Charlie Rose

GILLERAN  03/20/2009 09:09 PM Report

The underlying assets for most of these derivative transactions are consumer mortgages. In the cases where the underlying assets are not consumer mortgages, the underlying assets are businesses dependent on consumer spending.

Why invest taxpayer dollars in the intermediaries who have created this mess by building their businesses on transactions that just trade those consumer mortgages/consumer buying habits around the table in a large game of Bridge, rather than invest taxpayer dollars in the underlying assets - THE TAXPAYERS?

If you bail-out consumers, you've helped to strengthen the underlying assets that are supporting this financial house of cards. That's how you solve the financial crisis. If you support the banks, and consumers continue to default and defer spending, the only thing you've accomplished is to CREATE a financial black hole.

Why not target the root of the problem by GIVING THE MONEY TO THE PEOPLE!?

doodahdaze  03/15/2009 09:11 AM Report

WOW! Just heard about AIG rewarding their "superstars" with well over $100 million dollars of "stimulus money"... I don't know, but why do I feel like my doctor is holding a gun to my head! And INSISTING that I take my medicine, that he made for me (that ONLY he is COMPETENT ENOUGH to do) and he expects me to believe that, even though it's obvious the "medicine" is nothing more or less than cyanide. Why do I get that feeling?... Oh yeah! That's right, it's because I'm crazy.

doodahdaze  03/14/2009 10:20 AM Report

srchant, very intelligent comment (as is the majority at CR.com, including the infamous fartist formerly known as sock puppet). You're comment originally permeates the preconceived, and mostly irresponsibly thrown around, notions of the, idea and speaking points label of "liberalism". By using it as in opposition to the lazy "mainstream" press media "culture" misusage of such labels.

Also your comment takes into account, the real nature of humans, in that, there is a priority of behavior that precedes belief that supersedes, what turns out to be ego driven, superficial memory... So, to answer your questions.

A. Yes, greed and responsibity are compatible, IF, guided by moral or ethical (take your pick) INTELLECT.

B. We will have government intervention until, society conciously determines the "intervention" is holding them back; which will mean the "recovery" will be well into it's way... How that will take shape?. Only Nostrildomis knows. So if you know someone with big nostrils, ask them if you can take a look inside.

srchant  03/14/2009 04:43 AM Report

By reading previous comments, I find curious how people is judged in public appearances; we are expected to behave with the infallibility of a movie star (even though what we see in a movie is the final take). We are not allowed to hesitate, we cannot afford to be mocked, otherwise anything else we say will not be taken seriously.

Why are appearances more important than the truth?

As for the interview, I am hearing that the government is planning better controls to prevent the events that caused this recession. On the one side, we have had liberalism for several years, and now we need government intervention.

What is clear, is that the systems in the world are bound by the imperfection of their creators -us- and can work properly only if we want them to. For this to happen, there has to be RESPONSIBILITY, be it on the extreme of liberalism or interventionism.

Two final thoughts:

A) Are greed and responsibility compatible?

B) How long will we have government intervention?

buckwuz  03/13/2009 09:14 PM Report

seems like a smart guy but he's simply terrible with his communication skills. not one straight answer, charlie - you should have pressed him more. as a public official in a highly visible role, BOTH intellect and good communication skills are needed. he may have the intellect but definitely sucks at communication.

still, he seems to be better than the criminals in wall street firms, mortgage companies, aig, banks, cnbc "journalists" and politicians (i'm sure there were pols involved) that caused this.

tartufe  03/13/2009 07:18 PM Report

Watch the Jon Daly show where he takes on CNBC financial reporting and Jim Cramer.

http://www.thedailyshow.com/

cpklapper_at_work  03/13/2009 05:48 PM Report

Geithner has completely missed the boat. To see an inexpensive solution to the mortgage crisis, go to http://johnsonvillepress.com/wordpress/?p=146 .

1. The so-called "toxic assets" can be converted into "non-toxic assets" so that most losses are paper losses which can be ridden out and those losses which must be taken are fairly distributed with default minimized. This is how we can stabilize the real estate markets.

2. The big banks SHOULD BE ALLOWED TO FAIL. Every single Wall Street firm began as a small start-up. Several small firms stand ready to take their place if the government would stop propping them up.

3. The banking, i.e. judicial, functions need to be moved to a federal judicial bank. "Investment bank" is an oxymoron. The existing investment banks, relieved of their banking capabilities, should become strictly investment firms whose success or failure is irrelevant to the continued operation of the credit market.

mendyamen  03/13/2009 12:32 AM Report

Geithner is an exasperating TWIRP...how could Obama score such a blatant miss??

Moionfire  03/12/2009 10:21 PM Report

Charlie has been pretty well behaved in this interview. He actually let Geithner speak!!!

tartufe  03/12/2009 09:22 PM Report

doobeinadaze: huh?

tartufe  03/12/2009 09:19 PM Report

Charlie is constrained by natural laws - of human nature. Too piercing queries and the word would spread like wild fire. "CR burned so-and-so (fill in the blank)__________ a new last night. I'll never agree to that kind of exposure."

In fact it should be no surprise if at a minimum a general tenor or the actual Qs are shown, discussed somewhat before the introductory salvo.

