to divert funds to Main Street; and it's time for Tim Geithner to go.