i think roubini is great, but that he would be a v. bad match for sec. of treasury – instead i think he should head obama’s council of economic advisors. bair or stiglitz i would prefer to see at treasury.

from geithner’s history what do you see as the pros and cons and why do you think that evidence suggests he is a decent choice? seriously.

The Reptiles rob Peter to pay Paul.

http://business.timesonline.co…..192894.ece

Bair, Roubini, and Stiglitz would have all been good choices. Would like to know when precisely Geithner predicted the crisis. He’s a Summers protege so I don’t know that he is that much better. Considering he’s at he’s at the New York Fed, he seems more an extension of the current crop of failed policies than anything new.

well, a 500 point swing is a positive sign? too early to tell. we are on the edge of the abyss with no one in charge. god help us.

Thanks Ian.

digg

dugg

BBC reports on the demise of the dollar, worth the read.

The death of the dollar?

It is a symbol – and a lever – of American power and leadership, itis the standard unit of account for much of the world’s economic activity. And in times of crisis, it has often seemed a safe haven.

But in the longer term, some experts believe this crisis could mark a turning point in the dollar’s fortunes, hastening a fall from power which has seen its value decline over several years before its recent rally.

“I think today’s financial crisis is going to hasten the end of the dollar as the world’s reserve currency”, says Avinash Persaud, chairman of Intelligence Capital Limited.

http://news.bbc.co.uk/2/hi/business/7684397.stm

roubini strikes me as a creative independent thinker best used in a position that let’s him go wild on the big picture and less on the technocratic and bureaucratic details. but that’s just an intuition. maybe it would have been useful to ask him what kind of position he’d like to have.

considering further, i may also be biased in that i’d like him to have a position that would not require him to stfu and give us only gov. talking points.

Considering what we could have gotten, I’ve happy with the Geithner pick. He’s a civil servant and a regulator; he isn’t a Wall Street guy.

I hope Obama winds up hiring people like Stiglitz too, and the Council of Economic Advisors is still available.

is it true that geithner fucked up on bear stearns? from democracy now! (nov 7):

ARUN GUPTA: Well, you know, with Democrats like these, who needs Republicans? Larry Summers recently wrote an editorial in the Financial Times where he said we must address entitlements. And, of course, when you hear a statement like that, that doesn’t mean that we need to have better Social Security payments or more Medicare; what he’s—it’s code words for cutting entitlements, one that of course would be disastrous in a recession. But he represents this Washington Consensus, both domestically and globally, that says we need to cut social welfare programs while bailing out the banks, the rich.

Geithner, I think, yeah, maybe he would be marginally better, but if you look at the deal he initially did with Bear Stearns and JPMorgan, there are a lot of critics of that who say he was had. He was negotiating with Jamie Dimon, who sits on the board of the New York Federal Reserve Bank along with Geithner. And he’s—Geithner is considered to have been hoodwinked in that deal, because the New York Federal Reserve ended up mainly getting worthless subprime mortgage securities in return as collateral for the nearly $30 billion it put up. It’s already recorded a paper loss of $2.7 billion. And he outsourced the management of the collateral to BlackRock. Now, it’s probably just a coincidence that also as part of the—one of Geithner’s main advisers is John Thain, who was CEO of Merrill Lynch before it was swallowed up by Bank of America, and it’s probably just a coincidence that Merrill Lynch owns a 49 percent stake in BlackRock. And what this really represents is, you know, the old boy network. The Federal Reserve Banks are in many ways just Wall Street clubs. And so, I think Geithner himself would not be that good of an appointment, you know.

I think Sheila Bair would be a better appointment. But why not think different? If we want to have a Clintonista, how about Robert Reich? You know, why not put someone who is for workers in charge of the Treasury, instead of leaving it in charge of Wall Street?

from wikipedia:

He completed high school at International School Bangkok, Thailand,[1] and then attended Dartmouth College, graduating with a B.A. in government and Asian studies in 1983. After, he obtained an M.A. in International Economics and East Asian Studies from Johns Hopkins University’s School of Advanced International Studies in 1985. He has studied Japanese and Chinese and has lived in East Africa, India, Thailand, China, and Japan.

After completing his studies, Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988.

In 1999 he was promoted to Under Secretary of the Treasury for International Affairs and served under Treasury Secretaries Robert Rubin and Lawrence Summers.

