Being Timothy Geithner

Why is the Treasury Secretary, Timothy Geithner, out front talking about Iran's nuclear capability? Is this unusual? What are his expertise in this area? It seems as if he has enough on his hands with the economy alone I would think.

Being Timothy Geithner IV

Treasury Secretary Timothy Geithner says that the markets are doing incredibly well. Isn't strange that this is so when many millions of American and small businesses are doing so incredibly bad? Small businesses can't get loans to stay afloat and individuals can't get them to start a business. Wasn't the bailout to the Wall Street banks suppose to enable these things? Wall Street banks are flush with cash largely because of the money the American taxpayers lent while they sit and do nothing for us.



Listening to Geithner, I wondered if were seeing the same reality. Perhaps his indicators point to some other reality. But when has it ever been that the markets were doing so well and the American people so poorly? Does this not support the fact that Wall Street is the other Las Vegas as Nicholas Darvas asserts in his book, Wall Street: The Other Las Vegas. John Bogle writes in in his wonderful book Enough that "there is too much speculating and not enough investing." I agree. What is for sure is that the national and global economies were saved by the bailout and stimulus. I don't think bottoming out was a viable option. But it should have been required of AIG to make concessions to their counterparties. Instead, the like of Goldman Sachs and Barclays, who failed miserably by investing in new products like credit default swaps and collateralized debt obligations, got paid big in fees before the crisis and a big bailout totaling over 20 billion in Goldman Sachs' case thereafter. Who wouldn't be flushed with cash with such opportunities?

When asked about Arianna Huffington's movement, Move Your Money, which encourages people to move their money from big Wall Street banks to small banks and credit unions, Geithner thought it was a bad idea. He was initially quite dismissive of the power which rests with the depositors. Without giving reasons why it was not a good idea Geithner quickly backpedals to offhandedly support the American people with words. But we'd like to see some action. The bailout was suppose to increase lending to small businesses. Instead, these Wall Street banks give out billion-dollar bonuses.

Geithner seems to care less about the unavailability of loans to small business and individuals seeking credit to start a business and more concerned about Wall Street banks which he did not oversee during the years he spent as the New York Fed chairman.

Being Timothy Geithner III

William Black, a former federal banking regulator who was active during the Saving and Loans crisis of the 1990's, have scathing words about the current Secretary of Treasury, Timothy Geithner, and the administration's effort or lack thereof to reform banks.

In a recent Newsweek interview Black says,

The administration's officials have all been failures as regulators. [Chairman of the Securities Exchange Commission] Mary Shapiro's big thing was self-regulation. That worked real well: the self-regulation of the investment banks. Ben Bernanke [Chairman of the Federal Reserve] I'm also very critical of, but I do give him credit for being willing to drop a lot of his anti-regulatory ideology in the face of the crisis. He literally wrote the book on the Great Depression, but he was not going to go down in history as the person who caused the second Great Depression. Some of the things Bernanke did were very bad, but he is in sharp contrast to Geithner who has been wrong about everything in his career. When Geithner was once answering a question in response to Ron Paul, he said, 'I've never been a regulator.' He was then the President of the New York Federal Reserve, and he purports that he was never a regulator? That is a demonstration of what is wrong with the Federal Reserve banks if the head of the unit doesn't think he's a regulator. He's a disaster.

Mr. Black points out that during the S&L scandal that there were convictions. During the banking scandal there have been none:

During the Saving & Loans crisis, we had over 1,000 convictions that involved insiders and gigantic borrowers. Now we have zero. The FBI did not even begin to investigate the large subprime lenders until March 2007. People would be upset if they had the facts, or if you asked them how many criminal referrals there were for mortgage fraud. (There were 65,000 last year.) Meanwhile, the administration is saying there is no problem and that the financial crisis is over. That's the exact opposite of what you want to say and do if you want dramatic resources to change things.

There has obviously been and apparently continues to be misconduct on Wall Street. Nassim Nicholas Taleb has been shouting this for some time now. So, why haven't there been any convictions and why do we expect that the same people who got us in the mess will now get us out?