Between-the-lines of necessity (to get any lines at all) is left to us. Pogo, recognized it early on.

MB6  03/12/2009 07:03 PM Report

I think Charlie missed an important opportunity to ask Geithner about the damage caused by dissolving the Glass Steagall Act. I'm surprised the topic did not come up, particularly when Geithner described (sort of) his knowledge about the threat of a meltdown. He seemed to suggest that he could not have known because "most people missed this", yet he also seemed to say that he worked 5 years in preparation "to be better able to withstand the kind of pressures that would come when this came apart." So did he know a crash was coming, or did he not? I take it to mean that he did, and he knew for a long length of time. And since so few other people were aware of it, he seems to have already worked in futility for 5 years by not succeeding in fixing it but succeeding in keeping quiet about the level of developing crisis.

Also, he used his work experience at Treasury with Rubin and Summers as evidence of his qualifications to clean up the current mess, yet he described that time as a fantastic economic environment without acknowledging that the 90's too were a bubble that also crashed. Charlie didn't ask him about that bubble either but instead let the conversation ride with a trophy about the fantastic '90s (which were not such a fantastic economy for all Americans).

So I see why Geithner is so likable--he's a very nice, very smart guy. But he's as steeped in the bad practices that created this mess as anyone else in the industry. I want him to succeed but just because he knows where the bodies are buried, doesn't means he's going to be successful in cleaning it up. He seems to have a lot of incentive to provide cover for very powerful players who created the crisis (through policy as well as the direct actions of speculators).

He's nice, I like him. My country hangs in the balance. But I feel this is not quite right. I'm "hopeful" but very worried. I wish Charlie had asked harder questions.

doodahdaze  03/12/2009 04:16 PM Report

That's O.K. tartufe, you can poop on my post.

You have a bigger vocabulary than I. But I can say more with less. <smile>

tartufe  03/12/2009 04:05 PM Report

Spot on man of peace and freedom. He's tainted. The Summers, Rubin, Paulson, Bernanke et al implanted ideology is too entrenched.

Don't know this but, my gut feeling is the big banks and hedge funds are all bloated with gimmicky assets cum liabilities to the point that the net liability between them is now indeterminable (possibly forever - further confused by internecine law suits). Unfortunately doubtless exported on the faux-security hobby horse of Credit Default Swaps. In short the tangled web they have weaved has indeed deceived - themselves among the herd.

Since their excision is what a sane doctor would order, their purge from the financial system is the needed prognosis and operation.

But, alas, as you point out the contagion has been spread to the surgeons currently in the ER. Survival from the resultant pandemic is a real quandary, despite O's assurances. The gangrenous pustules (big banks) will continue to defile the healthy financial body (banks that avoided the siren calls of a fast buck).

doodahdaze  03/12/2009 04:02 PM Report

mopepom, you just took the words right out of my brain. Maybe the good social engineers will collaborate with the good, nano-genetic engineers and figure out a way to lobotomize the befuddled, directionless masses to work for free and stop littering, so the unicorn can take a break and enjoy the sunshine.

mopepom  03/12/2009 03:35 PM Report

Mr. Geithner claims that the brilliance and scope of the Obama "big bang" solution will succeed in restoring the world to financial stability and economic sustainability.

He rejects totally the notion of doing critical things first and then proceeding in an orderly manner to deal with the other issues of education, health care, infrastructure, energy dependence and climate change.

He obviously believes in miracles and his last resort is to accept and trust the Will of the President, to "do whatever is necessary".

The U.S.A. is in deep, deep trouble if the only hope is to mortgage future generations and to reward the guilty.

ShalomFreedman  03/12/2009 03:39 AM Report

Geitner does not come on strong. He comes on as a bit hesitant but nonetheless quietly informed and determined. He does not dazzle us with numbers or specific predictions, but does a bit of evasion. His general line is one of confidence in the American economy and its ability to come out of this crisis, and go forward.

Many comment negatively on his appearance here perhaps because they know he was part of the Establishment when the Meltdown was being cooked.

tartufe  03/12/2009 02:16 AM Report

Spot on Vanron100. Somebody of significance needs to go to jail. (Madoff needs company.) A culture that tolerates the flagrant abuse and raping of it’s most critical system deserves whatever chaos that indulgence creates. Osama bin Laden is ashamed he didn’t just hire guys like Bobby Rubin et al instead of the 19 mostly Saudi ineffectuals (by comparison). Helluva lot more efficient. And world-wide. Benedict Arnold, bin Laden, Paulson, Bernanke, Greenspan, enabling political hacks are all culpable. All too clever by fractions. And Geithner adds to it by blaming the victims. Paulson not even an honorable mention and he pulled the biggest heist in history with three sheets of paper to just give $100s of billions to the big banks which didn’t lend a dime. A reverse bank robbery. Outright taxpayer hijacking, however.

Obama will fall from grace on the financial and Pakistan issues. The financial and M-I oligarchs have bought him heart and soul. Bobby Rubin, Summers, Citigroup et al, Raytheon et al have divided his soul into securitized tranches and salted them away for a "payoff" day. Citigroup contributed mightily to his campaign coffers. Citi - one of the biggest pigs at the subprime trough - will slopped and slopped as much as they demand. Geithner, Summers, Bernanke, and Obama will see to it. Which is pathetic. Citi is evil and a confiscatory predator that the world would be better off without. Alas, were it so that this is slanderous and libelous. It is not.

