megimoo
03-29-2009, 03:54 PM
Tim Geithner is now the United States 75th Secretary of Treasury and after about a month in office he's already being called incompetent and an improper selection for treasury head by many.
Before passing judgments against Mr. Geithner myself, I wanted to find out a little bit more about who he is and where he came from. So, you like I should be informed, and compliments of the Wall Street Journal please read this brief biography of Mr. Geithner before you continue on.
Now that you know a little bit more about Timothy Geithner, let's take a look at some of the criticism being thrown his way after only a month in office:
1. The UK say's Geithner's rescue plan is filled with holes
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4615213/Timothy-Geithner-must-swiftly-fill-holes-in-his-bank-rescue-plan.html
2. The US say's Geithner is the wrong man for the job
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4615213/Timothy-Geithner-must-swiftly-fill-holes-in-his-bank-rescue-plan.html
3. Prominent Bloggers are calling for his head
http://market-ticker.denninger.net/archives/792-Fire-Geithner.html
4. Prominent Economists are calling for his head
http://globaleconomicanalysis.blogspot.com/2009/01/geithner-discusses-nationalization-in-2.html
5. He is continuing to receive criticism for not paying his taxes properly
http://www.nytimes.com/2009/02/06/us/politics/05web-baker.html?_r=1
After reading his biography and some of the criticism against Mr. Geithner, you, like I, may be wondering why Barack Obama appointed him.
This week I decided to take that one step further and find out. My reasons were simple; I couldn't understand why a man in such a powerful position would be so widely criticized after only a few weeks in office. However, after the passage of the Economic Recovery and Reinvestment Act and the unveiling of Geithner's bank rescue plan something just didn't feel right. But, in fairness, before passing judgment, I needed to know more.
snip
The theory that I have come up with regarding why Timothy Geithner was selected as Treasury head is bold. However, before I share it with you, I feel that my thoughts are based on reasonable information which is available to everyone if they are willing to look.
My idea may be troubling to some, but sometimes the wildest ideas provide appropriate explanations during the wildest of times. So without further delay, after doing my research, I believe that Timothy Geithner may have been placed into the Treasury position, namely by forces within Citigroup (and potentially other large US banks), non-us based sovereign wealth funds, and their collective influence over the political system rather than on his actual qualifications.
I believe that this is possible based on the information that I will lay out for you in the following paragraphs. Each of these groups could have potentially needed Geithner in power because they all would have wanted to ensure federal bailout funds continue to flow into their banks in order to ensure they were not left to collapse or be nationalized.
A very bold accusation indeed, terrorifying if it's true, but now let me explain why I believe this idea has some credibility and why I do not feel our banks will be nationalized or ever be allowed to collapse (in terms of wiped out shareholder equity):
Point 1
If you reviewed Geithner's bio from the Wall Street Journal above, you learned that he was the under secretary to Lawrence Summers and Robert Rubin during the Clinton administration. This is a critical bit of information because Hillary Clinton is now our now Secretary of State. In addition to this fact her husband (obviously ex-president William Clinton) has been traveling around the globe since his presidency raising funds from international groups for his foundation.
Why does this matter?
It matters because our banks (namely Citigroup) have more foreign wealth interest in them than virtually any other single place of sovereign investment in the world (except for maybe US Treasuries). As a result if our banks share holder equity is allowed to go to zero all of those invested monies and owned shares would also go to zero. I would speculate that the Clinton's, as well as our government can't allow that to happen from an international relations stand point.
As an example, the most notable sovereign investor in Citigroup is Saudi Prince Al-Waleed bin Talal who has provided them an undisclosed (in aggregate) amount of money since the early 1990's. Although it's near impossible to know how much he specifically contributed, in late January of this year a story hit the news about his company being the largest shareholder in Citi and losing a fortune on their investment with the bank, clearly this is affecting him and Saudi Arabia, so deduction tells me it must be affecting all of the others sovereign investors as well.
