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Geithner's Gift To Goldman Sachs

By Big Tent Democrat, Section Obama Administration
Posted on Wed Jan 27, 2010 at 12:53:10 PM EST
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NYTimes:

Weeks after rescuing the American International Group with an $85 billion taxpayer loan in late 2008, Federal Reserve Board officials rejected a proposal that would have forced the insurer’s trading partners to return $30 billion in cash that they had received from A.I.G. in the preceding months. The Fed chose instead to let the banks keep the cash and to receive additional billions from taxpayers.

This decision was made, internal documents show, after two Fed governors expressed concern that such a plan might be “a gift” to the company’s trading partners, including Goldman Sachs and Société Générale, a major French bank.

(Emphasis supplied.) Treasury Secretary Tim Geithner should resign.

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    Geithner's Gift To Goldman Sachs | 28 comments (28 topical)

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    Everybody bought (5.00 / 5) (#3)
    by NYShooter on Wed Jan 27, 2010 at 01:23:03 PM EST
     into the scenario painted by Paulsen, Geithner, Summers, et al that the world would come to an end if we, the Taxpayers, didn't reach down, drain the Treasury, and our life's savings, and give it to the "Masters."

    They said that if we didn't give Blankfein, Dimon, Mack, and the rest of the alchemists everything we had, plus everything we would have for generations to come, terrible things would happen.

    They said banks would stop lending, millions would become unemployed, millions more would lose their homes, and our standard of living would nosedive.

    We should be grateful that President Obama and our Congressional Leaders had the wisdom to do the right thing so those awful predictions didn't come true.

    LOL... (none / 0) (#5)
    by kdog on Wed Jan 27, 2010 at 01:29:46 PM EST
    well played Shooter...well played:)

    Better raise taxes now so we're better prepared for the next time chicken little predicts sky-falling if we don't cough up the cashish...the interest payments are killin' us.

    Parent

    You can't (5.00 / 1) (#6)
    by NYShooter on Wed Jan 27, 2010 at 01:35:12 PM EST
    make this stuff up.

    Like Will Rogers said, "I just read the papers."

    Parent

    I bought into the notion of government (none / 0) (#17)
    by inclusiveheart on Wed Jan 27, 2010 at 03:17:09 PM EST
    intervention and stabilization, but that is a far cry from just handing over gobs of money with no strings attached and without regard for how it would be spent.  I expected to see restrictions on the kinds of deals that created the crisis in the first place at the very least attached to the terms of those "loans".  I can't walk into any of the banks that received bailout money and get away with a zero interest loan, no terms dictating how the money is to be spent and without any obligation to pay on a particular schedule outside of "when I have the money".

    That is what was most ridiculous about the bailout - the other ridiculous thing about the bailout is that the too-big-to-fails should have been broken up into pieces pretty much right after they were somewhat stabilized.

    Parent

    I'm with you... (none / 0) (#19)
    by NYShooter on Wed Jan 27, 2010 at 04:59:18 PM EST
    What I can't figure out is how everyone associated with this scam keeps repeating ad nauseum, almost verbatim, again and again, "We pulled us back from the precipice; the whole system would've collapsed!"

    Really? So what would've happened? Some deals, mergers wouldn't have been consummated, some financial chicanery/arbitrage would've only been able to be done with real capital, not leveraged 100:1 with borrowed money, the banks wouldn't have been able to take a free, taxpayer funded/guaranteed money ride in the carry trade, and the quants would've had to go back to the universities to work on formulae for smaller, more powerful hydrogen bombs. Any real lending could have, and eagerly would have, been picked up by the thousands of small and medium sized regional banks.

    They sold us a Bogey Man, much like in the Wizard of Oz, and we bought it hook, line, and sinker, much like a large mouth sea bass leaping at an expertly placed lure.  

    Parent

    The only way any of it would have (none / 0) (#13)
    by Militarytracy on Wed Jan 27, 2010 at 02:07:50 PM EST
    worked is if investors lost when certain entities were insolvent, and that meant federalizing the banks.....that is the only way any of it could have worked and the fed not drained completely dry and the economy still in a shambles with more shambles to come.  What was it that Obama said about not federalizing the banks? He didn't have the time to do that and stick to his aggressive agenda or some such adjective used ahead of his agenda.  It is all just so many horse pucky layers deep now.

    Parent
    I still haven't hired anyone to clean my (none / 0) (#14)
    by Militarytracy on Wed Jan 27, 2010 at 02:10:05 PM EST
    toilets yet though for minimum wage, I think I'll wait a few more months before I go there.  The job market ought to be ripe then for such things.  

