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Tim Geithner

Dissecting Tim Geithner's 658-Page Schedule

Moe Tkacik | April 27, 2009, 6:27PM

As Treasury Secretary, Tim Geithner's public image has generally seemed "not quite ready for prime time." But his PR acumen as president of the New York Fed was in large part credited for landing him the job -- and now we know why. Geithner made one-on-one coffee dates, luncheons, tennis games, dinners and conference calls with reporters a major part of his job at the New York Fed, from the looks of the official schedule posted this morning by the New York Times. In addition to regular press briefings, backgrounders and whatever Geithner slipped in on his own time, Geithner scheduled one-on-one time for more than 68 journalists from 2007 to 2008, including twelve from the New York Times, ten from the Wall Street Journal and eight from the Financial Times. His favorite journalist by far appears to be Krishna Guha, an editorial page writer at the Financial Times, to whom he granted 12 interviews.

The Journal's Jon Hilsenrath and David Wessel, the FT's Gillian Tett and Chrystia Freedland and House of Cards author William Cohan also make a lot of appearances on Geithner's schedule, in addition to professional pundits Fareed Zakariah and Tom Friedman. What's particularly striking about Geithner's media schedule is how willing he seemed to be to speak individually with multiple reporters from the same media outlet: some days he would speak separately with three different FT journalists. As the Times has pointed out, Geithner wasn't necessarily satisfied with his press; the schedule shows three meetings with a publicist who represents Citigroup, and a few others with New York PR patriarch Howard Rubenstein.

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Topics: Tim Geithner

Tim Geithner

The New, Amended Case Against Tim "Magical Thinking" Geithner

Moe Tkacik | April 27, 2009, 1:34PM

On the face of it, the lengthy Tim Geithner profile in today's New York Times is not quite as unflattering as last Friday's cover story in Portfolio -- but it's pretty close. Both perpetuate a slightly altered narrative about the Treasury Secretary: where earlier hit jobs depicted Geithner as a limp-wristed bureaucrat who took marching orders from the plutocrats who appointed him to head the New York Fed, the latest stories further the notion of Geithner as precocious, fundamentally unprepared child -- a sort of Sarah Palin of Clinton-anointed technocrats. A structured finance expert accuses him of "magical thinking" in the Times; Portfolio quotes Mike Barnicle's "eyes of a shoplifter" observation. "Think Bambi looking into the headlights on an 18-wheeler," says one economist of Geithner's fumbling through a question-and-answer session in 2006. "People thought, 'Whoa, that's kind of out there,'" says comptroller of the currency John C. Dugan of a short-lived proposal Geithner advanced last June to guarantee all bank debt. Management expert Peter Cohan suggests Geithner is flailing because he isn't very "good at math."

Between the lines of both stories, tough, are some more tangibly problematic signs for Geithner's future in the post.

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Topics: Tim Geithner

Bailout

Congress To Probe Geithner's "Special Purpose" Plan To Skirt Pay Caps On Bankers

Moe Tkacik | April 7, 2009, 2:53PM

Yesterday we puzzled over the mixed messages we were hearing from Obama officials over the veracity of a Washington Post report that it was using Enron-style "special purpose vehicles" to undermine executive pay restrictions on bailed out banks: senior adviser David Axelrod sheepishly defended the strategy on one Sunday talk show, while Tim Geithner denied it altogether on another. But newly-promoted House Oversight Chairman Ed Towns is getting to the bottom of it, reports the Post today, in a story that sheds some much-needed light on the conflicting stories: the strategy began with the Treasury Department's $1 trillion consumer and business lending initiative, which is in part an expansion of the Federal Reserve's Term Asset-Backed Securities Loan Facility, which is open to the American subsidiaries of foreign banks, which Treasury presumably wants to participate in the programs without having to deal with the added diplomatic headache of subjecting foreign bankers to rules designed to satisfy American voters. Unsurprisingly, not everyone in Congress is opposed to that.

A senior House aide said he agreed with the Treasury's policy and that he believed a recent vote by the House on another piece of executive compensation legislation showed that Congress did not intend the restrictions to apply to firms that did not receive direct capital injections. The aide spoke on condition of anonymity because he was not authorized to comment.

Oversight sees things differently, however.

