Category: Timothy Geithner

Ruh-Roh: Massive International Bank Scandal May Involve Tim Geithner?

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Just now watched James Rosen on Fox News explaining this to Jenna Lee and — despite the eye-glazing intricacies of the financial details involved — recognized it as a potentially major scandal:

Years before the Libor scandal ripped through the financial industry, Timothy Geithner sent a memo to the Bank of England calling for a slew of changes to make it harder for banks to rig this benchmark borrowing rate.
According to a June 2008 memo obtained by FOX Business, Geithner, who was then president of the New York Federal Reserve, listed six changes aimed at making it more difficult for banks to distort Libor.
The disclosure comes as lawmakers step up the heat on bankers and regulators in the wake of Barclays . . . reaching a $452 million settlement for allegedly intentionally manipulating its Libor rates. More than a dozen banks are being probed for their handling of Libor.

So, the Treasury Secretary who has been up to his eyeballs in the political manipulation of the U.S. economy warned against the private manipulation of financial data for profit.

UPDATE: Explaining what LIBOR is:

The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. . . . It is the primary benchmark . . . for short term interest rates around the world.

If banks are manipulating LIBOR, this enables them to rig interest rates to their own advantage. James Rosen explained this on Fox News, and Jenna Lee nodded her pretty head as if she understood, but I’m not sure she really did. But this is no time to pick fights with feminists . . .

UPDATE II: What pushed this into the headlings was a massive document dump about the LIBOR scandal today:

The most recent revelations have suggested that the world’s central bankers knew about the rate manipulation before and/or during the [2008] financial crisis, and may have even leaned on banks to keep lending rates low.
These documents indicate that the Fed and the [Bank of England] had considered problems with the accuracy of LIBOR, and believed that Barclays was pushing down estimates of the rate at which it could borrow funds in order to appear more financially stable.

Read the whole thing by Simone Foxman of Business Insider who, I hasten to point out, is (a) female and (b) actually understands this stuff. That probably won’t help much with feminists outraged by my snarky comments about Jenna Lee, but I gotta try.

UPDATE III: The basic thrust of questions facing Geithner is whether he acted promptly and appropriately on reports that Barclays was deliberately manipulating LIBOR:

An unidentified employee of U.K. bank Barclays PLC told the New York Federal Reserve Bank more than four years ago that the bank was filing false reports on a key interest rate, according to documents released by the regional central bank on Friday. . . .
The New York Fed released the documents in response to inquiries from members of Congress about the role of Treasury Secretary Timothy Geithner, then the head of the New York Fed, and its questions about Libor.

So it’s a “what-did-he-know-and-when-did-he-know-it” kind of situation. And if I keep inserting inappropriately sexist comments into this story, it’s because people who probably wouldn’t pay attention to a complicated financial scandal might pay attention if I juice it up with a few gratuitous jabs at feminists.

Let’s face it: Amanda Marcotte doesn’t care if Tim Geithner was asleep at the switch while international bankers were wrecking the economy and robbing us blind, but she is outraged over “the epic and often confusing online battle over rape jokes” by the host of a cable TV show.

It’s a matter of priorities, you see.

Let the global economy go to ruin. The important thing is, somewhere a man is laughing, and feminism must put an end to that.

Turbo-Tax Tim Does 3 Sunday Shows UPDATE: Geithner Praises Obama’s ‘Incredibly Effective’ Economic Policies

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The Treasury Secretary is ubiquitous on Tax Day:

  • ABC This Week: Timothy Geithner.
  • NBC Meet the Press: Timothy Geithner; Rep. Michele Bachmann, R-Minn.; Sen. Kirsten Gillibrand, D-N.Y.
  • CBS Face the Nation: Timothy Geithner; Sen. John McCain, R-Ariz.
  • CNN State of the Union: Reince Priebus, chairman of the Republican National Committee; Reps. Carolyn Maloney, D-N.Y., and Cathy McMorris Rodgers, R-Wash.
  • Fox News Sunday: Ed Gillespie, adviser to Republican presidential candidate Mitt Romney; David Axelrod, adviser to President Obama’s re-election campaign.

UPDATE: Kool-Aid? Anybody want some Kool-Aid?