In 2002 he left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department. He then worked for the International Monetary Fund as the director of the Policy Development and Review Department until moving to the Fed in October 2003.[4] In 2006 he became a member of the influential Washington-based financial advisory body, the Group of Thirty.

Thus securing Bush’s legacy for all to see.
Mission Accomplished Indeed.

We be going down hard. Likely only question is KO or TKO.

I knew Bush was destroying the world… but damn I never though he would be so efficient at it or so greedy (I figured a few Billion was enough not to be detected, but he decided to go whole hog and liquidate trillions and destroy the country).

Live and learn I guess. Time to buy a belt that can tighten.

okay, let’s say miller understand macro econ. we are doomed with this AND the next admin. who are FBR if you know?

creative independent thinker

I don’t know Roubini much, but he doesn’t strike me that way. I got his email for a long time but never subscribed so all I could see was the headlines. He struck me as a plodding, diligent type, but one who lacked a certain amount of judgement, or timing. Everyone loves him now because he predicted the housing debacle, but iirc, he was harping on that forever before it happened. And in the forecasting and policy making business, being too soon can be a bad mistake.

i guess i should just try to be satisfied that he doesn’t come from goldman sachs?

also has everyone already seen this?: Richardson is in line to become Commerce secretary?

Geithner worked for Kissinger and Associates in Washington, D.C

Not good. Joining up right after grad school when kids are most idealistic? Not good.

Both Bush and Cheney are well-satisfied with their legacies.

Those shit-eaten grins are real.

Heh. The Kissinger Konnection.

Gosh, you folks are tough evaluators. I think it is a damn good choice.

Just heard on cnbc that Geitner favored LTCM bailout. That’s a big strike against him.

i probably should defer to your judgement on this one… as you’ve been watching him longer than i have. but i don’t see him as someone who follows conventional wisdom – which is really the safe position to take: if one is wrong it’s ok because well, everyone else got it wrong too. for cea, i much prefer someone who will think things through on their own even if they get some stuff wrong. and being too early is useful when in an advisory position – because it can get the nuts and bolts policy makers to considers possibilities that might not have even been on their radar.

never-ending constant whining, no matter who what or where

i wonder if he ever testified before congress during that time. will have to go looking, as it would be interesting to see what he had to say.

FBR?

Ian, FYI. I heard on cnbc right after the appt came out that Wall St. made the choice, all the Obama donors (someone did a link in an earlier thread and they financed something like 60% of Obama’s campaign). Summers was their first choice but his big mouth got him bounced. So I don’t know if all that is true, just repeating what was said.

What is the impact of getting Clinton out of New York and the other recent moves? For instance Schumer is an odd guy with some stupid ideas. Spitzer got taken out. Clinton is getting shipped out. New York FED coming in as FED.

All random, more of the same club, tin-foil hat?

Sure seems like a few people in NYC are responsible for what about 100 trillion dollars and at least the US stake in the globe.

would like some good news, would you be willing to describe why? thanks!

We’re talking past each other as I think you think conventional wisdom in economics is what the Rs say it is. But there’s a whole profession out there who think that’s nuts. The division is probably 1:99, or maybe 10:90. So the vast majority of us, including Roubini, are in the latter group. With that group, Roubini never struck me as particularly creative.

Heh. It could have been worse. Guiliani could have been prez.

Re: Roubini – I agree with this 100 percent. Let Geither keep Wall Street happy, while using Roubini to develop actual policy on the Council of Economic Advisors.

Keep Bair where she is now – if we have competence in some places, which appears to be the case, let’s keep them there until we have ridden out the storm somewhat.

Do you know who Geithner works for? Really?

Have you looked into his career path, and how many ways it intersects with David Rockefeller”

IMF, CFR, FED?

Do you comprehend that Obama is not in charge of anything?

I predicted this announcement would occur today, two days ago. I predicted it would cause a massive short squeeze when it occurred. They effin’ telegraphed it using their CNBS surrogates.

“The Boys” have known about this announcement and its timing for months.

But they didn’t give you that memo.

The entire “game” is rigged. There is no “market.” None.

The next take down is JP Morgan Chase (Rockefeller) swallowing Citi.

Follow the money to the true power.

not what the Rs say, but close enough, what the neoliberals of the 90s say.

who has struck you as a creative big picture type thinker of that other group?

that’s who miller works fer. FBR Capital Markets!

lol. it could always be worse. you remind me that it could be much, much worse.

