Starting the Geithner Resignation Pool

By Dave Gonigan

I know we’re only three and a half weeks into the new administration. But I think it’s already time that informed lay people can start guessing how long Tim Geithner will last as Treasury Secretary.

I won’t take a position on this myself. I will instead marshal facts and evidence you can use to make your own guess in the comments section.

Let’s start with a piece in the International Herald Tribune, which surveys a host of establishment economists, all arriving at the same conclusion: Many of the major banks are insolvent, and Geithner’s TARP II plan — even once the details are fleshed out — will be inadequate to the task.

Hmmm… A Geithner brainchild that even by conventional, interventionist standards is a dud. Where’ve we encountered that before? Oh yeah, the decision to let Lehman go under last fall when Geithner was still head of the New York Fed.* Seemed like a good idea at the time, until it unleashed the Counterparty Cascade from Hell — nearly taking down AIG, forcing money-market funds to “break the buck,” and by some accounts bringing the U.S. financial system within three hours of meltdown.

Our next item of evidence is a report that Goldman Sachs (GS) called an emergency meeting of its biggest clients — hedge funds, private equity guys — on Tuesday after Geithner floated his TARP II turkey. Goldman first denied the meeting ever took place. Then it tried to spin the meeting as having been scheduled weeks in advance. Whatever the truth, clearly some of the meeting’s participants wanted it known they weren’t happy with the plan and strategically leaked the assertion that it was called at the last minute.

For someone who’s a Goldman guy through and through, Geithner doesn’t seem to be getting much of a vote of confidence here. No, Geithner’s never been on the payroll, but his designated chief of staff was a Goldman lobbyist, one of the board members of the New York Fed that Geithner used to run was a Goldman guy, and he’s a protege of uber-Goldman guy Robert Rubin.

So there’s the evidence, gleaned just from taking in my usual morning news diet. Again, I won’t take a stand on how long Geithner will last, although I strongly doubt he’ll be fired outright, which is why I call this the Geithner Resignation Pool; whenever the time comes we’ll get the usual song-and-dance about wanting to spend more time with family. So fire away with your own guesses about the timing.

* I’ve been misinterpreted on this before, so let me be clear: I’m a free-market guy who thinks all mismanaged banks should get what’s coming to them; better to purge the rot from the system and get it over with. I’m merely pointing out how Geithner blows it even using the yardstick of conventional bankster wisdom.

Comments

[NITRAM:]

We can not afford to give them more time. Look what they have done in a few weeks.Throw hin under the bus now.


On Feb 13 04:52 PM 3 Degrees of Separation wrote:

> I give "Timmy the Tax Dodger" six months - July 13th as his resignation
> (get thrown under the bus) date.

Feb 13 05:19 PM

[Paul_L:]

Tax Cheat Geithner in cahrge of IRS still have no plan how to deal with the same critical toxic assets from TARP I, which happened several months ago when he was fully immersed of the issue as the head of the New York Fed, He sounded more like another Messiah but to DO RIGHT while the same issue continues to fester. I suppose he can take his time while he is also collecting a $500,000 severance from the goverment, the same amount a bank CEO should not have as salary if the bank gets TARP. It is funny how it works.

Feb 13 06:31 PM

[Paul_L:]

(Forgot spell check)
Tax Cheat Geithner in charge of IRS still have no plan how to deal with the same critical toxic assets from TARP I, which happened several months ago when he was fully immersed of the issue as the head of the New York Fed, He sounded more like another Messiah but to DO RIGHT while the same issue continues to fester. I suppose he can take his time while he is also collecting a $500,000 severance from the government, the same amount a bank CEO should not have as salary if the bank gets TARP. It is funny how it works.

On Feb 13 06:31 PM User 168565 wrote:

> Tax Cheat Geithner in charge of IRS still have no plan how to deal
> with the same critical toxic assets from TARP I, which happened several
> months ago when he was fully immersed of the issue as the head of
> the New York Fed, He sounded more like another Messiah but to DO
> RIGHT while the same issue continues to fester. I suppose he can
> take his time while he is also collecting a $500,000 severance from
> the goverment, the same amount a bank CEO should not have as salary
> if the bank gets TARP. It is funny how it works.