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Topics: Bailout, David Axelrod, Edolphus Towns, Oversight Committee, Tim Geithner

Tim Geithner

Is The White House Helping Bailed Out Banks Skirt Pay Caps? Depends What Channel You're Watching

Moe Tkacik | April 6, 2009, 3:22PM

On Saturday the Washington Post reported that the administration was doling out federal bailout money via "special purpose vehicles" to help banks skirt restrictions on the funds imposed by Congress -- including, naturally, limitations on executive pay. In a move a former Justice Department attorney equated to "money laundering," the story further specified that the White House had concluded that the conditions ought not to apply in "at least three out of five initiatives funded by the rescue package."

The story quoted Treasury spokesman Andrew Williams defending the strategy, and on Sunday senior Obama adviser David Axelrod, despite his reported distaste for Treasury's lenience on the banks, went on Fox News Sunday and towed the Treasury line when Chris Wallace brought up the report.

But a bit later the same morning on Face the Nation the policy seemed to have changed -- if you believed Treasury Secretary Tim Geithner's unequivocal denial to CBS's Bob Schieffer that any such plan compensation-restriction avoidance plan existed:

Transcripts after the jump:

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Topics: Bailout, David Axelrod, Tim Geithner

Sheila Bair

Bob Dole: Bank Nationalizer Sheila Bair Putting The"Compassion" Back In Conservativism

Moe Tkacik | March 27, 2009, 6:46PM

One of the great ironies of this financial crisis (and there are lots) is that the only financial regulator remotely capable of inspiring confidence in anyone is a Republican Bush appointee who's gone largely ignored by the White House since Tim Geithner reportedly tried to push her out of her job for not being enough of a "team player." We speak of course of FDIC Chairman Sheila Bair, who has gotten so much practice nationalizing financial institutions since the crisis began she let 60 Minutes come watch and record one for a segment earlier this month. And now she's been pushing for the authority to take her operation to the likes of AIG, Bear Stearns and the rest of the Too Big To Fail cartel. (And as finance blogger Felix Salmon explained in the New York Times today, she may get her wish as part of Geithner's public-private toxic asset buyout plan.)

On Wednesday Bair went on the hyperconservative supply-side pundit Larry Kudlow's CNBC show to sweetly explain why, when a company like AIG fails, she ought to be able to

come in, repudiate employment contracts, pick and choose who you want to keep, who you want to get rid of, what you want to pay them. Replace the management, get rid of the boards, bring in better management and do an orderly unwinding of the entity.

Kudlow seemed stunned. "You've done this before?" he asked. (About 50 times since the crisis began.) But he remained polite in the face of all this suspiciously socialist-sounding rhetoric -- because it came from a Republican. Her old mentor Bob Dole even confirmed it, an American Banker report today reveals...

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Topics: FDIC, Sheila Bair, Tim Geithner

CDR

Regulator Who Regrets "Silence" About Derivatives Told To Shut Up

Moe Tkacik | March 26, 2009, 2:55PM

Yesterday Christopher "Kit" Taylor, the former executive director of the Municipal Securities Rulemaking Board, became one of the few regulators to publicly apologize for his role in the crisis. Like many public officials, he worried for years about the explosion in the unregulated derivatives market, which he was in the unique position of seeing bankers pawn off on slightly less sophisticated investors than the usual hedge fund guys: school districts, park authorities, power companies and other local government entities. Today Detroit, Jefferson County, Alabama and various towns in California alone are out more than a billion dollars after investing in interest rate "swaptions" and other financial "products" that left them on the hook in a national conspiracy through which banks, lawyers, consultants and corrupt politicos bilked as much as $4 billion a year from state and local government coffers. But "the big firms, he told Bloomberg yesterday, "didn't want us touching derivatives...they said, 'Don't talk about it, Kit.'"

"Every time I talked to the board about swaps, I made it clear that the MSRB had no authority to take action," said Taylor, in an e-mail. "My 'regret' is that MSRB would not speak out loudly that swaps were going to cost taxpayers a bundle if issuers did not clearly understand what they were doing."

Perhaps as penance, Taylor has been a main source for most of the media coverage of municipal finance corruption, currently the subject of a federal probe, and his candor has been hailed by his former colleagues in financial regulation, oh wait not really.