Being Timothy Geithner II

Before the Congressional Oversight Panel, Secretary of Treasury, Timothy Geithner, assured the panel that the financial system is being restored because counterparites, foreign and domestic, are gaining confidence in our system again. Even though jobs are important, it's a lagging indicator, so what is most important now is confidence.

As I listened to Secretary Geithner I couldn't help but to wonder, as I have written here before, why is this so? If you were a counterparty wouldn't you invest in an economy where it is known and proven that taxpayers will bailout failed banks and insurance companies like AIG who paid $105 BILLION to its counterparties at 100% on the dollar when the auto industry was required to take a haircut?

Confidence? The confidence of counterparties do not lie in our economy proper, our industries, products, sales, etc. Their confidence lies in our government through the taxpayers to be bailed out. They have confidence that the Treasury Department and The Fed will bolster their investments in spite of the competancy of AIG and Wall Street banks. But from where does this confidence spring?

The current system seems like a house of indebted cards based on a system that seems to have just as much confidence as casinos. (I would highly recommend Nicholas Darvas' book, Wall Street: The Other Las Vegas.) If we didn't bailout AIG and these big Wall Street banks, would these counterparties, foreign and domestic, who seem to have gammed the American financial system on the backs of the American taxpayer, be so inclined to invest?

Through AIG, Goldman Sachs received $12.9 BILLION on top of its $10 BILLION received from TARP directly, Societe Generale Corporate & Investment Banking, one of Europe's main financial services companies received $11.9 BILLION and Barclays of Britian recieved $7.9 BILLION. Two-thirds of AIG's funds flowed to European banks. So, with these facts is Secretary Geithner correct when he points to other investing in our system again as a sign of recovery?

Okay, even if the confidence of counterparties is a sign of recovery in that the reason for investing is to insure some sort of security and others fell secure again, what is the taxpayers' insurance based on--more debt, hiked interest rates and fees? These counterparties can count on the American taxpayer. They can repay loans not through legitimate products but through the spread created by low interest government loans via programs like TARP and hiking the interest rates on taxpayers' credit cards and collecting late fee charges on those who bailed them out.

Wall Street Banks such as Goldman Sachs seems to have done nothing really that would enable it to raise the $10 million dollars given through TARP with minimum interest thanks to the government besides benefiting from the means above. Yet, these guys are complaining of losing talent if million dollar bonuses aren't paid. But I'm less concerned about the bonuses and more about the system itself. But it's doesn't seem to be about losing talent. It seems more about gaming the system. He who does this best on Wall Street seems to win. Doesn't Timothy Geithner know this?

Being Nassim Nicholas Taleb XI

President Obama reappointed Ben Bernanke chairman of the Federal Reserve today. If you have read this blog, I have not been a great fan on President Obama's economic team, Timothy Geithner and Larry Summers, along with Ben Bernanke, as they are largely the reason that we are currently in this economic mess.

Having written more than a few posts here on the financial crisis, it seems imperative that we hear and employ ideas from outside of the current system. Nassim Nicholas Taleb succintly outlines why he is no fan of "the triplets" as he calls them on a recent appearance on "Morning Meeting with Dylan Ratigan."

Let's look at them. They don't seem to understand risk. They have their models and were blinded by their models. The first person not to understand risk is Larry Summers ... [L]ook at Harvard's finances, all right? He is going to do to us what he did to Harvard?

Second one, look at Geithner. In the rare instance in which you have to look at someone's behavior, the gentleman's house, he couldn't understand the risk of the real estate market? That the house could drop in value? Look at him. He is stuck with his house. Look at the numbers. You can see a lot of jokes on the way with someone with these mortgages.

The third person is Bernanke. We're giving more power to the Fed, who got us here?

These are biting words, but true nonetheless. We need more voices out there like Nassim Nicholas Taleb who speak against the current failed system and ask simple questions that rally the people. The question is...are we listening? In order for our voices to be heard in Washington we have to first understand "what's going on."

