My Tim Geithner Fantasy

More Clooney, less Costanza

OK, I'll admit it. I have fantasies about Tim Geithner. I describe them in the New York Observer, on the stands today.

I imagine that we are in a different world, a movie world. Instead of the George Costanza character we have before us, making excuses, we have George Clooney, channeling Jimmy Stewart. He smiles that Clooney smile and interrupts whichever grandstanding Republican or phony Democrat is trying to rip him a new one.

“Congressman,” he says, “I’m not going to sit here and make any more excuses. You know as well as I do that I’m no good at this. Not only can I not help homeowners, I can’t even sell my own house in Larchmont. The banks have me in their clutches to such an extent that I can’t go to the bathroom without asking for a hall pass. You know that I am no Alexander Hamilton. I’m not even a good imitation of Hank Paulson. Let me to put it to you another way: I quit.”

More on my Geithner daydream can be found here.

© 2010 Gary Weiss. All rights reserved.

David Brooks Misses the Point

David Brooks' New York Times op-ed column today on Tim Geithner (mentioning in the lead my Portfolio cover story) misses the point, I think.

The problem with Geithner's approach is not whether or not the banks are recovering because of the TARP program, but the degree to which the profits of the biggest banks have not been matched by a commensurate ability to lend.

Money is still tight. A couple of weeks ago, the Federal Reserve reported that banks "kept tightening lending standards for companies and consumers last quarter, reinforcing the central bank’s decision to leave its benchmark interest rates at record lows for a long time."

Simply put, the absence of a continued bank-caused financial crisis is not a reason to cheer. The public is justifiably upset that all those billions of dollars have made bankers richer without showing any benefits in terms of loosened lending policies. That's not an unreasonable expectation, and enough time has passed that people have a right to ask: what's in it for me? Why have we not seen any benefits to the population as a whole (apart from the banking system not falling apart) from the TARP program?

I don't believe that history will be kind to Geithner, or President Obama, if all he can show for his efforts, and our billions, is the absence of a crisis.

© 2009 Gary Weiss. All rights reserved.

Raising Bank Capital Levels is Not Enough

Treasury Secretary Tim Geithner proposed new international bank capital levels yesterday, and I argue in Portfolio.com that what he's doing is not enough.

You can read all about it here.

Yep, Portfolio.com. It's not widely known, but the online arm of the late, lamented Condé Nast Portfolio has been revived by American City Business Journals, a separate branch of the company that produced the magazine.

© 2009 Gary Weiss. All rights reserved.

Nepotism in the Geithner 'Beautiful People' Selection?

The beautiful Mr. Geithner

Joe Weisenthal has an amusing item today at Businessinsider suggesting that nepotism may be the reason for Tim Geithner (gulp) appearing on People magazine's list of 100 most beautiful people.

Geithner's brother David Geithner, is a People executive, having been at Time Warner (TWX) since 1992. This 1992 wedding announcement confirms they have the same father. And they look similar!

I'll admit that it looks suspicious. But my hunch is that it is a coincidence, given the church-state separation at Time Warner.

© 2009 Gary Weiss. All rights reserved.

Geithner Gets it Right on Credit Cards

Since my Portfolio story on Tim Geithner was not altogether favorable, I've been scratching around for something good to say about him. At last I've found it: Geithner today endorsed legislation in the House and Senate that would curtail unfair rate increases and fees.

When I described the menace of credit cards in a Parade Magazine article last August, the possibility of reform seemed remote. But with Obama in the White House and Democrats holding a nearly filibuster-proof majority, it seems that card reforms may finally be happening. Maybe. The banking lobby is going to fight hard to water down the card legislation. Stay tuned.



© 2009 Gary Weiss. All rights reserved.

Tim Geithner: the 'Typical Economist'

An AP story on Tim Geithner's shifty-eyed appearance at his first non-press conference says as follows:

"He comes across to me as a typical economist. He's not a huge personality. He's not really good at this," said Gilbert Coleman, president of an economic consulting firm in Reno, Nev.