RONN  03/12/2009 12:59 AM Report

this economic system with it's retarded stock market is the biggest scam of the Human civilization but you Americans are so gullible to buy into all of them... go and put more fruit of your labor into stock market to be eaten by these fat cats....

carlottalein  03/11/2009 11:43 PM Report

That's a tough call....who do we HATE more, the bankers or the shareholders, and don't say the ones that overlap.

In Germany in December there was wide coverage of the terrifying friendship and mentorship Geithner had with John Thain, the French commode guy, who assigned himself an extra bonus of 10 million, and then they followed it up with his superiors nixing that...which doesn't matter because he still had a nestegg of tens of millions of dollars THAT WE KNOW ABOUT. If we insisted that all these greed hogs pay their taxes we could apply that to the bailouts and still have something left over.

The next day there were headlines about the insanely greedy Thain, explaining that he didn't get the bonus...but don't bet on it. The Germans are thorough but transparency is limited after all.

jbjbjb  03/11/2009 11:17 PM Report

White American men raised in the 1940 and 50s to think that every woman was here to serve them--secretaries, wives, mistresses, mothers, sisters--then had to adapt to Women's Lib and now a Black man above them!! They have taken their revenge. At least in 10 years they will all be dead or impotent...if they aren't already.

vanron100  03/11/2009 10:32 PM Report

I understand everyone wanting us to buy more stock in order to keep the market up...fix the system...then we'll have 'confidence' to invest.

And that FIX is simple and oblivious, but everyone seems not to be addressing it directly...

- it's 'Corruption-Corruption-Corruption'.

ie. special interest groups, earmarks, lobbyist, elimination of rules and regulations, the financial sector having contributed over $5.2B to political campaigns, same people (Geithner for one) who got us in this mess are now tying to get us out (humanly impossible...they will, and have instead spent most of the time & money trying to cover up the industry's underlining behavior).

Corruption is the 'root' problem here...as it is everywhere. Until that gets fixed first...everything else is redundant...we're just pouring $$$ into the abyss!

Fix the 'corruption' - then we'll have 'confidence'.

Shaft  03/11/2009 08:00 PM Report

Thank you Mr. Rose, for bringing thee man we all trust in. I feel very optimistic about the economic recovery plan, it seems Secretary Geithner knows what he is doing. I like the answer he gave to why he has so much confidence that we will make it back up? The need for overhauling of the financial system is necessary to say the least, all in all I am very happy to hear what I heard.

Jhalgren  03/11/2009 06:59 PM Report

The interview with Secretary Geithner was a sham and a journalistic disgrace, including the fact that Mr. Geithner had a receiver ear-phone placed behind his left ear during the interview so obviously he was getting prompts to avoid actually saying something sane! Poor Charlie--how can you sleep at night knowing how poorly you served your loyal viewers? Pandering to the rich, powerful will not save your hide. Do us a favor and, perhaps, finally decide if you want to be a journalist or Gatsby. Just which role do you desire?

Ricardo_Amaral  03/11/2009 06:47 PM Report

Reply to doodahdaze

You said: “I just had an epiphany, if the Mr. Rose show could have his most distinguished, economic panel guests (Rubini, ROBERT JOHNSON, Krugman, etc., and 1 or 2 of the top economic journalists) conduct a series of interviews of the U.S. Treasury Secretary, with Mr. Rose moderating. That would EDUCATE, the American populace very thoroughly.”

I would add two more economists to this panel: Joseph Stiglitz, and Stephen Roach from Morgan Stanley Asia.

.

REMant  03/11/2009 05:11 PM Report

As Kinsley remarked succinctly here a while back, we are being told on the one hand that too much spending got us into this mess, and, on the other, that more spending will get us out. We got a doses of both last night, and another from the president today, and I can't help thinking this interview was granted solely to counter the growing feeling that the large NY banks and others heavily involved in this mess should either be put into receivership and reorganized, or let go, to which prevailing opinion has tied the stock mkt's fall last week.

I have tried in the past to identify the reasons for this doublethink. One is they conflate personal gain with economic efficiency or social utility; 2. they confuse prices with wealth; 3. they confuse credit with saving; and, 4. they confuse enthusiasm with productivity. There is no way any of these can be true.

For instance, banks DO NOT as Geithner said take the savings of Americans and lend them. What savings! The banks lend many times what they have in deposits, credit they mfr out of thin air or, if you wish, thin paper. That is what caused this problem in the first place. He seems to know that, when he spoke about over-leveraging. But how is more of it going to get us out of it? In the Depression they took it for what it was at least, but, nevertheless, touted it as a solution when FDR took the US off the gold standard, tho for all practical purposes the nation had been off it since 1913 when the Fed was created, and local bankers had been on an inflation binge ever since Jackson delivered control of banking into their hands. Inflation was rampant during the Civil War, when Greenbacks began being issued, and this was picked up on in 1933 as the solution for unemployment, and by many ppl who ought to have known better, such as LaFollette and the Progressives, who had championed the creation of the Fed. The plain fact is that too much credit is what has caused every recession and depression. In the 1890's it was too much gold; in the 1920's it was too much of Europe's money over here; in the 1980's it was overinvestment in Japan; in the 1990's overinvestment in tech here. To say that no one saw this situation coming when rates were set at nearly 0, China was scarfing up $1 trillion in bonds to subsidize exports, and billions were being spent in the Middle East, is ludicrous. No one wanted to see it coming. But it was a obvious as the nose on your face.