Feb 13 06:37 PM

[old folkdancer:]

Timmy is damaged goods. Absolutely without ability to inspire confidence. He's got to go bye bye. Too bad Jamie Dimon wasn't asked (or was asked and refused the offer) This is a big county. There has to be someone better for the job willing to take the challenge.

Feb 13 08:38 PM

[Jrod:]

I'd be happy if he would agree to have TAX CHEAT tattooed in scarlet letters across his ample forehead.

Feb 14 09:04 AM

[ain't no fo...:]

Thanks CWest... there is more more meat in your comments than from the article and the rest of the politically motivated comments combined.

Feb 14 10:08 AM

[Yossel:]

Jamie Diamon for Sec. of T!

Feb 14 10:25 AM

[Tom Wright:]

You cannot impeach a Senator or Congressman. And if you want to impeach a president, you should have started one administration ago when this was all coming to a head. And having the guys who oversaw this fiasco being put in charge of cleaning it up is the height of absurdity.
They should have been jailed for financial terrorism.

Feb 14 10:25 AM

[jasonjim:]

Cwest is at least positive in his comments, although I don't know where he got his sort of insider information. To all the doomsayers who want to slash and burn the economy and the banking system into oblivion and the eventual destruction of the United States itself, I say boo to you, all and where are your guts in standing up to a challenge when things get rough.

Feb 14 11:02 AM

[kelm:]

We have a fundamental problem that Rogers, Roubini, Taleb, Faber, and others keep harping on (correctly), namely - the same people who were in positions of power while the conditions for the crisis developed and failed to foresee it or stop it are the ones we're looking to for answers on how to resolve it.

I'm not happy with Geithner and he really came across as second rate during the speech and subsequent interviews. I have said before I expect he'll be the first to go.

Having said that, Jamie Dimon, who I have a lot of respect for, also did nothing to steer clear of this crisis or sound the alarm. The best you can say is that he seems to have steered his company clear of the worst of it.

We can get rid of Geithner but I am not sure who is any better. They keep saying Summers is the "smartest guy in the room". Funny, that's the same line they used about the Enron guys....

Feb 14 11:05 AM

[Jimbo:]

While it is true that George Bush and fellow Republicans are culpable in this mess, let's not overlook the valuable contributions made by Jimmy Carter, Barney Frank, Chris, "two sweet heart mortgages" Dodd and lovable Bill Clinton. Both parties helped repeal Glass-Steagall(BIG MISTAKE).Inside the beltway is a mysterious force field, similar to the Bermuda Triangle.People who enter there, including journalists and judges, suddenly lose all their brains and common sense.

Feb 14 11:13 AM

[User 357021:]

Ron Paul- he HAS A CLUE and could care less about wall street interests.


On Feb 13 03:53 PM squark62 wrote:

> so many people want Armageddon. why? because it makes great theater
> and big ratings for the media? if not geithner then who? larry
> summers, paul volker, larry kudlow? i would shudder to consider
> somebody like a kudlow as head of the US treasury.

Feb 14 11:13 AM

[Michael Boyter:]

America is comprised of the most diverse group of people in the world. This is one of our strengths. Why then do we let the few extremists run the national media? This is one of the biggest causes of the problems we are in, the lies that they continually promote as news, due to their personal financial interests. They should be supject to a truth publishing test, if they continually publish lies, they should loose their license and have it resold to those that will publish the truth.
Right, Left, Center, it's all a joke of reaching for power to maintain control. They all have their own interests in their sights, I don't think they have the best interests of America, or her people in their agenda.
Financial Justice should be equality for all. If those in power don't enforce the constitution they are indeed ECONOMIC TERRIORISTS. Start with those like Maddoff, he should be in Jail with the common population. He deserves nothing special in the way of treatment. Then go to those who caused this mess and pushed it with their killing every safeguard to our constitution and the financial markets. If a special prosecutor is not appointed to look into the financial dealings of the former administration and the DOD we are bound to make the same mistakes again and again. On top of that our children's children will be paying for them. Regardless, the Idiot Child of the Bush dynasty continues to spew he mantra in Canada and spend the rewards for his most evil deeds. The result will be that the 2% on top will stay there and the 98% of those who work for a living and have their quality of life Greatly reduced.
If we don't enforce the laws on the books, They mean nothing, and the best we can hope for is a band-aid on an infected wound.
1. The Truth Commission is a great Idea. If the truth were known the Republican and the Democratic Parties as we know them would cease to exist as they are today and those who subscribe to the truth, and an open and free form of government would rise to the top, the others would sink in their own extrament. Lipstick on a pig washed off with a good bath, that is precisely what the Republican and Democratic parties both need, A good bath. Put the waste water in their own water supply and let them drink from their own creations.