President Obama’s economic policies “were incredibly effective,” Treasury Secretary Timothy Geithner said Sunday, crediting the president with having prevented a depression.
While admitting it is “still a very tough economy out there,” Geithner said the administration is “making a lot of progress” and said “the broad indicators are pretty encouraging.”
Interviewed on ABC’s This Week, Geithner was asked by host George Stephanopoulos about the gloomy forecasts from economists such as New York University professor Nouriel Roubini, who called the current recovery “anemic, subpar, below trend, below potential.”
Geithner suggested Obama could not be blamed for that, saying “if he’d had more support from his opponents in Congress, then we could have got more things passed that would have put more people back to work more quickly.” . . .

Read the whole thing at The American Spectator, which I hope citizen-journalists will study as a lesson in Neutral Objective Journalism. One of the basic jobs of a D.C. political reporter is the Sunday show round-up: What did the “newsmakers” (government officials, party leaders, candidates, etc.) say on the Sunday shows?

If you can do nothing else from the comfort of home, you can always report What People Say on TV. The key to doing that effectively, however, is to write it as straight news: “Joe Friday, Just-the-Facts-Ma’am” is a style that anyone can learn by study and practice. Repress your bloggerly temptation to snark it up, resist any urge you might have toward sensationalism, and just tell it straight. Identify the key quotes and facts and assemble them into the kind of basic reporting that wire services do.

When doing a Sunday show roundup, you generally want to work pretty quick: If your version isn’t online by noon or 1 p.m. Eastern, you might as well not bother. But on other occasions and with other kinds of What People Say on TV stories, you may have time — if you think nobody else saw the significance of the interview, news story or C-SPAN segment you saw — to fill in the background from other sources.

Some may ask, “Where’s the value-added? Anybody can see what people say on TV. Why should I do my own version of the story? Why not just link the Associated Press or Politico story and add my own caustic ideological sarcasm?” I reply that the way other sources assemble the quotes and facts — the way they do Neutral Objective Journalism — inevitably introduces a certain angle or bias to the story.

You will discover, if you try your hand at writing the What People Say on TV story, that there is no such thing as neutrality, no matter how straightforward and factual your account may be. Other than transcripts, every news story on a subject of political controversy (and what Tim Geithner said Sunday was obviously such a case) includes elements of selection and emphasis that amount to a slant. Continue reading Turbo-Tax Tim Does 3 Sunday Shows UPDATE: Geithner Praises Obama’s ‘Incredibly Effective’ Economic Policies →

VIDEO: Bachmann Demands Resignation of Treasury Secretary Timothy Geithner

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DES MOINES, Iowa — As reported last night at The American Spectator and at Libertarian Republican, here is video of Bachmann’s statement:

The text of Bachmann’s statement:

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This President has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.
“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time. I call on the President to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

UPDATE: A statement from Herman Cain:

On Tuesday, April 19, 2011, Treasury Secretary Tim Geithner promised that America faced “no risk” of a credit downgrading. Less than four months later, he is proven shamefully wrong. As I have feared for months, the S&P has chosen to downgrade America’s credit rating from AAA, which we have always enjoyed, to AA+.
Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America’s financial standing in the world.
As a corporate executive, I’ve rescued companies from the brink of bankruptcy and returned them to profitability. That involved balancing budgets or even creating them in the first place, something that the Democratic leadership in Congress hasn’t done for 828 days. If I couldn’t run companies without budgets, how can the government?
I also had to make tough budgetary cuts to save companies. Leadership is about doing what’s right, even when it’s difficult. But somehow, that sort of idea was never floated among those within the Obama Administration.
Now, Americans are fearful for their retirements and for their children’s educational savings. This is a country known for dreamers and innovators, for thinkers and doers. And now, we are a nation living in fear.
This is a sad day for America. Such a rating is unfitting of the greatest and most prosperous nation the world has ever known. And such a weak leader is, as well.

The Treasury Department is claiming to be victim of a mathematical error by S&P. Who do you trust to do math, S&P or Geithner?

Linked by Da Tech Guy — thanks!

UPDATE II: Linked by Reaganite Republican and by Tea Party Libertarian — thanks! — and welcome, Instapundit readers!