Being Outraged II

Reuters reports, according to the Wall Street Journal, that with the bailout of AIG "Wall Street banks and lawyers could collect nearly $1 billion in fees from the Federal Reserve Bank of New York and American International Group Inc to help manage and break apart the insurer."

Is this simply outrageous in a company where the government, you and me, has an ownership stake of 80%, having already received some $180 billion dollars from taxpayers? Among those who could collect these big fees (people, in banking, in case you didn't know, it's all about the fees)...

"Morgan Stanley could collect as much as $250 million, the newspaper said, citing banking experts and documents released by the New York Fed. Bank of America Corp, private equity firm Blackstone Group LP, law firm Davis Polk & Wardwell LLP, accounting firm Ernst & Young, Goldman Sachs Group Inc and JPMorgan Chase & Co are among others that have or could get big paydays for helping dismantle AIG."

Call me a conspiracy theorist if you want, but once you have been head of the New York Fed as, Timothy Geithner has, developing close relationships with these bankers and allowing poor oversight of the same, I wonder if there is a conflict of interest as the chief spokesperson on behalf of the People as the Treasury Secretary.

Not only did Timothy Geithner allow these banks to fly below the radar while engaging in activities that by any standard outside of Wall Street would be bogus as the head of the New York Fed, but with the breakup up AIG the fees that will be given are doubled than any other breakup in our history--this at a time where the country has been at the brink of financial collapse and in serious debt.

AIG seems to have been the distribution center for Goldman Sachs, J.P. Morgan Chase, Citibank, and Banks of America. All have gotten assignment to assist in the dismantling of AIG, not to mention that many of these have already gotten bailout money having been insured by AIG. The Wall Street journal reports that the AIG breakup will be four times the fees paid to break up AT&T Corp. in 1996, and nearly double those paid for Visa USA's 2008 initial public offering, the largest U.S. IPO ever. Is this not outrageous?

Being David Brooks III

Conservative columnist, David Brooks, whom I have followed for years and whose columns I often appreciate, wrote a thoughtful piece on Bernanke and the Fed that is worth considering, "Wise Muddling Through." I have written of Brooks here before.

Brooks writes:

Their decision not to bail out Lehman Brothers was based on a complete misreading of the economic psychology. Paulson was sick of doing bailouts. He seems to have had some sort of intuitive moral sense that it was time for some bank to pay for its mistakes. Bernanke and Geithner went along, and none of them anticipated the meltdown that followed.

But this is not a story of failure. It’s a story of effective muddling through. Bernanke & Co. never really got control of events. But they did avert disaster and committed only a few big blunders. In the real world, that counts as a job well done.

As I see it, there are two things wrong here:

First, it is very difficult to speak about another's moral intuition, especially when that one was over Goldman Sachs and when he and Geithner, who was over the NY Fed, have such cozy relationships with Wall Street bank executives.

Morality is shown by consistent actions and decisions. Paulson insisted that Merrill Lynch and Bank of America merge, giving the latter a pretty hefty bailout. BofA would probably be insolvent without it, as well as Goldman Sachs.

Second, it was their lack of complete oversight of these banks over many years that led to the crisis, not just merely allowing Lehman to fail, but allowing AIG to essentially become a Hedge Fund that insured Goldman Sachs, becoming too big too fail.

While Brooks is appreciated, I am with Jack Bogle, Nassim Nicholas Taleb, Arianna Huffington and Eliot Spitzer. Their words and actions have mattered most in this economic crisis.

Being the Federal Reserve II

President Obama proposed a plan that would give the Federal Reserve more regulatory power. My only question is why didn't the Fed use the power it already had to avert a near collapse of the global economy? It seems that Alan Greenspan, former Federal Reserve Chairman, allowed some things to occur for so many years and Timothy Geithner, the current Treasury Secretary, was over the Federal Reserve of New York during the time that Wall Street nearly brought the global economy to its knees. What was Geithner doing then? It seems that he was not able to handle the power he had in New York. Why give Geithner and the Federal Reserve greater power now? And make no mistake about it, we are talking about power here and lots of it! Maybe someone can break all this complicated stuff down to me like I'm a two-year old. Sometimes I wonder if the complications are purposeful.