Also keep in mind that Citi is not the only bank to need and/or seek sovereign wealth fund investment over the past several years. For quick reference here is a listing of some of the biggest investments in US banks from abroad (this is not all of them, if you search you'll find a ton more). This fact suggests to me that both Hillary and Bill have a vested interest in not allowing our banks to fall. To spell it out, if they did Hillary's job as Secretary of State would become infinitely harder and Bill's foundation would likely take heavy losses.
The Geithner Connection: Geithner is connected to both the Clintons through Bill's administration. I would speculate the Clinton's may need him to ensure shareholder equity does not get wiped out at the banks as a result of my points above.
Point 2
Lawrence Summers the 71st secretary of the treasury who Geithner undersecretaried (yes I used it as a verb) for has recently been accused of taking bribes from Citigroup.
In addition as of late, both he and Geithner have been pushing Christopher Dodd to stop pursuing salary caps for Wall Street Firms who received bailout funds. But lastly, and most importantly, Summers is also actively fighting Paul Volker to stop the formation of an outside council of prominent economists to assist the government in handling the economic crisis.
So why would he do all of these things?
To answer this question please consider for a moment what could happen if a group of outside economists had the chance to advise the government on what to do next. Based on the current sentiment of global economists, I would speculate that they'd probably decide to stop bailout spending at the bank level. This would greatly undermine both the previous administration's plans as well as Geithner's new proposal. Most importantly though this choice would likely undermine the Treasury's ability to transfer tax payer money into the banks and could render shareholder equity worthless.
If this happened the Clinton's would lose, Geithner would lose, and a lot of foreign nationals would be very upset. Seeing as Summers also owes the Clintons for his time in office, and must have a deep relationship with them, it is also not surprising to me that he would want to help out.
The Geithner Connection: Geithner was the under secretary to Summers during the Clinton administration. Through summers, Geithner gains access to a well liked previous secretary who has connections to the media as well as other high level officials. Summers also more closely links the idea of not wiping out share holder equity at our banks to the Clintons.
Additionally, the use of a Citigroup private jet for personal travel by Summer's brings Citi more directly into the theory.
snip
http://www.commoditynewscenter.com/articles/Insight/How_Geithner_Became_Secretary_of_the_Treasury
Before passing judgments against Mr. Geithner myself, I wanted to find out a little bit more about who he is and where he came from. So, you like I should be informed, and compliments of the Wall Street Journal please read this brief biography of Mr. Geithner before you continue on.
Now that you know a little bit more about Timothy Geithner, let's take a look at some of the criticism being thrown his way after only a month in office:
1. The UK say's Geithner's rescue plan is filled with holes
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4615213/Timothy-Geithner-must-swiftly-fill-holes-in-his-bank-rescue-plan.html
2. The US say's Geithner is the wrong man for the job
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4615213/Timothy-Geithner-must-swiftly-fill-holes-in-his-bank-rescue-plan.html
3. Prominent Bloggers are calling for his head
http://market-ticker.denninger.net/archives/792-Fire-Geithner.html
4. Prominent Economists are calling for his head
http://globaleconomicanalysis.blogspot.com/2009/01/geithner-discusses-nationalization-in-2.html
5. He is continuing to receive criticism for not paying his taxes properly
http://www.nytimes.com/2009/02/06/us/politics/05web-baker.html?_r=1
After reading his biography and some of the criticism against Mr. Geithner, you, like I, may be wondering why Barack Obama appointed him.
This week I decided to take that one step further and find out. My reasons were simple; I couldn't understand why a man in such a powerful position would be so widely criticized after only a few weeks in office. However, after the passage of the Economic Recovery and Reinvestment Act and the unveiling of Geithner's bank rescue plan something just didn't feel right. But, in fairness, before passing judgment, I needed to know more.
snip
The theory that I have come up with regarding why Timothy Geithner was selected as Treasury head is bold. However, before I share it with you, I feel that my thoughts are based on reasonable information which is available to everyone if they are willing to look.
My idea may be troubling to some, but sometimes the wildest ideas provide appropriate explanations during the wildest of times. So without further delay, after doing my research, I believe that Timothy Geithner may have been placed into the Treasury position, namely by forces within Citigroup (and potentially other large US banks), non-us based sovereign wealth funds, and their collective influence over the political system rather than on his actual qualifications.
