Tim 'Generalisimo' Geithner Had Proposed U.S. Guarantee of All Bank Debt

Discussion in 'Economics' started by ByLoSellHi, Apr 27, 2009.

  1. That's right, folks.

    'We've got trillions to print, and it's all gotta' go!!! So get on down to The House of Treasury, whether you're a too-big-to-fail bank, a regional player, or a two-bit S&L in a podunk town, and we'll back ALL of your DEBT, NO QUESTIONS ASKED!!!!!'

    That's Geithner's House of Printing, where we won't let you say no to free taxpayer money!!!!


    Member and Overseer of the Finance Club


    PIONEER Since the financial crisis broke, Mr. Geithner has been the federal regulator most willing to “push the envelope” to look for answers, said H. Rodgin Cohen, a prominent Wall Street lawyer.

    Published: April 26, 2009

    Last June, with a financial hurricane gathering force, Treasury Secretary Henry M. Paulson Jr. convened the nation’s economic stewards for a brainstorming session. What emergency powers might the government want at its disposal to confront the crisis? he asked.

    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.”

    But in the 10 months since then, the government has in many ways embraced his blue-sky prescription. Step by step, through an array of new programs, the Federal Reserve and Treasury have assumed an unprecedented role in the banking system, using unprecedented amounts of taxpayer money, to try to save the nation’s financiers from their own mistakes.

    And more often than not, Mr. Geithner has been a leading architect of those bailouts, the activist at the head of the pack. He was the federal regulator most willing to “push the envelope,” said H. Rodgin Cohen, a prominent Wall Street lawyer who spoke frequently with Mr. Geithner.

    Today, Mr. Geithner is Treasury secretary, and as he seeks to rebuild the nation’s fractured financial system with more taxpayer assistance and a regulatory overhaul, he finds himself a locus of discontent.

    Even as banks complain that the government has attached too many intrusive strings to its financial assistance, a range of critics — lawmakers, economists and even former Federal Reserve colleagues — say that the bailout Mr. Geithner has played such a central role in fashioning is overly generous to the financial industry at taxpayer expense.

    An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions.

    His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.

    In a pair of recent interviews and an exchange of e-mail messages, Mr. Geithner defended his record, saying that from very early on, he was “a consistently dark voice about the potential risks ahead, and a principal source of initiatives designed to make the system stronger” before the markets melted down.

    The New York Fed is, by custom and design, clubby and opaque. It is charged with curbing banks’ risky impulses, yet its president is selected by and reports to a board of directors dominated by the chief executives of some of those same banks. Traditionally, the New York Fed president’s intelligence-gathering role has involved routine consultation with financiers, though Mr. Geithner’s recent predecessors generally did not meet with them unless senior aides were also present, according to the bank’s former general counsel.

    By those standards, Mr. Geithner’s reliance on bankers, hedge fund managers and others to assess the market’s health — and provide guidance once it faltered — stood out.

    His calendars from 2007 and 2008 show that those interactions were a mix of the professional and the private.

    He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the Four Seasons restaurant or in their corporate dining rooms. He attended casual dinners at the homes of executives like Jamie Dimon, a member of the New York Fed board and the chief of JPMorgan Chase.

    Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his supervision. Robert E. Rubin, a senior Citi executive and a former Treasury secretary, was Mr. Geithner’s mentor from his years in the Clinton administration, and the two kept in close touch in New York....

    ....(7 page article; click on link above to read rest of article for free)
  2. Geithner's Calendar at the New York Fed

    * Original Document (PDF)

    The following are the daily schedules of Timothy F. Geithner from January 2007 to January 2009, when he was the president of the Federal Reserve Bank of New York. The New York Times obtained this calendar through a Freedom of Information Act request. The Times has redacted personal addresses and phone numbers, but otherwise has reproduced the calendar in the form it was released; in some cases, dates are missing, in others, duplicates reflect revisions to his datebook. We have highlighted some items of note at the right -- click on each chapter heading to expand it.

  3. Cutten


    Jim Rogers is right - Geithner presided over the the bubble in the first place and did nothing to stop it, so clearly he has no clue. He should be fired and replaced by someone who actually saw the bubble coming and tried to stop it or at least warned about it.