Renee Ellmers vs. Tim Geithner

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Rep. Renee Ellmers of North Carolina was one of the Tea Party’s favorite candidates from last year’s mid-term campaign:

Treasury Secretary Timothy Geithner, who has his own issues with paying taxes, explained to Rep. Renee Ellmers (R-NC) why taxes must be raised on small businesses to keep the federal government from shrinking. So what if spending went up by about a trillion bucks a year since President Obama took office.

When Ellmers finally told Geithner that “the point is we need jobs,” he responded that the administration felt it had “no alternative” but to raise taxes on small businesses because otherwise “you have to shrink the overall size of government programs” — including federal education spending.
“We’re not doing it because we want to do it, we’re doing it because we see no alternative to a balanced approach to reduce our fiscal deficits,” said Geithner.

“Balanced approach” has become a talking point for Democrats, obviously having been focus-grouped as a politically acceptable synonym for higher taxes:

House Minority Leader Nancy Pelosi isn’t impressed with House Majority Leader Eric Cantor’s decision to suddenly bail on the White House deficit talks this morning, citing his disagreement with Democrats’ positions.
“Yes, we do want to remove tax subsidies for big oil, we want to remove tax breaks for corporations that send jobs overseas, that list goes on,” she told reporters in the Capitol on Thursday. “I don’t know that’s a reason to walk away from the table when we’re trying to find a balanced approach.”

Notice that Pelosi isn’t engaged in a serious policy discussion, but is merely recycling DCCC campaign rhetoric about “tax breaks for corporations that send jobs overseas.” It didn’t work in 2010, but Democrats are going to keep repeating it — and reporters will keep quoting it — until people start believing it.

Einstein Was A Physicist. Repeating Others’ Economic Failures, Hoping For Success, Is Sane.

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by Smitty

The Federal Reserve holds interest rates where they are for an ‘Extended Period‘, and the Dow holds itself above 11k. One person in three thinks the country is one the right track, which may or may not be related to Fed policy.

Across the pond, Spain joined Portugal and Greece in the downgrade club. If words themselves could do the trick, Greece would be leading the way out of the pit, emphasis mine:

Speaking during a cabinet meeting Wednesday, Greek Prime Minister George Papandreou said that every EU member must “prevent the fire that intensified through the international crisis from spreading to the entire European and global economy.”
Papandreou insisted Greece was determined to bring its economy into order. “We will show that we do not run away. In difficult times we can perform — and we are performing — miracles,” he said, adding that “our government is determined to correct a course that has been followed for decades in a very short time.”

Via Blogprof, Peter Schiff, who is campaigning to replace Chris Dodd, rhetorically dribbles James Galbraith on the subject of debt like a California State check:

Let Galbraith eat cake.

Meanwhile, the Republicans appear to have decided that the havok to be wreaked by Dingy Hairy’s financial regulatory reform bill is less than the threat of an all-nighter trying to keep it off of the Senate floor.

Senate Minority Leader Mitch McConnell, Kentucky Republican, said there had been a “key agreement reached”.
He cited “assurances” from Senate Banking Committee Chairman Chris Dodd, Connecticut Democrat, that he would remove provisions in the bill that the GOP believes will lead to excessive risk-taking by financial firms requiring more bailouts.

Reached for comment, Bart Stupaka Democrat was nearly overheard saying that anything less that a privately signed Executive Order wasn’t worth the condom in which it was delivered.

Look, the Constitutionally legitimate Federal spending is less than half the budget. More dismal analysis here. Veering in the direction of something tasteless, one wonders how much personal, physical risk Mr. Galbraith would undertake in support of his “What, me worry?” analysis of the threat to the US economy. Strictly as a thought experiment, would he seriously bet his own future as cheerfully as he risks that of others, if the negative feedback touched him personally?

Determination to ‘bring the economy into order’ occurs when the budget submitted has a gazoutta less than the gazinta. It will also happen when the Federal government is confined to Federal tasks.  There are too many Galbraithians holding office today.