A program such as has been proposed will almost certainly fall on its face, as it has so far, but if it does not it will certainly succeed in lining the pockets of those very ppl who richly benefited from making and receiving these bad loans at the expense of everyone else. Those ppl, of course, desperately want this to happen. But it will affect nearly no one else if those investors go belly up. National wealth is not being lost by deflation of the assets, it is only being lost by fat cats. The loss will only be of a vast Ponzi operation no different from Bernie Madoff's. Inflation shifts wealth during booms caused by it to those who can corral assets and commodities. These only have value if there is production to use them, of course, so it is necessary to get ppl working so that the operation will pay off. But it is not you they are concerned about now, it is the value of their assets in relation to your labor. And if these institutions are able to pay back any govt loans, etc made to them, it will be in re-inflated dollars, which you will have paid for twice, initially, and then again for the bailout, because the value was lost not by some sudden collapse of confidence, but by plain mismanagement and bad investment. Some of the same ppl would argue that sharing the blame is only fair, since we are all in this, and the rising boom tide lifted all boats. They'd call it insurance. It is what Japan believed and what Bernanke boosts. (It seems still to be what Charlie believes - unbelievably at this juncture.) But no one who has looked at the disparity in income and wealth in this country over the past decade or two can be serious about this argument. In any case, if we can all share in inflation, we can just as well all share in deflation, which is certainly better.

The only reason I can see for those banks to be hanging onto their funds is because they expect bankruptcy and want to see their shareholders taken care of, and because they have had the responsibility of seeing to their depositors lifted from them by still more insurance.

Now let me relate a little more history that occurred at the founding of our country. Not having any money to pay the Continental soldiers, who fought for independence, the Congress issued IOUs to them. Because no one would pay taxes after the war was over, the soldiers were forced to sell these to speculators at cents on the dollar. The speculators then used the contract clause to get these fully funded after the Constitution was ratified, and Hamilton's bank created. Some historians have argued that this was in fact the main reason why the Constitution was ratified. No matter whether it weas or not, the veterans never saw their pay, and the speculators got it. Messrs Buffett and Geithner seem to have something of the same in mind for the mortgages. The only way the average Joe today is going to see his labor pay is if artifically high asset prices come down, or the govt goes in and abrogates some contracts made under false pretenses, or if we tax the hell out capital gains, etc, and use it to benefit the poor, something that goes by the name of welfare capitalism, was started by Bismarck to stave off revolution, and forms the program of Social Democratic parties. But the only way to ensure that deflation occurs is to leave the financial system alone, and see to it that banks, from the Fed on down, are no longer able to manufacture credit. Frankly, I've become convinced that we are really being offered the same deal that Bismarck offered, and the Progressives here - inflation for welfare - which not only is no reform at all, but leads to stagnation as LBJ's successors discovered. If they really mean to reform, then let it begin right now with the fractional reserve requirement.

To clarify a point, Geithner hinted at restoring the strong dollar policy during the Clinton admin, and was not, presumably, lauding its record on deregulation, but the 90's were only economically successful because Greenspan persuaded Clinton to balance the budget, foreign investors pulled out of Japan and into the US in part due to high interest rates and, in part to the progress in IT, and China began feeding us stuff at bargain basement prices. But it was temporary, unbalanced growth and no one should want to go back to that time even if it were possible.

doodahdaze  03/11/2009 05:05 PM Report

I don't know, fartufe.? I try to make sense of your words, but it's like laughing at the guy in the asylum, who hangs his head out the window and recites Shakespeare from a roll of toilet paper/scroll.

tartufe  03/11/2009 03:50 PM Report

Or tax holiday. Tax holiyears. Geithner's an expert here. He should understand, sympathize and empathize.

Many cabinet members know the repugnance of paying taxes. The whole bailout system and China's faith in our Treasury Bill's is based on our income tax system, which our illustrious leaders studiously avoid - including

Geithner himself. It was an honest mistake. Ask him.

We should all be afflicted with that elite desease known as it-was-an-honest-mistake syndrome.

Without the opiate of our tax monies (thus moral hazards become obsolete) integrity may be the only fall-back position for the financial oligarchs to compete on. Imagine, banks that loan based on reasonable multiples of prime, with no concern of leverage, no flippin your and your neighbors mortgage for a quick profit. Jimmie Stewart vs Mr. Potter(?) la la land idealism beyond the reach of our grasping for more-than-enough, duplicitous predatory system.

Copulate them all but six. Save them for pall bearers.

tartufe  03/11/2009 03:18 PM Report

Anarchy anyone? Everyone?

