The NYT profile on Geithner is kind of depressing

[Frank Booth]

Geithner, as Member and Overseer, Forged Ties to Finance Club

Even as banks complain that the government has attached too many intrusive strings to its financial assistance, a range of critics — lawmakers, economists and even former Federal Reserve colleagues — say that the bailout Mr. Geithner has played such a central role in fashioning is overly generous to the financial industry at taxpayer expense.

An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions.

His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.
----
But for all his ties to Citi, Mr. Geithner repeatedly missed or overlooked signs that the bank — along with the rest of the financial system — was falling apart. When he did spot trouble, analysts say, his responses were too measured, or too late.

In 2005, for instance, Mr. Geithner raised questions about how well Wall Street was tracking its trading of complex financial products known as derivatives, yet he pressed reforms only at the margins. Problems with the risky and opaque derivatives market later amplified the economic crisis.

As late as 2007, Mr. Geithner advocated measures that government studies said would have allowed banks to lower their reserves. When the crisis hit, banks were vulnerable because their financial cushion was too thin to protect against large losses.

In fashioning the bailout, his drive to use taxpayer money to backstop faltering firms overrode concerns that such a strategy would encourage more risk-taking in the future. In one bailout instance, Mr. Geithner fought a proposal to levy fees on banks that would help protect taxpayers against losses.

The bailout has left the Fed holding a vast portfolio of troubled securities. To manage them, Mr. Geithner gave three no-bid contracts to BlackRock, an asset-management firm with deep ties to the New York Fed.

Much, much more at the link.

[leftofthedial]

1. I totally do not understand (or maybe I just wish I didn't understand)

Obama's selection of economic advisors.

Geithner is part of the problem, not part of the solution.

[jody]

2. I thought the profile on Geithner was very kind!

:sarcasm:

[beachmom]

3. I am a little skeptical for the following reasons:

First, Wall Street has total contempt for Geithner. A lot of negative stories written about him in the early days were fed by Wall Street types. Later on an article came out when one person referred to Geithner as kind of a loser because he only made $500K per year, and that it was when the Administration started to tell them what to do that they turned on him with these negative articles. That is the kind of mentality financiers and hedge fund managers have about Geithner.

Secondly, there are "former Treasury officials" quoted in this article. As in, Bush officials.

Now that doesn't mean the points made in the article aren't valid. It's just you have to take many things into consideration here.

[rvablue]

4. Excellent points! n/t

[emulatorloo]

6. Interesting points, beachmom. I respect your skepticism. EOM

[Skwmom]

9. Wall Street has contempt for Geithner.? The only time Wall Street

or the talking heads (including the resident idiot on Morning Joe) seem to say anything against Geithner is when they want to make sure he toes the line by talking about Summers replacing him. They sure know how to pull his strings but then again it's never been difficult to manipulate an idiot. Of course, they may have contempt for him b/c he is nothing more than their waterboy.

Oh yeah, it makes perfect sense to me that this type of article would be written about Geithner b/c he is hated by Wall Street (the crooked gang he's letting loot the U.S. Treasury).

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[brentspeak]

10. Where is your source for saying that Wall St. hates Geithner?

[KittyWampus]

11. did you read the article? Cause the facts presented don't warrant skepticism.

And "Wall Street has total contempt for Geithner"?

Care to back that up with any facts?

Geithner is an insider whose philosophy is antithetical to democracy.

[Aloha Spirit]

5. Thanks for posting... just finished reading it, and while the historical recount up to '08 lacks

depth, and therefore any revelation, my impression was that it was written to sound balanced.
I was hoping for a little more insight into how decisions did or didn't get made and less summary of what the nytimes has already written.

[Vidar]

7. Everything about Geithner is depressing.

[Skwmom]

8. If this was written about a republican administration, this board would

be loudly speaking out against this (and rightfully so), but b/c it is a Democratic Administration too many are willing to turn a blind eye.