How Geithner Could Hurt Dodd

Man, I don't like that flag symbol at the Inspectors General site. Anyway, remember Special Inspector General for TARP Neil Barofsky? We first learned his name during Obama's early IG scandal. I wonder why they wanted him, along with others, to be quiet? Could it be that CBS is now saying Geithner gave away the farm? That farm was paid for with taxpayer money, in case you've forgotten.

Enter Rob Simmons, now targeting Geithner in an on line effort to have him removed. Dodd, Simmon's opponent, has been desperately trying to portray himself as a populist in an effort to hold on to his Senate seat. So, what would a good populist do when faced with this kind of information on Geithner?

It's going to be fun to watch Dodd squirm on this one. Who believes he has the guts to stand up to Obama? Frankly, if he's such a good populist, why has he waited this long? 

If you recall, AIG's failure meant that the companies on the other side of all of its contracts (counterparties) were going to be left holding the bag. Under normal cases of bankruptcy, the court would impose haircuts to the amount of money due to counterparties, but because AIG didn't actually declare bankruptcy, the counterparties claimed that they were owed 100 cents of every dollar. The only bank that even considered taking a haircut was UBS - the Swiss, for goodness sakes - hard to imagine that a Swiss bank could make US banks look bad, but here's a case in point.

OK, so let's get this straight: the financial world is melting down, Uncle Sam had just saved the bankers' butts and now Tim Geithner the President of the Federal Reserve Bank of New York (FRBNY) was going to wimp-out? Yes, the Great Gazoo strikes again! (My friend pointed out that our current Treasury Secretary and former tax cheat bears a striking resemblance to this esoteric character from "The Flintstones" — Geithner has been the Great Gazoo since!)

Comments

[Al in St. Lou]

The most incompetent administration ever! And I can still remember the Carter administration--the one that gave us today's Iran.

[Pasadena Phil]

There are no "former" tax cheats.

[CHRI$ DODD]

Go ahead and follow Rob "Dede" Simmons. Has Newt endorced him yet? After all he is pro-abortion,pro-gay marriage,co-sponsor of an amnesty bill when he was in congress and here is a quote from a July 4th Tea Party event he attended - "Cap and Tax may be a good idea, but not now, not at this time." (Thank God for youtube)

Need I go on?

[Rick Caird]

I would not be so quick to indict Geithner. According to Economics of Contempt, Geither was in a very poor negotiating position. Companies like Goldman already had collateral in hand and as is pointed out, Goldman did not have to replace the amount of the CDS, only the CDS itself which was a lot less than the face amount:

http://economicsofcontempt.blogspot.com/2009/11/geithner-vindicated-in-tarp-watchdog.html

I am not a big fan of Geithner, but I am a fan of accuracy.

Rick

[Elmer Stoup]

Apart from his patent dishonesty on his own income tax responsibilities, what really irks me about Mr. Geithner is his total passivity as president of the NY Federal Reserve Bank, the regulator of NY-based bank holding companies. Why was Citicorp allowed to engage in all sorts of risky, speculative behavior on Mr. Geithner's watch??