Being Arianna Huffington VIII

Arianna Huffington has given President Obama very high marks for his first 100 days, except for his handling of the bank crisis with Timothy Geithner and Larry Summers at the helm.


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Should Citi go into receivership? I think so.

Being Timothy Geithner

From the beginning I was no fan of Timothy Geithner and have written of my distrust of his policies or lack thereof more than once here. But having read the New York Times article over the weekend about Mr. Geithner's close ties with Wall Street bank executives over the five years he was head of the New York Fed angered me all over again. This was during a time that he should have been aware of what was going on but he seemed either unaware or unconcerned. He did nothing. Then I remembered how his nomination was passed, even after it became public that he had not paid his taxes. He would become the Treasury Secretary anyway, probably because he was the handpicked Wall Street insider and these big banks gave so much money to the campaigns of those in Washington. This too added to my increasing annoyance over the weekend.

Jo Becker and Gretchen Morgenson, authors of the New York Times article, writes that "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."

So, tell me, how can Mr. Geithner be trusted with the public's interest?

Being a Pundit, Newscaster and Analyst VII

It looks like Jim Cramer is being lambasted for his financial ignorance and apparent arrogance yet once again. But this time by a respected economist, Nouriel Roubini. "Cramer is a buffoon," said Roubini, professor of economics at New York University. "He was one of those who called six times in a row for this bear market rally to be a bull market rally and he got it wrong. And after all this mess and Jon Stewart he should just shut up because he has no shame."

Like Nassim Nicholas Taleb in the Black Swan, Roubini predicted that we were heading for the worst recession in many decades. His truthful, though gloomy, prediction of the global financial meltdown garnered him the name of Dr. Doom. In an interview with the Associated Press Roubini said this about Cramer: "He's not a credible analyst. Every time it was a bear market rally he said it was the beginning of a bull and he got it wrong."

Cramer responded by writing a blog entry that Roubini was "intoxicated" and full of his own "prescience and vision." He also asserted that things are getting better since the stock market reached bottom in early March. I'm no economist, but this seems unlikely. I have not even heard this from any economist or financial analyst. Most are uncertain of where the bottom is. In a Youtube video roundtable discussion with economic expert, Linda Yueh and Harvard economist Kennth Rogoff, Taleb says, "I tell you one thing. You tend to think that the current crisis is in the middle or toward the end. I think we may be in the very beginning." This was a few months back.

Cramer also wrote that Roubini and Paul Krugman, a Nobel Prize Laureate in economics--not that this means much these days, are a part of "the nationalization jihad." Roubini responded by saying that he is in support of Treasury Secretary Geithner's plan. (Hmmm, there maybe some qualms with this. There is a reason the banks stress test report has been completed but not released. The TARP probably has not helped many of these banks; many seem to be failing in spite of it.) "He keeps insulting me personally and saying a bunch of lies," Roubini said. "He doesn't even know I was supporting it so he says lies." Maybe CNBC should find another financial analyst. I wondered after the Stewart evisceration if he would last a week after. He appears to be hanging on, but maybe not for much longer.

Being Larry Summers

Larry Summers was a private citizen and not an adviser to President Obama last year when he accepted big fees from companies that received TARP funds, including Goldman Sachs, Citigroup, and JP Morgan. Summers also received some $5.2 million last year from D.E. Shaw, a major Hedge Fund. While receiving such payment is not illegal, does this pass the smell test?

Below is a list of companies from which Summers received speaking engagement fees over last year. Can Summers be an impartial adviser to the President? Could speeches in and of themselves in the hundreds of thousands of dollars, even millions, unduly influence an adviser? While Summers was not an official White House adviser, he was nonetheless an adviser to the then President-elect Obama.