Have you been following Roubini for awhile? I have a vague memory that he was harping on the debt/housing problem way too far in advance of its actually imploding, as I mentioned in 15. Do you know whether that’s accurate? I should not want to repeat it if not.

There’s not enough tin foil on earth to encompass the magnitude of this conspiracy. Think bigger. They do.

we don’t have a big thinker but bama. the rest are too timid.

A plodder with his/her head screwed on straight would be fine with me. The usual suspects for now. I really haven’t followed the subject or the profession for the past 8 years until the housing bubble burst.

you are suggesting that it matters what happens in NY? the us and the WORLD is down the toobz. ny can take care of itself, imo. heck, that’s what they always say.

Geithner was going to be designated Treasury Secretary by either McCain or Obama. The Masters Of The Universe had the entire game wired either way. They understand that the entire Republican v. Democrat thingie is just a ruse to transfer wealth to their Media entities. They took the entire economy to the brink, and then told Obama the deal. They were all short until noon today. Is this shit easy, or what?

Have you sought to comprehend the entire truth and connect all he dots?

http://plungerspeaks.blogspot.com

you must have made a fortune with that info. wish you had told me. :)

When JPMorgan saw the Bear’s books, they could not wait to get their hands into the cookie jar.

The main treat was that Bear had 12 million longs on gold which would nicely balance out their holding of shorts.

The crime of the century.

was just curious as i set up google news alerts on reporters and others who’s public reports i don’t want to miss.

I’m not sure when Dr. Doom began calling wolf, but I’d say he was probably watching the housing bubble curve romp over the trendline — knowing how it would end, perhaps not when.

NR’s “12 steps to meltdown” (I forget the exact title) was eeriely predictive.

I seem to recall Bill Bonner starting somewhere in 2002 saying the housing market would all end in tears.

new thread

The oil price take-down was foretold this summer by Lindsey Williams. Look for his videos on You Tube.

The fact that the oil barrons were able to run the price of oil below $50 (as Lindsey said they would) despite the fact that US miles-driven were only off 3% year-over-year is EVIDENCE that the prior ramp-job to $150 per barrel was 100% manipulated. CRIMINALLY SO. There was no “supply/demand” equation in play – just pure greed. The oil companies and the banks ARE the “government.”

The Masters Of The Universe acknowledged that they probably couldn’t get away with simply nuking Iran (their first choice), so they settled on bankrupting the oil-producing countries instead, buy running the price of oil to $50 – destroying their currency and their economy. The ONLY way to accomplish that was to destroy our economy (and in so doing, destroy consumer demand).

Next comes the CIA/Mossad instigation of internal strife inside Iran.

Do you have a copy of the New World Order script? Do you know what page number they’re all on?

did you? make a fortune today?

I certainly could have. I’m simply too disgusted to participate in the FED’s manipulation of my fellow citizens.

Two days ago I told a buddy of mine to get double-long the financial ETF by this morning in anticipation of today’s Geithner announcement.

The CNBS open-mouth operations tipped their hand earlier in the week, as they conditioned the public to welcome a Geithner announcement.

David Rockefeller controls EVERYTHING.

Swopa’s upstairs…

as one of a very small minority within the US population (a pagan), i cannot help but notice (and be envious and fearful of) a much common thread when it comes to money and power in Washington D.C.

the current Chairman of the Federal Reserve
(often referred to as “the most powerful man in the world)
the proposed Secretary of the US Treasury
the proposed White House Chief of Staff
the proposed (now withdrawn) Secretary of Commerce
the now (and future) Chairman of the Senate’s Homeland Security Committee
the projected future Chair of the Senate Intelligence Committee
the newly elected Chairman of the House Energy and Commerce Committee
the current US Attorney General
the current US Secretary of Homeland Security
and if the rumour of Jane Harman’s future as CIA Director also comes to fruition, what will this picture look like to US’ allies (and enemies) in the Middle East ?(not to mention the words “Clinton”, “Secretary of State” and “obliterate” in the same sentence)

i’m thinking now might be a good time to start learning to speak Chinese.

It must be understood that there is no policy that will save us from huge dislocations. The banking and financial system are broken. Everything is ad hoc now. No matter how bad you think things are they are worse.

In order to slow the destruction Paulson, Bernanke, et. al, have borrowed over one trillion dollars since May and spent much of it on buying troubled credit securities from troubled financial institutions. In a strange feedback loop the Fed or Treasury has purchased the troubled paper with the borrowed money, the sellers, banks and financial entities, have used the cash to buy Treauries. Thus their balance sheet looks good holding assets which are sound instead of dodgy ones nobody trusts. However you will note that the thing is a closed circle.