IRISH  03/11/2009 03:08 PM Report

As a citizen of a country north of the border, there is considerable realization that super-capitalism operating in the wild west frontier ethic pervading Wall Street and corporate board rooms has lead to this recession and infected the world. The re-set will need to be revolutionary and a return to corporate boards governance all important.

doodahdaze  03/11/2009 01:45 PM Report

I just had an epiphany, if the Mr. Rose show could have his most distinguished, economic panel guests (Rubini, ROBERT JOHNSON, Krugman, etc., and 1 or 2 of the top economic journalists) conduct a series of interviews of the U.S. Treasury Secretary, with Mr. Rose moderating. That would EDUCATE, the American populace very thoroughly. And would blow-away Charlie Rose's competitors completely.

dirklatex  03/11/2009 01:02 PM Report

American citizens have had 225+ years of song and dance from political leaders and this interview was no different. It's about time that these public servants realize that Americans are not as dumb as they think we are. By now we know when someone is trying to skirt the issues and feed us a line of bull. Is Evasive Responses 101 now part of a college program that economists study to sidestep direct questions? I can see what Geithner learned when he worked for Larry Summers, another song and dance man. Even when Charlie interrupted Geithner with the repeated question "Are these banks too big to fail?" Geithner plowed through with whatever pat answer he'd been trained to give. Charlie Rose may as well have been interviewing a White House Press Secretary given the amount of substantive information we viewers got out of this interview.

A few weeks back President Obama told us in a press interview that Geithner would be forthcoming on details of the stimulous package. When Geithner was interviewed by the press he said details would be released in a few weeks. Here he is now on Charlie Rose's program - it's been a few weeks and still no details, just shovelfuls of empty platitudes.

Americans were fleeced once in this crisis as investors, as anyone with an existing 401k retirement portfolio will tell you; now we're being fleeced again as taxpayers. Pick my pocket once, shame on you. Pick my pocket twice.... Does anyone really believe that banks will pay back these injections of capital when - and if - they get back on their feet? No wonder American citizens have no confidence in the economic system right now. They know that somewhere out there the money that's disappeared down this giant sinkhole has wound up lining the pockets of CEOs - there have been a few who've added a couple billion dolars to their bank balances. And when Geithner goes on autopilot to mouth vapid responses to pointed questions, he doesn't help restore any faith in the idea that anyone - not even the "experts" - knows what's going on or how to fix the problem.

doodahdaze  03/11/2009 01:00 PM Report

After watching this on TV, I thought I'd come here and say something original. But, Educateus @ 1:08AM beat me to it. I don't know about the Fed keeping rates too low for too long?. But the rest of Educateus's comment is right on. Especially the part of calling for the resignations of the top CEOs. Not because they profited so much. But because they clearly failed and SHOULD BE going out of business. Like Geitner said, the INSTITUTIONS should be kept going as frugally as possible. Which is another big question, just how big and cancerous are these toxic assets, derivatives, perverse incentives, moral hazards, etc.... The good Secretary didn't REALLY address those issues in this interview... But firing the fat-headed, free-loading, conniving PIGS! would go a long way to addressing those issues and REALLY restoring confidence. But that might not be politically possible, since that would be biting the hand that feeds them. And how can they look out for the best interests of the tax payers if they're not being fed properly?

pxlpark  03/11/2009 12:33 PM Report

... and yes I to could not stop being distracted by the set and lighting. At one point in this canned pitch from Geitner, I started to wonder if that was even indeed Charlie Rose, and not some Mechanical Turk that just looked like Charlie, stuffed in a closet under the Whitehouse stair cellar with the rest of the 80's furniture.

pxlpark  03/11/2009 12:17 PM Report

@tartufe with regards to Citigroup, it would not surprise at all if the books are baked, in as much as I have seen first hand at Viacom and other companies, that there is very little effective infrastructure to track P/L numbers properly.

I have also seen time and time again, that this sort of infrastructure is something that often gets neglected, or endlessly deferred by way of red tape, by many because they could not and cannot handle the real reporting, and the SEC trusts their accounting firms, allowing what are visibly minor infractions, that only incur easily payable, slaps on the wrist.

It is a system that I have been questioning for 10 years - after predicting then witnessing first hand the dot.com bubble fall through the floor to the same effect - that works somewhat invisibly until someone hits the stop button, and everyone has to show their cards.

Again, I can't help but feel this whole current dog and pony show, is only to show foreign debt owners that we will not let their investments tank, even if it means bankrupting every citizen and state of the country.

It also leads me to think that either Pres. Obama is either in on it, or he is not getting the big picture facts, which are typically obfuscated by finance teams when the news is bad.

And what of the next wave? The credit crisis? Buffet thinks we are currently at the cliff, but the credit crisis is the abyss, and will hit even harder, as there are no homes to recoup anything from, and not even property to recoup when families are living hand to mouth on their credit cards, feeding their families to the tune of with 30% interest or higher.

trevorfairweather  03/11/2009 10:40 AM Report

...and then they stood up and used the air hockey table for its original purpose.

thepaki  03/11/2009 04:40 AM Report

I am so disappointed with you Charlie -- this was a total soft-ball, puff piece interview. Even so, I thought Tim Geithner was even more evasive and overly general than normal. Judging by his body language, he was lying through his teeth.

