Longtime Crisis Manager Pleases Wall Street, Mystifies Some Democrats

[Dover]

... As Mr. Geithner now prepares to take the helm at the Treasury Department, he faces a world financial system far from resilient, apparently resistant to policy responses, and where $100 billion is barely a down payment on the public monies thrown at today's problems.

At a time of crisis unmatched since the Great Depression, President-elect Barack Obama has put his faith in one of the world's most experienced financial crisis managers -- a man popular with the Wall Street leaders he's consulted with closely over the years, but a mystery to many traditional Democratic constituencies.

"He is a great choice," said Merrill Lynch & Co. Chief Executive Officer John Thain, who was considered a candidate for Treasury secretary if Republican Sen. John McCain had been elected. "This will be one of the most important jobs in the new administration as we get through this crisis, and Tim understands markets and policies better than almost anyone."

But Andy Stern, president of the Service Employees International Union, said recently: "I always worry about somebody who has spent his whole life at the Federal Reserve....I just don't know him."

//snip

Mr. Geithner, whose father worked for the U.S. government and the Ford Foundation, was raised in the U.S., Asia and Africa. After college, he worked for Henry Kissinger's consulting firm, then joined the Treasury Department in 1988. He was a key international aide to Treasury Secretary Robert Rubin, then to his successor, Lawrence Summers -- Mr. Geithner's chief rival to become Mr. Obama's Treasury secretary -- and played a role in bailouts of Mexico, Indonesia and South Korea, and also in the decision to allow Russia to default on its debts in 1998...cont'd

http://online.wsj.com/article/SB122731517445349785.html

[midnight]

1. I don't know enough about this money street to know if this

is helpful to our situation or not.

[Dover]

2. Well, his mentors enabled the current crisis through deregulation....

His lineage is "more-of-the-same gang", Rubin and Summers, et al. The wolves running the hen house.


Upon Rubin's retirement, President Clinton called him the "greatest secretary of the Treasury since Alexander Hamilton." "During his tenure as Treasury Secretary," Senator Chuck Hagel (R-NE) said, "Bob was an ideal public servant who put policy before politics." <6>

Critics credit Rubin with helping create the conditions for the Financial crisis of 2007–2008, as a result of the policies he pursued as Treasury Secretary. Together with then-Federal Reserve chairman Alan Greenspan, Rubin strongly opposed the regulation of derivatives, when such regulation was proposed by then-head of the Commodity Futures Trading Commission (CFTC), Brooksley Born. Overexposure to credit derivatives of mortgage-backed securities—and credit default swaps (Insurance on securities)(CDS)—was a key reason for the failure of US financial institutions Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group, and Washington Mutual in 2008.

Arthur Levitt Jr., a former chairman of the Securities and Exchange Commission, has said in explaining Mr Rubin's strong opposition to the regulations proposed by Ms Born that Mr. Greenspan and Rubin were "joined at the hip on this." "They were certainly very fiercely opposed to this and persuaded me that this would cause chaos."

According to the New York Times, "In November 1999, senior regulators—including Mr. Greenspan and Mr. Rubin—recommended that Congress permanently strip the CFTC of regulatory authority over derivatives." This advice was accepted and derivatives were kept clear of regulation by the CFTC.

Warren Buffett later called derivatives "financial weapons of mass destruction", and the lack of regulation of derivatives played a key role in the 2008 financial crisis.

Other competent critics of Rubin's philosophy and policies include Kevin Phillips.
Phillips is author of Bad Money, and was recently interviewed by Bill Moyers.
( Transcript - http://www.pbs.org/moyers/journal/09192008/transcript2.html )


http://en.wikipedia.org/wiki/Robert_Rubin

[dixiegrrrrl]

4. Verily, yea.

Summers is Robert rubin's protogee.
Rubin had huge hand in laying groundwork for the meltdown.
Also is Chairman of CFR.
I have posted on this twice recently, go to Wilipedia on all 3 names. Everything you need to know is there.

Lastly, if Kevin Phillips is critical of these choices, I would pay attention. Phillips is good, smart, knows what he is talking about.

[lonestarnot]

6. I was worried about a week ago when I heard of the first selections of people..

:scared:

[dixiegrrrrl]

7. yeah...that's why I put you on my buddy list..

anyone who gets it, ...gets it.
'course we get flamed for not being 10000 % supportive.

Me, I am reality based.

[Dover]

3. First they create the crisis and then they manage it...in their favor..n/t

[slipslidingaway]

5. Thanks n/t