In the meantime other potential borrowers are crowded out. Spreads widen and widen again. Meaning borrowers must pay more if they can even borrow at all. Thus they become more impared and less credit worthy yet again. What is a virtuous circle for Fed borrowing is a vicious one for the rest of the market.

In a nutshell the Treasury is sucking all the free money out of the system and making things worse. All in the name of saving old stuff, not one penny going into the real economy. It’s a disaster of monumental proportion. Into this steps a new Treasury Secretary. What can he do? There is not one single thing he can do which doesn’t involve huge problems and pain.

It should be noted that despite the huge Treasury borrowing, rates are at historic lows. Due to the feedback loop described above and the general rush out of everything risky, which is everything else. Someday those rates will rise and when they do American will discover that 25% or more of it’s tax dollars are going out to pay interest.

This is all before any stimulus package mind you.

Geithner’s record of public statements as NYFed president:

Speeches @ New York Federal Reserve Bank

His first was delivered on March 25, 2004 on “Change and Challenges Facing the U.S. Financial System.” As a kind of inaugural address before the bankers he was to work with, it’s rather smooth as one might expect. Still, Geithner manages to among other things note that

Increased reliance on derivatives, securitization, etc., have made the banker’s essential task of risk management far more complex;
Greater concentration in the finance industry which has also occured has increased the risk to the whole system from the failure of even just one crtically-placed institution;
In view of the forgoing and other similar considerations, “Supervision and regulation, and the enforcement response to management failures” would become necessary to continue to maintain a stable financial system through evolving uncertainties.

Through the next three or so years of his tenure, his attention in public remarks to risk management and the systemic challenges posed by “modern” derivatives became his recurring theme. I do not think that his optimism on these issues grew from the time of his inauguration.

I do think there’s some chance that he might make a pretty good job of Treasury Secretary, but who knows?

‘Scuse me, that full quote is actually

Supervision and regulation, and the enforcement response to management failures, should help strengthen the incentives for a stronger compliance infrastructure, but they cannot insulate firms from the consequences of reputational damage.

which is only somewhat like my accusation.

“Greater concentration in the finance industry which has also occured has increased the risk to the whole system from the failure of even just one crtically-placed institution”

strikes me as a most curious thing to assert in March 2004 and then forget/ignore when deliberating the future of Lehman Brothers in August of 2008

You know that he forgot it?

not at all, ’tis quite possible that TG spoke up vehemently and was overruled. yet it is clear that the sum of the institutional memory of those in the room deciding the fate of Lehman Brothers, including Geithner, failed to adequately weigh his words from 2004. (though one must always remember that in the W Administration, political considerations always come first, and since JEB was an integral part of LBros, they may well have thought the political consequences were potentially too severe to bail out the POTUS’ brother)

Yes I have and if you look at RGE he was on top of this (just like Dean Baker was, for another example) for years.

Yea, but i believe you can still impeach a “retired” president – that would make him unique in the history books, which even he couldn’t ignore.

The CNBS open-mouth operations

I think most people under-appreciate how much is communicated if you’re only capable of listening and connecting some dots.

Some people think the Executive Order enabling prez W to take over in an economic crisis is news. I was discussing Executive Orders and their risk with friends back in 1992. I won’t criticize though. With all the noise in our society it’s hard to have room to listen and think.

In a nutshell the Treasury is sucking all the free money out of the system and making things worse. All in the name of saving old stuff, not one penny going into the real economy. …

…

This is all before any stimulus package mind you.

And, money for a stimulus or rescue plan of any kind will have to be borrowed too.

This situation is what the word ‘precipice’ means.

Stimulus to build infrastructure AND put money in people’s pockets seems like a good idea for both short and long-run. Printing more money will be tempting, but memories of the Weimar Republic will prevent it.

Know of any better idea for now?

What do today’s economists think of placing a small tax on hoarded monies? Can we spur activity safely?

His http://en.wikipedia.org/wiki/Timothy_F._Geithner Wikipedia bio reveals that he graduated from High School in Thailand, studied Japanese and Chinese and lived in East Africa, India, Thailand, China, and Japan. Promising that at a minimum, Geithner wasn’t a previous employee of Goldman Sachs like almost all the rest of them at Treasury.