Skagen Funds, $60,300, (1/9/2008)

Skagen Funds, $60,300, (1/10/2008)

Skagen Funds, $59,400, (1/11/2008)

JP Morgan, $67,500, (2/1/2008)

Itinera Institute, $62,876 (1/8/2008)

Citigroup, $45,000 (3/3/2008)

Goldman Sachs Co., $135,000, (4/16/2008)

Associon de Bancos de Mexico, $90,000, (4/3/2008)

Lehman Brothers, $67,500, (4/17/2008)

State Street Corporation, $45,000, (4/18/2008)

Siguler Guff & Company, $67,500, (5/7/2008)

Hudson Institute, $10,000, (05/28/2008)

Citigroup, $54,000, (5/30/2008)

Investec Bank, $157,500, (6/13/2008)

Goldman Sachs, $67,500, (6/18/2008)

Lehman Brothers, $67,500, (7/30/2008)

Tata Consultance Services, $67,500, (9/21/2008)

State Street Corporation, $112,500, (10/2/2008)

McKinsey and Company, $135,000, (10/19/2008)

Charles River Ventures LLC, $67,500, (11/112008)

Pricewaterhouse Coopers, $67,500 (9/9/2008)

American Chamber of Commerce In Argentina, $135,000 (10/7/2008)

American Express, $67,500 (5/7/2008)

Is this change we can believe in? Is it unrealistic to think that change can occur in Washington among all of its players? If not is it not much to askt that change occur around those closest to the President? This has been my concern with Timothy Geithner and his policies as the former President of the New York Fed and Larry Summers with his role in deregulation under President Clinton.

Being GM VI

The White House and Congress can both look like a big sad joke at times, whether under the past or present administrations. (Timothy Geithner and Larry Summers still don't sit well with me, even after Geithner's appearance on various talks shows today. In fact, he has caused me to wonder even more. I know he can't be stupid; so, he's probably not trustworthy.) How can they be taken seriously with the best interest of the people at heart with such double standards? Excuse me, I'm livid!

According to the Associated Press, the CEO of GM, Rick Wagoner, has been asked by the White House to step down. He will do so immediately. Now, I wonder how many in the White House administration and Congress will do the honorable thing and step down before we allow them to issue one more brown cent?

GM, Chrysler and the UAW have been asked to make major concessions before receiving a bailout. OK. But what annoys me is that there seems to be a double standard when it comes to companies that make products and those that merely shuffle paper.

Hundreds of billions were given to Wall Street banks and AIG which siphoned billions, to the likes of Goldman Sachs which received $12.9 billion and some 30 plus billion to Barclays in London and Deutsche Bank in Germany. Some $168 billion went to AIG alone. A total of about $17.4 billion went to GM and Chrysler.

Yeah, don't mention to me that AIG has a new CEO, the hand picked former board member of Goldman Sachs, Edward Liddy.

Being Arianna Huffington VI

This Tuesday morning on CNBC's Squawk Box from 7-9 Arianna Huffington will be the guest host. The show will feature Nassim Nicholas Taleb, Nouriel Roubini, and Congressman Barney Frank. Maybe this will begin the process of resuscitating CNBC's tattered image. After the Jon Stewart evisceration of CNBC's financial analysts, we all know they need it. Arianna Huffington's piece on Jon Stewart's interview with Jim Cramer and John King's interview with Dick Cheney is great.

The Huffington Post article can be read here. Brilliant comparisons are made between the Jon Stewart and John King interviews. Squawk Box this Tuesday promises to be interesting with both professionalism and punch. While the intentions and knowledge of Huffington, Taleb and Roubini my be trusted, the same may not be said of Barney Frank. I tend to distrust politicians generally. Senator Chris Dodd (D) and Senator Richard Shelby (R) would be among these. Neither would get my vote if I were constituents in theirs states.

I have some thoughts about Congress and some questions for Congressman Frank. Has the Federal Reserve become a hindrance to a viable democratic capitalistic system where there should be checks and balances? The Fed does not have absolute power! Not only has the Federal Reserve failed us, but Congress too in their lack of oversight of the Fed—instead there appears to have been, rightly or wrongly, collusion in regulating these big American banks with ties with hedge funds and the likes of Barclays in London and Deutsche Bank in Germany.