    Parent
    You'll get college graduates (5.00 / 1) (#15)
    by Cream City on Wed Jan 27, 2010 at 03:02:31 PM EST
    going for the job.  It's just so awful for the new grads -- as of last year, still -- out there.  And other young ones.

    One of mine just got a fulltime offer where she has been working parttime -- but along with broken promises that this review would mean a raise and benefits.  And she has to drive 75 miles to the job, so the pay is not enough to move there yet, but she will have to keep forking over for the gas, giving up the driving time that could be for better job searching, etc.  And unless and until she gets a decent offer, another of mine, her spouse, still sits in a temp job that he did in college, waiting to see where they may live if they get good jobs.

    Oh, and the one who finally got the fulltime offer is the energy expert, but the stimulus funding still hasn't gotten into the field.  That's what she hears from many potential employers who want her but still are waiting, after a year, for Obama's promises of funding for the energy-efficiency, sustainable-environment industry.  

    Of course, we're told that two-thirds of the stimulus funding still is unspent.  And yet, we're now also told that the bill is $75 billion more than promised for the stimulus bill.

    Think that through.  Think that through. . . .

    Parent

    My family (5.00 / 2) (#21)
    by NYShooter on Wed Jan 27, 2010 at 05:22:10 PM EST
    is in the commercial maintenance business, so in the winter we always need part-time shovelers to clear the sidewalks and steps in the apartment/condo complexes we do. In the past we always had a hard time getting all the help we needed because the work is low pay, very strenuous, along with working in freezing weather and being available around the clock. Putting ads on Craigs List didn't bring many applicants, so we had to rely mostly on our regular, full-time, higher paid workers, and pay a lot of very expensive overtime.

    That was then,

    This is now:

    One ad......140 calls.

    It really is so heart breaking. You should hear the messages left on our answering machine, "Please call, laid off school teacher, three kids, will do anything!" and on, and on, and on. I should give the tape to CNN, and let them play it on the air, at prime time. 140 middle class, many highly educated, many heads of households, pleading for the hardest, lowliest paid work you could imagine. Every Government "Leader" should hear it so they never again go on the tube and tell us, "the recessions over," and what a great and brave thing they did by pouring trillions onto the banks in order to "save us from disaster."


    Parent

    So far as they're concerned (none / 0) (#24)
    by cal1942 on Wed Jan 27, 2010 at 08:27:46 PM EST
    we've been brought back from the precipice and the recesssion is over.  Case closed.

    They feel no urgency regarding unemployment.  As Obama said a couple of months ago 'we must be patient'

    I have to ask what do you mean 'we.'

    Tell that to ... hell, why bother.

    They 'hope' unemployment will drop before the midterms.

    The talk of the town is about the midterms.

    And the beat goes on.


    Parent

    In my view, everyone should clean toilets for hire (5.00 / 1) (#20)
    by DFLer on Wed Jan 27, 2010 at 05:04:26 PM EST
    at some point in their life. It is very grounding.

    Parent
    It certainly is honest work.... (none / 0) (#28)
    by kdog on Thu Jan 28, 2010 at 08:02:56 AM EST
    which is more than I can say for half of our paper-pusher based economy.

    Parent
    I thought the meme was federalizing (none / 0) (#22)
    by oculus on Wed Jan 27, 2010 at 05:52:38 PM EST
    the banks would cause of crisis of consumer confidence.

    Parent
    Resign? That Geithner got the job (5.00 / 5) (#4)
    by Cream City on Wed Jan 27, 2010 at 01:28:15 PM EST
    was a tell about Congress.  As was that he even was nominated.  That his tax idiocies did not prevent his nomination was an even worse tell about the Obama administration.  If they knew, it was arrogant at the least.  If they did not know, their vetting of nominations was incompetent.

    And Summers ought never have been hired, either.  Another giant tell to a lot of us, for a lot of reasons.

    From the time Obama (none / 0) (#25)
    by cal1942 on Wed Jan 27, 2010 at 08:37:41 PM EST
    announced it's been one tell right after another.  Enough people ignored all the tells during the primaries to put us where we are today.

    The tells since the election are absolutely no surprise given the tells in the primaries.  

    Geithner's, Summers' nominations weren't a sign of incompetent vetting they were a confirmation of what we learned in the primaries.

    Parent

    Obama should ask Geithner (5.00 / 1) (#16)
    by tworivers on Wed Jan 27, 2010 at 03:05:05 PM EST
    to "spend more time with his family"

    He won't though (none / 0) (#1)
    by jbindc on Wed Jan 27, 2010 at 01:03:56 PM EST
    That would be the administration making a mistake, and they can't or won't do that (especially right now).