That may be true. But as I've pointed out in the past, he's not an economist.

© 2009 Gary Weiss. All rights reserved.

Tim Geithner Shows His Inner Paulson

The market giving Tim Geithner a Bronx cheer

The New York Times this morning described how the Treasury's new bailout plan is shaping up to be a complete sellout to Wall Street, a kind of Paulson Lite with absolutely zero requirements for banks to lend and zero restrictions on executive pay.

And no, forcing banks to file "monthly reports" on what they're doing or not doing is not the same as forcing them to lend.

Kind of makes sense. The Washington Post reported today that Geithner walked away from the New York Fed with more than $500K in severance, unused vacation time and other goodies. I guess he'd have a hard time talking about stuff like executive comp with a straight face when he's getting a nice little golden parachute himself.

No, strike that. In his speech he did talk about executive comp with a straight face. He's just not going to do anything about it, according to the Times.

As for that swell gelt, the Post says:

According to an official at the New York Fed, Geithner's severance is from a supplementary retirement plan that would have begun paying out when Geithner turned 55. Geithner is 47, and the board decided to give him the cash equivalent, the official said.

How nice! Say, who is on that board anyway? Here is a link to a list of the members of the board of the New York Fed. Let's see... Jamie Dimon, Jeff Immelt.... some guy from Adirondack Trust ... some guy from Banco Popular. Steve Friedman of Stone Point Capital, the CEO of Pepsico. Well, I'm glad there's no conflict of interest involved, no one who could ever, possibly need the assistance of the Treasury for any reason whatsoever.

Am I being harsh? Maybe. But I am sorely disappointed with what I've seen so far from the Treasury. Sweet severance packages just don't make it seem any better.

According to the Post, by the way, new SEC chairman Mary Schapiro gets an even more magnificent chunk of change from FINRA. Kraft Foods and Duke Energy.

Maybe now Geithner can afford a competent accountant to prepare his tax returns. Schapiro, of course, now has "f. you" money, and I think we can confidently expect that unless she amazes all of us, she is going to give the finger to investors during her tenure.

The market sold off sharply while Tim Geithner was in the middle of his flat, vague, specifics-bereft and uninspiring televised presentation. I guess that makes it unanimous. You'd think that at least bank stocks would appreciate the unwarranted gift their shareholders are about to get from Uncle Sam, but that didn't happen either. Stocks like Citigroup led the selloff.

Why? Here's my guess: the market, like the rest of us, wanted something new, something different, some leadership, and didn't get it. We expected transparency, and instead we got zero details. As a matter of fact we (and that includes Obama himself) expected a press conference and we got a speech to Treasury employees.

UPDATE: Geithner appeared on CNBC later. More rhetoric, more evasions, and the words "complicated" and "difficult" used about two dozen times.

© 2009 Gary Weiss. All rights reserved.

Is Tim Geithner Too Close to Goldman Sachs?

That issue was raised in an interesting video today by Chris Whalen, who runs Institutional Risk Analytics and is not a fan of the New York Fed chief.

I think he has a good point, but I view Tim Geithner's appointment pretty much the same as Mary Schapiro's-- as a done deal. The difference between the two is that, while he is definitely closer to Wall Street than he should be, he does not have quite as abysmal a track record as Shapiro. Some will argue with me on that point, I know.

A few weeks ago Tom Friedman suggested that Geithner immediately replace Hank Paulson, and I agreed with him. But that was because pretty much anyone, or no one, would do an improvement over Paulson. But that doesn't make Whalen's concern any less valid, or Geithner's answers to the Senate's questions today any less mealy-mouthed.

Not that it matters, as it is fairly obvious that Geithner is going to be confirmed.

By the way, I see that Chris Cox has resigned from the SEC, as expected. Now he can move into a Washington lobbyist or some other job more suited to his talents and proclivities. He can leave government "service," but he can't escape history (as Abe Lincoln put it), and I believe that history will show him to be one of the worst SEC chairmen in history.

© 2009 Gary Weiss. All rights reserved.

