Tag Archives: Tim Geithner

Dreaming of Recession

Well, here’s something rather unusual… Appearing earlier today on BBC, Alessio Rastani, an independent stock trader, confessed to a stunned interviewer that, like most of his colleagues on Wall Street (or in the City of London), they “don’t really care that much” how world leaders claim they’re going to fix the economy as their job is simply to make money from the situation. Quite to the contrary, Rastani admitted that he’d been dreaming of a market collapse for three years. “I go to bed every night, I dream of another recession,” he said.

As if that bit of candour wasn’t sufficiently amazing, Rastani went on to claim that Goldman Sachs rules the world not governments and that Goldman Sachs “don’t care about this rescue package” (i.e., the proposed plan to leverage the EU’s €440bn bail-out fund to €2 trillion to cope with the impending debt crisis in Italy and Spain) because they know “the market is toast… the stock market is finished.”

Rastani dryly concluded by warning viewers to act quickly because “In less than twelve months, my prediction is, the savings of millions of people are going to vanish.”

Update: Is Rastani a fake or a legitimate asshole? Debate and links about this in the comments.

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Geithner at the CFR

On Taxpayer Money & the Bailouts

Earlier in the week, Treasury Secretary Tim Geithner addressed a meeting at the Council on Foreign Relations to discuss his plan to adjust regulations on the U.S. financial system. Here, answering a question about the perceived socialization of risk and privatization of profit, Geithner justifies risking taxpayer money during the financial crisis to revive the markets. “Central fact is that governments have to be prepared to take risks the markets can’t take, for a temporary period of time in order to get a firmer foundation for repair,” he said.

Debunking the “One World Currency” Flip-Flop

ForaTV has the complete hour-long speech and Q&A session here. It’s well worth checking out. If nothing else, it’s revealing how maliciously right-wing critics have distorted and taken his remarks out of context in order to fabricate their latest twist on the febrile “one world currency” conspiracy theories now being enthusiastically promoted on Fox News and circulated around the Wingnutosphere (where they evidently seem to get picked up by ignorant crackpots like Michele Bachmann).

At the heart of their allegations is the contention that Geithner’s had supposedly “flip flopped” from his statement made the previous day before the House Financial Services Committee where Bachmann had ridiculously asked both Geithner and Fed Chairman Ben Bernanke if they would “categorically renounce the United States moving away from the dollar and going to a global currency.” Both answered unreservedly “yes.”

Taking a snippet from his response to a question on the same subject at the CFR event the next day, they made it appear that Geithner had reversed himself. That’s not the case at all however, as can be seen from the following answers concerning the idea floated by Zhou Xiaochuan, the governor of China’s central bank about reviving the idea of a new international standard of some kind for foreign currency reserves.

On the, on the first question, I haven’t read the governor’s proposal. He’s a – a remarkable – a very thoughtful, very careful distinguished central banker. Generally find him sensible on every issue. But as I understand this proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rates. And we’re actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architecture, than – rather than – rather than moving us to global monetary union.

What Geithner was “open to” was the idea of changes in the IMF special drawing rights and most decidedly not the concept of a single world currency. Asked again at the end of the talk to further clarify his comment on the reaction to the central bank governor of China’s idea, the moderator rephrased the question this way: “Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency or the reserve currency?” To which, Geithner answered:

I do not. I think the dollar remains the world’s dominant reserve currency. I think that’s likely to continue for a long period of time. And as a country, we will do what’s necessary to make sure we’re sustaining confidence in our financial markets and in — and in the productive capacity of this economy and our long-term fundamentals.

He really couldn’t have been much clearer than that. Oh, and just in case you think he’s dissembling a bit with the latter part of the second answer, those comments about productive capacity and so on refer to earlier remarks about such components being essential to the strength of the dollar and its long-term “sustainability” in this regard.

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Geithner, Bernanke Grilled by Loon

Rep. Michelle “Crazy Eyes” Bachmann (you may remember her from this golden oldie) questioned Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke Tuesday on Capitol Hill in a lengthy exchange, where the kooky congresswoman, intimating some kind of socialist conspiracy was afoot, repeatedly asked what part of the constitution gave the Fed and Treasury the powers they’ve already taken in the ongoing financial crisis. Watch Geithner’s perplexed expression of dismay at her retarded questions — it’s priceless.

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Geithner’s Bank Detox Plan

From tonight’s News Hour, Paul Krugman & Donald Marron, CEO of Lightyear Capital, a private equity firm, discuss Geithner’s plan.

So, it’s good… or bad. And it may work… or it may not.

I wonder if those opposed to Obama’s policies will now draw on Krugman’s criticisms to bolster their arguments that this plan won’t work. That would be pretty funny, considering they’ve dismissed him as a clueless liberal for the last ten years or so.

Update: With the plan receiving generally favourable reviews in the press (liberal reformers like Krugman and “doomers” like Schiff notwithstanding) and with Wall Street making its biggest rally since last November… you can be sure that the Bloggin’ Tories will say NOTHING about it. Doesn’t even exist in their whacky funhouse world of lies and distortion. Now, had the market tanked… then they’d be all over it like Jabba the Roy on a case lot of pudding. Not that I’m suggesting they’re self-serving, two-faced douchebags with highly selective vision or anything…

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