TC_  03/11/2009 04:13 AM Report

A PR op, I mean interview, worthy of satire:

"Citizens are gone. They are now vassals. It happened in a funny way. All the banks around the world collapsed, broke. So the peoples’ money was used to refund all the banks. But don’t get any ideas. When the people buy the banks, do they not own them? Yes and no, but mostly and decisively no. You see, the people may properly own the banks (having bought them) but they sure as hell do not get to decide what to do with the money or how to do it. For that is not capitalism, and capitalism is what they bought. Clear? Clever? Clout. In capitalism, the people do not own the decisions. They are not the deciders. They are the consumers, the workers, and in a pinch they may be the funders. To review, the people may be the buyers and in theory the owners, but they are never ever upon any circumstances the deciders. In capitalism, the well-connected few are the deciders, the rulers who select candidates for office, who dole out funds for the campaigns, who provide the illusion of choice via sundry discrepancies for vassals to obsess over and pick between. Nothing more is meant to be.

"Am I speaking over your heads, dear vassals? Let me see if I can put this in plainer words. The privileged few rule, the masses obey, even when the masses do most of the work, buy most of the stuff, and totally bailout the bankrupt rulers." ...

http://apragmaticpolicy.wordpress.com/the-vassals-handbook/

Gills  03/11/2009 04:02 AM Report

"Most people didn't see this coming"

You know who saw this coming? Bank Loan Officers. If anyone had bothered to ask them, most would have acknowledged the decline in underwriting standards. If anyone had then bothered to ask "Then why are you issuing these loans" most would have cited fear of losing market share. But Mr. Geithner was too busy "strengthening the system" to bother, so he didn't see it coming.

tartufe  03/11/2009 03:06 AM Report

More - Citigroup rushed (too eagerly) to declare profits for Jan and Feb. Why am I skeptical? Surely these pillars of integrity wouldn't cook their books. Or is it creative bookkeeping? With unemployment soaring and people unable to pay their debts - credit card, mortgages on and on, it seems - well - phenomenal and even surreal. I wonder if GE would loan me some money to buy Citi stock?

carmos  03/11/2009 03:03 AM Report

ok,whats up with the table they are using for the Timothy Geithner interveiw ? looks straight out of a lunch room.

tartufe  03/11/2009 02:57 AM Report

More examples of how sick our system is. GE at once epitomizes and disappoints re USA type capitalism. Producing saleable, even useful - imagine, products wasn't enough for the bottom-line quarter-at-a-time possessed CEOs of our age. They had to dilute physical production with financial gimcrack production, and joined the short-cut scammers a la Citigroup et al.

Can any of the flying public take comfort in traveling in an airplane powered by engines built by a company with a corporate mindset of corner-cutting to bottom-line enhancement by OVER indulging in sleazy financial instruments?

If, say, leaving out a heat-resistant safety plate in their engines would enhance the bottom line margin even a half per cent, how do you think they would decide?

GE, Citigroup et al the egregiously greedy financial maggot's stock prices are settling in the poetic moral low-ground where the natural laws of equity and decency dictate.

Citigroup and the other big banks and hedge funds need to be given free rein or even pushed to fail. If, as some have forecast, five years of pain is in the offing anyway, why keep the predatory maggots infesting the lesser thugs?

Appropriate investigations, arrests and proportional fines and incarceration would be encouraging and a sign we're finally getting it right. But fat chance.

tartufe  03/11/2009 02:37 AM Report

Myth 1: Part of Expectations overrunning Policy is presuming (expecting) that significant demand for credit exists - supply be damned. Credit and its misuse (levered leverage releveraged) caused the problem to begin with. A cooling of demand is natural, warranted and in the long term healthy. Time to save not borrow. For geithner et al to keep beating the drum for an (unnatural) resurgence in demand for credit is useless to counterproductive to long term recovery.

Myth 2: Geithner on one hand called for individual responsibility by lenders and borrowers alike. (Nevermind that the lenders were well educated relative to too many of the borrowers.) On the other he stated that the system wasn’t designed to handle a melt-down of this magnitude, and disingenuously claimed no one saw it coming. Which is it, too big for the system to handle or too small to detect? Forked tongues have it both ways.

Myth 3: Too big to fail? The failure was allowing them to get so big in the first place. Sandy Weill of Citigroup was instrumental in starting the trend with his zeal for growth. He and Bobby Rubin et al complicit with select political hacks engineered the repeal of Glass-Steagall (1999) allowing the conflation of regular banking and mortgage lending. Overriding states usury laws, followed by stricter bankruptcy laws for health and unemployment reasons, credit card rate increases for ANY delayed payment etc came later. The so-called “Securitization” (an oxymoron) was enabled as far back as 1970. The system that failed was not designed 40 years ago. Duplicitous political hacks were always anxious to assist and prove their venality.