Reached for comment on the outlook, Tim Geithner was saturnine about the economy:

Previously:
Dow Loses 213 Points on Debt Crisis in Greece, Portugal; Rachel Maddow Trying to Figure Out How to Blame Sarah Palin

SIGTARP Report Confirms: Homeowner Bailout Program Won’t Fix Housing Crisis

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Connie Hair at Human Events reports:

A new report released yesterday (.pdf) by Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP) warns that Obama administration efforts to bailout homeowners through the Home Affordable Modification Program (HAMP) are ineffective and will not stem the sweeping tide of foreclosures.
The $75 billion HAMP program was created with a promise to bailout 3 to 4 million homeowners in foreclosure, paying lenders to modify troubled mortgages. Foreclosures reached 2.8 million in 2009 and are on track to exceed that total with over 932,000 foreclosures filed in the first three months of 2010, the report found.
The inspector general found the program “has made very little progress in stemming this onslaught” in a year with only 230,000 loans permanently modified. . . .
Rep. Jeb Hensarling (R-Texas), top Republican on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit put a fine point on the bailouts rewarding bad behavior.
“We must remember that 93.6% of households rent, own free and clear, or are current on their mortgages,” Hensarling stated. “Programs like HAMP that force the responsible majority to subsidize the irresponsible minority should be rejected. . . .
“Not only is this expensive program ineffective, it is completely unfair,” Hensarling said. “HAMP forces responsible taxpayers, struggling to make their own mortgage payments, to pay their neighbor’s mortgage. . . .”

Meanwhile, Hensarling is offering a bill that would repeal the Community Reinvestment Act, the Jimmy Carter-era legislation that helped spawn the mortgage meltdown.

Not only is the failure of HAMP the latest evidence that Obamanomics still isn’t working, but this SIGTARP report is yet further confirmation of my hunch last summer — when the “IG-Gate” scandal heated up — that Barofsky was “the IG most likely to get a Cabinet secretary sent to federal prison.” 

But we really don’t want to start talking about Tim Geithner and Goldman Sachs, do we?

VIDEO: Judge Napolitano on ‘TurboTax’ Geithner and the AIG Scandal

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Wow. I knew the Judge leaned libertarian — NTTAWWT — but I didn’t realize how hard-core he was until I saw that video. Lew Rockwell? Dude. A very interesting way to debunk that “neoconservative” smear against Fox News, eh?

Giethner and TARP inspector general Neil Barofsky will testify on Capitol Hill today. Bush’s Treasury Secretary Hank Paulson will cover for Geithner, who in turn will deny everything:

In prepared testimony released by a member of the U.S. House of Representatives Oversight and Government Reform Committee, Geithner also said that government was still exposed to the risk of substantial losses on AIG investments and was unlikely to fully recover all of its investments in the insurer.
“I had no role in making decisions regarding what to disclose about the specific financial terms of Maiden Lane II and Maiden Lane III and payments to AIG counterparties,” Geithner said in testimony sent to the panel for a hearing on Wednesday.

Yeah. The Obama administration’s all about accountability and transparency. They’re also about plausible deniability and blaming everything on Bush.

AIG Trouble for ‘TurboTax’ Geithner

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There’s blood in the water, and Congress wants answers:

Shares of American International Group Inc. slid Tuesday, a day ahead of a Congressional hearing on bailout money that was given to the troubled insurer.
Treasury Secretary Timothy Geithner is scheduled to testify Wednesday before a House committee about funds intended for AIG that were then routed to other banks.
In 2008, the Federal Reserve Board, through Geithner as head of the Federal Reserve Bank of New York, pledged $85 billion to prop up the ailing insurer.
That was one month after AIG, based in New York, had revealed billions in losses from credit default swaps.

And guess who else testifies tomorrow? SIGTARP:

Neil Barofsky, special inspector general for the $700 billion bailout, is set to tell the House Oversight Committee on Wednesday that he has initiated an investigation into whether the New York Fed instructed AIG not to disclose more than a dozen controversial counterparty transactions to the Securities and Exchange Commission. . . .
After the audit was released in November, House Oversight Committee Ranking Member Darrell Issa, R-Calif., asked Barofsky for copies of correspondence between the New York Fed and AIG. But Barofsky told Issa that he couldn’t hand over a copy of the records because the New York Fed told him not to share them. . . . (Emphasis added)

Who told you that Barofsky was the IG to watch? Who told you that Geithner was the Obama administration official most likely to take the fall?