Timothy Geithner the Economist

I'm intrigued by the number of times I see incoming Treasury secretary Timothy Geithner referred to as a practitioner of the dismal science. See Bill Kristol's column in the New York Times today:

Given that, one has to welcome the expected appointment to senior positions in the Obama administration of economists like Lawrence Summers, Timothy Geithner, Jason Furman, Peter Orszag, and Goolsbee himself. They’re sober and competent people who know we face a real crisis — and who, importantly, may be more willing than many of their colleagues to adjust their thinking early and often. [emphasis added}

Kristol's column is entitled "Admit We Don't Know," in reference to the size of the bailout package. I admit we don't, but at least we should know whether the guy who who'll be in charge of the bailouts is a friggin' economist. I mean, it was in my Geithner profile in Portfolio. That he isn't.

© 2008 Gary Weiss. All rights reserved.

Tim Geither for Treasury Secretary.... Now?

Yesterday Gail Collins had a column suggesting that the time has come for President Bush to step aside and Obama to take his place. Now, I've loved Gail's writing since her salad days at the Hartford Advocate, but I'm never sure to what extent she is serious (10%? 80%?). I was going to respond with a completely serious suggestion that Tim Geithner become Treasury secretary now. However, I see that Tom Friedman got there first.

I don't have much to add to Friedman's column, except to suggest that we all gaze again at this chart of the Dow's action on Friday.



Note how the market rallied at precisely 3 p,m., which was when Geithner's appointment first was announced on NBC. It was the usual crappy day in the market, beginning with a rally that fizzled, after two straight days of horror. Then the market got word that Geithner was named Treasury secretary and the market shot up.

I don't think the reason this happened has as much to do with Geithner as it does with the fact that the market wants something, anything, to indicate that someone is taking charge of this puking economy.

Clearly the markets have lost every shred of confidence in this administration and, in particular, this Treasury secretary. Replacing Bush right now is not a terrible idea, but it's not happening. Replacing Hank Paulson isn't happening either, but it is closer to being something other than a fantasy. The country needs a change in economic leadership. Now.

By the way, isn't this ironic? A former CEO of Goldman Sachs is unable to inspire Wall Street, while a lifelong bureaucrat and policy wonk is able to pull it off.

© 2008 Gary Weiss. All rights reserved.

The Market Loves Tim Geithner

Nobody ever knows for sure about such things, but I thought it was remarkable how the market reversed its losses and really took off after NBC reported that Tim Geithner was being named Treasury secretary.

He's an understandable choice: a low-key guy, experienced, with an international background. Just the sort of cabinet pick you might expect from no-drama-Obama. More on Geithner in my profile of the gent for Portfolio, here.

Note the strong connection between Geithner and another candidate for Treasury, Larry Summers.

And, by the way, contrary to an early report in the online Wall Street Journal, he is not an economist.

© 2008 Gary Weiss. All rights reserved.

Tim Geithner the non-Democrat

I've been reading with great interest talk that the New York Fed chief, Timothy Geithner, might become Treasury secretary under Barack Obama. Here's a Time article on the speculation, saying that "...Geithner, a Democrat, has experience at the Treasury."

That he does. However, the part about him being a Democrat is not correct. He is actually a registered independent, as I pointed out in my Portfolio article.

Not sure that really matters, but it needs to be pointed out, I think.

Obama gave what I thought was a cogent performance at his press conference today (at which Geithner was not present, which also may or may not matter). The media is picking apart his "mutt" and "seance" comments, ignoring that he is still showing tremendous powers of inspiration--which should, one hopes, calm the fears of the markets.

The stock market, nevertheless, went down during the press conference, which also may or may not have any significance. It did rally nicely afterwards.

© 2008 Gary Weiss. All rights reserved.

Tim Geithner and the Bear Stearns Bailout

My Condé Nast Portfolio profile of New York Fed chief Timothy Geithner is online today. Twill be appearing in the June issue, which is on the stands any day now.

© 2008 Gary Weiss. All rights reserved.