    10-23-08 (none / 0) (#2)
    by Jlvngstn on Wed Jan 27, 2010 at 01:13:33 PM EST
    :)

    Parent
    Big Obama mistake (none / 0) (#10)
    by Militarytracy on Wed Jan 27, 2010 at 01:50:14 PM EST
    Not that that matters as we are on big mistake number what now?

    Parent
    He just might (none / 0) (#18)
    by star on Wed Jan 27, 2010 at 04:03:53 PM EST
    It looks like a great idea to fit into Obama's "Populist" agenda right now. There just might be some room for G under that BIG BUS!!


    Parent
    Geithner (none / 0) (#7)
    by CST on Wed Jan 27, 2010 at 01:38:29 PM EST
    Does feel like this admin's Rummy.

    With Economy = Iraq War.

    Hopefully they correct the problem sooner rather than later.  I hear Geithner is also not a fan of breaking up the banks.  Shocking...

    I go to war with the economy I have? (5.00 / 1) (#9)
    by jbindc on Wed Jan 27, 2010 at 01:48:04 PM EST


    Parent
    I've lost track (none / 0) (#8)
    by gyrfalcon on Wed Jan 27, 2010 at 01:44:23 PM EST
    Wasn't the AIG bailout from main Fed, not NY Fed?

    I think thats the idea... (5.00 / 0) (#12)
    by kdog on Wed Jan 27, 2010 at 01:57:04 PM EST
    confuse and fleece G-Falc...confuse and fleece.  

    It's not like we're allowed to keep track of the Fed or look at the books or anything...don't worry be happy, its all under control:)

    Parent

    The Fed (none / 0) (#11)
    by Big Tent Democrat on Wed Jan 27, 2010 at 01:52:14 PM EST
    includes the New York Fed.

    Parent
    I Can't Do it When People Watch (none / 0) (#23)
    by kidneystones on Wed Jan 27, 2010 at 06:08:51 PM EST
    Seems to be the Administration argument these days. The whole world was watching so we screwed up and couldn't quite manage the stream. (revenue, that is)

    Duncan Black is finally using the word 'catastrophic' to describe 10% unemployment which is one piece of welcome news. Of course, in Michigan and California 10% unemployment would be an extremely healthy step in the right direction.

    Throwing Tim under the bus might make sense to some people, but the mismanagement got the stamp of approval from the 'smartest president in the universe'. You know, the one who skipped undergraduate success of even the most minor note to magna cum laude Harvard Law and President of the Harvard Law review.

    We have a buffoon who may not have passed Econ 101 in charge of the US economy right now. We'll never know because President Oh So Smart doesn't want anyone to discover how just how stellar a job he does when he really applies himself, as he claims he did at Columbia.

    Those who elected President Catastrophe got some 'splanin to do on the question of due diligence.

    I'm currently, btw, in the middle of an interview process for a new job as adjunct faculty. My potential employer requires all candidates to provide copies of all of academic transcripts.

    If unemployment only remains at 10% this year will that count as jobs 'created or saved'?

    Tim Geithner should definitely resign ... (none / 0) (#26)
    by Meteor Blades on Thu Jan 28, 2010 at 01:54:08 AM EST
    ...but I doubt he will. And I doubt he'll be asked to until after the debacle in November, if that's what happens.

    WTFU, folks (none / 0) (#27)
    by SeeEmDee on Thu Jan 28, 2010 at 07:23:39 AM EST
    Geithner and his buddies are the power behind Obama. Mr. O got his job because he pimped himself to the Real Power in Chantilly,  Virginia June 6, 2008. That was the deal that installed O as Prez and Hillary as SecState.

    Progressives howled and gnashed their teeth when presented with Rethug 'kabuki', but when 'their' man Mr. O engages in it, they seem to be standing with an open-mouthed, bewildered look on their face. It's not supposed to happen! Mr. O was promising 'change'!

    But the same Oz-like 'curtain' that was concealing the room with the buttons and levers of power is still there, and it's now behind Mr. O. Any progressives who dare to look behind it will find the same crowd who was running Lil' Georgie with their hands on those same buttons and levers. The same crowd that started two wars and caused the meltdown of the economy. The same crowd that's been shafting the American people for years.

    So the only 'change' you wound up with was in your back pocket...and nowhere else. And these bloodsuckers want even that, too.

    Geithner's Gift To Goldman Sachs | 28 comments (28 topical)

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