Myth 3 cont’d: The 50 largest banks are doubtless impaled on their own leveraged petards to the point that the extent of their liability is indeterminable. They’re interlocked with each other with gimmicky financial instruments (Securitized Debt Obligaations - sold and resold - quasi-insured with Credit Default Swaps, sold and resold, faux-insured and re-faux insured.) PBS Newshour revealed many banks could not produce the original mortgage. It’s an intractable mess that screams, “LET THEM FAIL AND THEN SORT IT OUT!” If impossible the skinning will be on the right hides.

Myth 3 - more: Geithner said there are 9,000 banks. Letting the 50 largest duly belly up might cause disruptions, but if we’re in a five year recovery ANYWAY (as some predict), confidence and the system will be better served without the 50 and their attendant wise-guys. Surely the remaining 8,950 can evolve a system of integrity with appropriate regulation.

Myth 3 - lastly and fatuously: Somebody of significance needs to go to jail. (Madoff needs company.) A culture that tolerates the flagrant abuse and raping of it’s most critical system deserves whatever chaos that indulgence creates. Osama bin Laden is ashamed he didn’t just hire guys like Bobby Rubin et al. Helluva lot more efficient. And world-wide. Or at least western world. Benedict Arnold, bin Laden, Paulson, Bernanke, Greenspan, enabling political hacks are all culpable. All too clever by fractions. And Geithner adds to it by blaming the victims. Paulson not even an honorable mention and he pulled the biggest heist in history with three sheets of paper to just give $100s of billions to the big banks which didn’t lend a dime. A reverse bank robbery. Outright taxpayer hijacking, however.

Ricardo_Amaral  03/11/2009 01:56 AM Report

Enclosed are some of the postings and comments posted on the thread that the moderator of the EliteTrader Forum closed yesterday for no reason as follows:

Here is how the US banking nationalization process works

http://www.elitetrader.com/vb/showthread.php?s=&postid=2327936&highlight=marktomarket#post2327936

March 2, 2009

SouthAmerica: Yesterday when I received the latest issue of The Economist magazine one of the main articles was about nationalizing America’s banks.

Instead of biting the bullet (nationalizing the Zombie banks immediately) the US government prefers the slow death with a lot of pain alternative.

Over the weekend I was watching a senior executive of Citigroup being interviewed on Bloomberg TV – and he said that Citigroup operates in over 100 countries around the world – as if that was a positive information to give some hope for Citigroup’s survival. I guess that fellow (the latest president of Citigroup) were not aware that in many countries around the world the internal financial system is melting very fast and if anything that type of information would represent even more negative news and another nail on the coffin of Citigroup

Many executives and financial experts in Wall Street including various talking heads from CNBC believe that the US government should overturn mark-to-market accounting rules to create even more artificial information that would please Wall Street.

I know they don’t need a government official Act to change these accounting rules – but since the US government want to build up new credibility around the world for the US financial system then Congress can overturn the mark-to-market accounting rules by passing a new Act - and here is the perfect name for that Act: “The Bernie Madoff Financial Transparency Act of 2009”

We are entering a new Great Depression and the US economy is spinning completely out of control in a downward spiral and the best alternative would be for the US government to nationalize the Zombie banks immediately – but since the US government don’t have the guts to do the right thing then we are going to watch the slow death of many of these financial institutions which will cost a fortune to the American taxpayer.

By the way, only FOOLS would invest fresh money on these money pits such as Citigroup – and for all practical purposes many of these Zombie banks are already insolvent and bankrupt.

There’s plenty of money around available for investment but the reality is: the smart money would not touch these Zombie banks even with a 10-foot pole.

*****

March 2, 2009

SouthAmerica: It is not only the matter of cleaning up the balance sheet of these banks - the toxic assets - when the US government fully nationalizes the Zombie banks such as Citigroup then they should also restructure these mega banks and they should break them up into viable businesses that make sense.

In the case of Citigroup they should start by splitting the banking system from the Travelers Insurance business and so on....

*****

March 8, 2009

ShouthAmerica: Talking about stock manipulation - Last Friday, March 6, 2009 Citigroup stock traded most of the day in the range of $ .97 cents and $ 1.00

They traded about 415,218,610 shares in total for the day.

In the last 5 minutes of trading right just before the 4:00 PM closing time - Citigroup stock moves from $ 1.00 to $ 1.03 the closing price.

Someone pushed the price up on this stock with the last few trades of the day right at market closing time.

.

pxlpark  03/11/2009 01:17 AM Report

I would like to thank America's Financial ShamWow® salesman for stopping by to pitch his latest product, but I do miss the props, and this one doesn't come with a 10 Year Warranty (though it just might "Last ten years"). But the country is not going to be fixed by a ShamWow® salesman, who doesn't seem to recognize that the "standards" he claims to be the path to success, are the equivalent of a Rube Goldberg experiment that - which he himself unintentionally even seems to claim - will only work in the best of staged and rehearsed conditions.

On the other hand, what seems to be the other main strategy is to put out all the dog food in a big pile, and tell the dogs "we are going to be away for the week, so please ration and disperse appropriately", and we all know the wondrous gluttony of banks...I mean dogs.