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Topics: Bill Richardson, CDR, Christopher "Kit" Taylor, Muncipal bonds, Tim Geithner

Bailout

Bailout IG: "Who Knew What, When, And Why" On AIG Bonuses?

Zachary Roth | March 19, 2009, 1:06PM

Neil Barofsky, the special inspector general for the bailout, told Congress this morning that he'll probe the AIG bonuses -- including what role the Treasury Department played.

In words that may send a chill up Tim Geithner's spine with their invocation of Watergate, Barofsky, asked specifically by Republicans about the Treasury Secretary's role, said his probe would seek to find out "who knew what, when and why," in regard to the bonuses.

He continued:

Preliminary information we have seen indicates that the TARP contract between AIG and Treasury that was entered into back in November specifically contemplated the payment of bonuses and retention payments to AIG employees, including AIG's senior partners.

Barfosky added that he'd work with Justice Department, as well as the office of New York Attorney General Andrew Cuomo, who is probing the bonuses, to look at ways that the money can be returned to taxpayers.

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Topics: AIG, Bailout, Financial Crisis, Tim Geithner, Treasury Department, Wall Street

AIG

Warren: Is AIG Bailout Money Going To Pay Off "Speculators"?

Zachary Roth | March 11, 2009, 12:31PM

Looks like you can add Elizabeth Warren to the growing list of people who want the federal government to tell us more about that latest AIG bailout.

Warren, who chairs the panel that's monitoring bailout spending on behalf of Congress, went on MSNBC's Rachel Maddow Show last night, and all but demanded more disclosure from Treasury Secretary Tim Geithner.

Maddow raised the fact that AIG has reportedly passed bailout money onto its counterparties on those credit default swaps, and that it currently has four PR firms on its payroll. In response, Warren, appearing perhaps more frustrated than in any of her other numerous media appearances over the last few most, responded:

It doesn't seem strange to me, and the fact that it doesn't seem strange to me tells you something really awful about what it's been like to be in Washington for the last few months.

These financial institutions have figured out that they're bleeding red ink, and their best solution is to persuade the Treasury Department to give them lots of money. And when the Treasury Department starts to say, there may be some problems here, the American people don't want to go along with this, then lets see if we can spin the American people on it.

The Treasury Department has not asked for the critical information about where this money has gone, from AIG. We've poured the money into AIG, and it has somehow poured it out the other end. The Treasury Department has not asked, and has not revealed, what it is that's happening with that money.

And so as long as that's the case, maybe some of the money is going to other financial institutions. Maybe some of the money is going to pay off these credit default swaps that are essential for saving other institutions that have counted on it for credit and insurance. And maybe some of where this money is going is just off to speculators, who just played the game of speculation, and would now like to collect a hundred cents on the dollar form their speculations, and collect it indirectly from the American taxpayer.

You can see the video here. (The excerpt quoted above begins around the 9:00 mark.)

The Federal Reserve, which has been at the center of the latest AIG bailout, has declined to reveal much information about the maneuver, including the identity of AIG's counterparties, saying that doing so could affect confidence in the institutions at issue.

Reports by Warren's panel have grown increasingly critical of Treasury's level of transparency and accountability in regard to the bailout.

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Topics: AIG, Bailout, Elizabeth Warren, Federal Reserve, Financial Crisis, Tim Geithner, Treasury Department, Wall Street

Bailout

Obama: Nationalization "Wouldn't Make Sense"

Zachary Roth | February 10, 2009, 6:57PM

In the wake of Tim Geithner's speech this morning, laying out the Treasury's plan, such as it is, for Bailout 3.0, most smart observers have concluded that the Obama administration has at least left the door open for a possible nationalization of failed banks at some point, if it decides circumstances warrant that step.

But in an interview with ABC News' Nighline, set to air tonight, the president seemed to all but rule out that idea. He told ABC:

[Sweden"] took over the banks, nationalized them, got rid of the bad assets, resold the banks and a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem -- Sweden had like five banks," he said, laughing. "We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the, the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

True, Obama, like Geithner, has always seemed skeptical of nationalization. But his answer to ABC would appear to go further than he yet has in declaring that he'll avoid adopting any version of that approach.

Of course, things might look different once we get done with these "stress tests," and find out how many major banks are truly insolvent. But as of now, the president seems dead set against even short term nationalization.