If the don't get real and face the facts, America is going to be even more hard pressed to regain the respect and leadership ability that was flushed with the Illegal actions of the Bush Dynasty.
2. We need to educate the masses. The Leave every child behind garbage has done just that, as we cut our educational dollars even more. Thanks GOP.
3. End all subsidies for Coal and Oil and let them compete with renewable energy on an even playing field. The coal and oil must be phased out or it won't matter way.

We need to remember that America was once a Nation that was Looked up to by the rest of the world. These Right wing fear mongers who spew their hatred and racism are Terriorists. Rush Limbaugh should be right next to Maddow and treated as such. He's an insult to humanity.

Obama deserves a chance, Cleaning the evil mess out of this country will take more then all his actions. It must start with cleaning the media which promotes the lies of those in power who stole ever cent in the treasury and squandered the good will of Our Great Nations Heritage. God Bless America, I am afraid its at the point where he is one of the few who can really help at this point.

All the best,
Michael

Feb 14 11:21 AM

[Teutonic Kn...:]

The appointment of Timothy Geithner reminds me of the "Fox and the Hen House" Parable. How could we have had appointed a "Fox" to guard that hen house of ours in the first place?

I feel sorry for Mr. Obama who had mistakenly let himself being pulled the wool over his eyes.

One wrong doesn't justify two. We have had too many wrongs already. How fast could he undo this one? Could we afford the time?

Feb 14 11:33 AM

[henarl:]

Geithner is already a couple of weeks past his ideal resignation date. In view of our recent Treasury Secretarys, perhaps we should just abolish the office and have Obama run Treasury directly.

Feb 14 12:30 PM

[Tom Wright:]

In regards Bernie Madoff, at least two people have committed suicide as a result of his illegal activites. Doesn't that at least qualify for some kind of homicide charge in that any reasonable person could foresee the results of his actions?

Feb 14 01:49 PM

[Uwinout:]

It appears all are at a loss and neither party Dems/Repubs, Seem to have a clear understanding of the mechanics of repair. As for Geithner, he doesn't seem to have the fire to tackle the problem at hand. So, yes I think he'll soon up and quit.

Feb 14 04:13 PM

[guzzii:]

Geithner is a classic bureaucrat...and will do much damage and that should already be clear...

unfortunatley more danage will ocur befor he is ousted.

Feb 14 05:54 PM

[Seen All It...:]

So can we start an office pool similar to the football and NBA playoff pools so at least someone can make some money off Geithner leaving once Obama figures out that he is just more of the same. There is no way legally for the Treasury to buy the bad assets at inflated prices. That is why there is no plan, no one found the right loophole yet. Now the Fed Reserve can buy these assets at any price, but then who will bail them out?

Feb 17 01:38 AM

[mike0050blue:]

I don't own any bank stock directly but I know if these large banks fail then who will pay back the money to my pension fund that these banks borrowed from? Either way (protecting the banks or letting them fail) it's going to be very expensive. Doesn't the government guarantee a good chunk of pensions lost due to bankruptcy? Wouldn't they have to pony up if Citibank took a 1000 pension funds down with it? I think so. So who pays for that? Either way...theres no free lunch and quite possibly trying to save and reform these banks maybe the cheapest alternative. I guess maybe we would all really like to see them rot though!

Mar 10 07:39 PM