Just because Mr. Geitner says something is going to happen, doesn't mean it will, whether he thinks he can will it or not (I thought that logic went out of style with Bush). When Mr. Geitner said, "It's not about ability, it's about will", I couldn't help but to think this sounds just like something I often hear in corporate America, "Let's just throw money at the problem, and it will go away". I have never seen a problem of this magnitude solved by throwing money at it or even by sheer willpower alone. In fact, it is the clean up guy - the one with the _most_ ability - that is eventually called in to clean up the mess (I speak from the experience of being the clean up guy more times then I care to remember).

Who would have guessed that Mr. Geitner's other talent was that he is a real live ninja at avoiding unscripted questions, which only became really apparent when Mr. Rose went off script near the end. When pushed on China, Mr. Geitner fairly clearly says - through his aversion and body language, that the only logical reason we are propping up the zombie banks, on this nightmare version of Weekend at Bernie's, is so that the countries who are still buying our debt won't get discouraged and loose confidence.

Beverly Sills once said, "You may be disappointed if you fail, but you are doomed if you don't try". And while we need to keep trying, we also need to stop letting our dogs be fed by the people making the dog food.

Ricardo_Amaral  03/11/2009 01:14 AM Report

It is not by accident that China invested $ 10 billion dollars in Petrobras a few weeks ago. When I started writing about China and Brazil on Brazzil magazine in June 2005 – at that time Brazzil magazine had no readers from China since then 45 percent of the readers of Brazzil magazine are from China and a lot of Chinese have been reading my articles about Brazil and China.

Brazzil Magazine June 2, 2005 “While China Rises the US Falls in Brazil and Latin America” Written by Ricardo C. Amaral

http://www.brazzil.com/2005-mainmenu-79/152-june-2005/9296.html

If you want to read some of these articles about Brazil and China then go to:

Author and Columnist: Ricardo C. Amaral

http://brazzilnews.blogspot.com/

*****

I also post a lot of information on a regular basis at the EliteTrader Forum and my screen name on that website is: SouthAmerica. Here are some of the threads that I have been posting recently.

By the way, EliteTrader has just blocked 2 of my threads from further comments in the last 2 days - 1) A thread about US government bank nationalization of the Zombie banks, and 2) the thread about General Motors, Ford and Chrysler.

Citigroup a Real Suckers Bet

http://www.elitetrader.com/vb/showthread.php?s=&threadid=156748

Zombie Banks and nationalization

http://www.elitetrader.com/vb/showthread.php?s=&threadid=156675

The US economy and the real GDP

http://www.elitetrader.com/vb/showthread.php?s=&threadid=126048

General Motors / Ford / Chrysler

http://www.elitetrader.com/vb/showthread.php?s=&threadid=143102

General Electric Corp. (GE) - Is GE Okay?

http://www.elitetrader.com/vb/showthread.php?s=&threadid=141766

Economic Forecast for US Economy for 2009 and Beyond.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=149585

Pimco, Bill Gross and CNBC

http://www.elitetrader.com/vb/showthread.php?s=&threadid=154992

Economic Forecast For US Economy for 2005 and Beyond

http://www.elitetrader.com/vb/showthread.php?s=&threadid=49982

Over 75 years ago Wall Street Crashed; but today the New Crash is already underway..

http://www.elitetrader.com/vb/showthread.php?s=&threadid=117003

Central Banks and the US Dollar

http://www.elitetrader.com/vb/showthread.php?s=&threadid=81958

.

Educateus  03/11/2009 01:08 AM Report

Plenty of blame to go around e.g. banks... Didnt the fed keep rates too low for too long? Didnt the gov protect the banks for years without regulation? Why not call for resignation of the top CEO's since they profited for years from this? Get Buffet, Soros, and Rubini more involved with the solution if your doing this why not let us know? Be more aggresive dont let this problem keep gaining momentum.

Ricardo_Amaral  03/11/2009 12:39 AM Report

Treasury Secretary Timothy Geithner said on his interview at the CRS that he did not see this massive crisis coming.

I saw this crisis coming years ago, and I have been writing about it for many years.

Here is an article that I wrote in November 2004 that was published in various newspapers and magazine including: Brazzil Magazine - February 2005

"It’s 2008. The US Has Dragged the World into a Depression."

Written by Ricardo C. Amaral

http://www.brazzilmag.com/content/view/1424/49/

...During the second term of George W. Bush’s presidency, finally all the American mismanagement and mistakes did catch up with the American economy, and a number of trends merged into a perfect storm causing the final meltdown of the US economy.

The American economy went through a downward spiraling out of control implosion. Massive US government budget and trade deficits forced the Federal Reserve Bank to raise interest rates to try to stop the steep decline of the US dollar in world markets against other currencies.

...The world lost its confidence in the US economy because they realized that the US economy was over leveraged, and would not have the necessary cash flow to pay its bills in the future. The US economy was outsourcing its good paying jobs by the millions to other countries - in the last four years the US economy had exported over 10 million jobs. A flood of US corporations started reincorporating in tax havens to avoid paying US corporate taxes.

...the market dynamic of all these events combined to cause a major institutional collapse in the derivatives market, and that started a domino effect in the entire financial system causing a massive meltdown.

Panic among the major holders of US dollar also contributed to the stampede like we had never seen before - and at the end, Chernobyl looked like nothing when compared with the final meltdown of the US dollar, and US economy during the summer of 2008.

.