I believe that this is possible based on the information that I will lay out for you in the following paragraphs. Each of these groups could have potentially needed Geithner in power because they all would have wanted to ensure federal bailout funds continue to flow into their banks in order to ensure they were not left to collapse or be nationalized.
A very bold accusation indeed, terrorifying if it's true, but now let me explain why I believe this idea has some credibility and why I do not feel our banks will be nationalized or ever be allowed to collapse (in terms of wiped out shareholder equity):
Point 1
If you reviewed Geithner's bio from the Wall Street Journal above, you learned that he was the under secretary to Lawrence Summers and Robert Rubin during the Clinton administration. This is a critical bit of information because Hillary Clinton is now our now Secretary of State. In addition to this fact her husband (obviously ex-president William Clinton) has been traveling around the globe since his presidency raising funds from international groups for his foundation.
Why does this matter?
It matters because our banks (namely Citigroup) have more foreign wealth interest in them than virtually any other single place of sovereign investment in the world (except for maybe US Treasuries). As a result if our banks share holder equity is allowed to go to zero all of those invested monies and owned shares would also go to zero. I would speculate that the Clinton's, as well as our government can't allow that to happen from an international relations stand point.
As an example, the most notable sovereign investor in Citigroup is Saudi Prince Al-Waleed bin Talal who has provided them an undisclosed (in aggregate) amount of money since the early 1990's. Although it's near impossible to know how much he specifically contributed, in late January of this year a story hit the news about his company being the largest shareholder in Citi and losing a fortune on their investment with the bank, clearly this is affecting him and Saudi Arabia, so deduction tells me it must be affecting all of the others sovereign investors as well.
Also keep in mind that Citi is not the only bank to need and/or seek sovereign wealth fund investment over the past several years. For quick reference here is a listing of some of the biggest investments in US banks from abroad (this is not all of them, if you search you'll find a ton more). This fact suggests to me that both Hillary and Bill have a vested interest in not allowing our banks to fall. To spell it out, if they did Hillary's job as Secretary of State would become infinitely harder and Bill's foundation would likely take heavy losses.
The Geithner Connection: Geithner is connected to both the Clintons through Bill's administration. I would speculate the Clinton's may need him to ensure shareholder equity does not get wiped out at the banks as a result of my points above.
Point 2
Lawrence Summers the 71st secretary of the treasury who Geithner undersecretaried (yes I used it as a verb) for has recently been accused of taking bribes from Citigroup.
In addition as of late, both he and Geithner have been pushing Christopher Dodd to stop pursuing salary caps for Wall Street Firms who received bailout funds. But lastly, and most importantly, Summers is also actively fighting Paul Volker to stop the formation of an outside council of prominent economists to assist the government in handling the economic crisis.
So why would he do all of these things?
To answer this question please consider for a moment what could happen if a group of outside economists had the chance to advise the government on what to do next. Based on the current sentiment of global economists, I would speculate that they'd probably decide to stop bailout spending at the bank level. This would greatly undermine both the previous administration's plans as well as Geithner's new proposal. Most importantly though this choice would likely undermine the Treasury's ability to transfer tax payer money into the banks and could render shareholder equity worthless.
If this happened the Clinton's would lose, Geithner would lose, and a lot of foreign nationals would be very upset. Seeing as Summers also owes the Clintons for his time in office, and must have a deep relationship with them, it is also not surprising to me that he would want to help out.
The Geithner Connection: Geithner was the under secretary to Summers during the Clinton administration. Through summers, Geithner gains access to a well liked previous secretary who has connections to the media as well as other high level officials. Summers also more closely links the idea of not wiping out share holder equity at our banks to the Clintons.
Additionally, the use of a Citigroup private jet for personal travel by Summer's brings Citi more directly into the theory.
snip
http://www.commoditynewscenter.com/articles/Insight/How_Geithner_Became_Secretary_of_the_Treasury