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Only A Taxpayer Would Mistake Tim Geithner For A "Banker"
Too often a tedious standoff between the somnolent/dry and the grandstanding/gratuitous, Congressional hearings about the financial crisis have nevertheless produced a few moments of existential clarity. (We refer, obviously, to the time in December when Maryland Rep. Elijah Cummings asked Neel Kashkari if he was a "chump", which was surely a question on the lips of anyone who had glimpsed the then-TARP overseer's high school yearbook photos.)
But Treasury Secretary Tim Geithner's appearance before a the TARP oversight panel this morning yielded a similarly exchange when AFL-CIO Associate General Counsel Damon Silvers dared to accuse Geithner of being a "banker":
Partial transcript after the jump.
"I'm a lawyer and you're a banker," Silvers said at one point during a disagreement over the way the public's exposure to risk was being presented in a chart.A large part of Geithner's ineffectiveness, as New York magazine explained last month, seems rooted in the fact that both Wall Street and Main Street seem to think he's playing for the other team:Geithner interrupted: "I've always been in public service," he said. Silvers went on, "But you were a banker."
"I've never been a banker," Geithner said. The secretary has worked in the public sector for just about all of his career, serving in the Treasury Department across three administrations, working for the IMF and his most recent job as head of the Federal Reserve Bank of New York. Perhaps Silvers meant that Geithner had been a central banker?
Silvers' time for questioning had run out as the issue was being resolved. But former Sen. John Sununu took it up as his time began. "I'd never confuse you for an investment banker," Sununu said.
Geithner responded: "I don't think you meant that as a compliment, but I'll take it that way."
To some in the White House, the sight of the financial world turning hard against Geithner is curious, even baffling. What the Obamans thought they were getting in him was Wall Street's guy. "They don't get it," says one name-brand Democratic banker. "Geithner was a $500,000-a-year guy. He was the regulator. People knew him, liked him fine, but he was never a member of the club."Former Bear Stearns chairman, of course, Jimmy Cayne is slightly less diplomatic on the subject of the Treasury Secretary, who oversaw the failure of his bank:
"The audacity of that prick in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan," he said. "Like he was the determining factor, and it's like a flea on his back, floating down underneath the Golden Gate Bridge, getting a hard-on, saying, 'Raise the bridge.' This guy thinks he's got a big dick. He's got nothing, except maybe a boyfriend. I'm not a good enemy. I'm a very bad enemy. But certain things really--that bothered me plenty. It's just that for some clerk to make a decision based on what, your own personal feeling about whether or not they're a good credit? Who the fuck asked you? You're not an elected officer. You're a clerk. Believe me, you're a clerk. I want to open up on this fucker, that's all I can tell you."But if Geithner can create common ground between Jimmy Cayne and Liz Warren, maybe they're just keeping him around to dispatch to southern Afghanistan.
Josh
Zachary
Charming gentleman (?) who ran Bear Sterns. It must have been a treat to work for him. Ugh - probably the kind of boss you had to tell that you didn't want to hear any more of his dirty jokes so he cursed you and called you a nasty name.
April 21, 2009 4:09 PM | Reply | Permalink
Judging solely from this brief example of the sensibilities of Mr. Caynes, a former Bear Stearns chairman, it seems obvious why an unregulated financial system is not in the best interests of the American people.
April 21, 2009 4:58 PM | Reply | Permalink
Tiny Tim may have a bit more explaining to do. No wonder the fight between Geithner and the regulators continues. Came across this today.....
This is interesting.....
turnerradionetwork.blogspot.com/2009/04/leaked-bank-stress-test-reults.html
The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.
The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.
When the tests were completed, regulators within the Treasury and inside the Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.
The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the “alternative more adverse” scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)
3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital! (HSBC is NOT in the top 19 banks undergoing a stress test, but is mentioned in the report as an aside because of its risk capital exposure to derivatives)
7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.
Put bluntly, the entire US Banking System is in complete and total collapse.
April 21, 2009 4:59 PM | Reply | Permalink
Geithner: For most of my career I worked for the IMF, which is not a bank. It's a series of tubes. Very, very large tubes; big enough to drive a truck through. My job was to stand at an intersection with a sign, a little iddy-biddy sign. The sign said "Stop", meaning a country's economy will be destroyed, and "Go", which meant a country's economy would be slowly destroyed. So, you see, I wasn't a banker — I only made like $500K a year — I was a regulator. Just because the trucks were full of other peoples' money should not interpreted as having anything to do with banking.
April 21, 2009 5:51 PM | Reply | Permalink