This week Treasury Secretary Geithner asked that the Treasury be given more power to regulate some companies, namely those such as AIG, and perhaps GE, who are not banks but behave as such. To give the Federal Reserve more power seems like a sick solution. How do you give more power to those who have utterly failed the American people who seem bent on a global imperialistic financial agenda to concentrate wealth among the few in the world? JP Morgan, the founder, was astute at this kind of global financial focus many years back shortly after the Civil War.

There is no surprise that Wall Street bankers are arrogant and self-centered. Although JP Morgan served the US well with his financing of Thomas Edison, and his investments in infrastructure, big banking seems to have been conceived out of arrogance and dominance, the necessity of centralized global power in banking. Some may assert that it is simply human nature. OK. Regulation is then mandatory, perhaps the kind that is revisited for efficacy and maintained for stability.

As a member of Congress how is it that Congress' oversight of the Federal Reserve went completely unwatched? For many yeas Alan Greenspan was instead a revered demigod of sorts with Congress shaking its heads in agreement to everything he proposed. I have written here on Being Alan Greenspan that included a scathing critique by Bill Flickenstein. He has written of Greenspan often, beginning some years back. Mr. Flickenstein provided more oversight over the past years than members of Congress on the right, left and center. They, by and large, seem to have their self-interest at heart, one that seems to go straight to the heart of campaign financing in order to keep their "illustrious" civil servant careers.

I hope that Mr. Frank will have to answer hard-hitting questions, perhaps from those coming from the people. While Arianna Huffington never seems to shy away from hard-hitting questions for all sides, Democrats and Republicans, I also understand that polticially sometimes it is not always the platform, especially considering certain shows on certain networks work, not to mention the rescuitation of CNBC. My very wealthy Republican partner said that since Taleb and Roubini will be on Squawk Box with Huffington that he will sell short on Tuesday. As one who does not take tips from anyone, he took Huffington's guest appearance on Squawk Box with Taleb and Roubini as Tuesday tip. That was funny! Truth generates short-selling.

I'm really looking forward to the show on Tuesday. Maybe Huffington should have a show every Tuesday. It would be great to have a finance show that addresses critical issues and how decisions made by government and private coroporations affect the masses. The perfect storm seems to have been created in that the masses were duped, though not without culpability with the complicit will of Congress through legislation and the creation policy for the likes of Fannie Mae and Freddie Mac, to accept mortgages so that individuals and Wall Street banks could collect billions of dollars in fees beforehand and a bailout thereafter.
These are some of the questions and thoughts that I'd like to see addressed when Arianna Huffington hosts Squawk Box this Tuesday. What would you like answered or what comments would you make?

Being at a Crossroad

America is at a crossroad. The Wall Street crisis and the responsibility place on average Americans in what Nassim Nicholas Taleb calls, "socializing debt and privatizing gain," must not continue. President Obama was elected to bring change; let's hope that change is initiated on Wall Street and in Washington.

There is no doubt that we will get change; we don't expect one of the greatest entrepreneurial countries of the world to fail. It won't. The recession will end; markets will turn around. But we may not get fundamental change where power structures on Wall Street and in Washington are shaken to the core and actually turn directions.

Talking to one of my brothers last night, he reminded me of the very real necessity of being behind the President Obama and supporting his agenda, like those designed by Timothy Geithner, who allowed this collapse under his watch as the President of the New York Fed and Larry Summers who allowed deregulation under President Clinton supported by Republicans such as Phil Graham.

My brother, though rather conservative now, began as a real lefty in the late 60's and early 70's. As I listened to him I could hear in his voice the respect and love that he has for the President on so many levels. I have the same respect and love but I admit to being annoyed at what is occuring. Do we expect too much from one man as we did with Franklin Delano Roosevelt or Martin Luther King,Jr.?

President Obama is probably simply being judicial. Do we not realize the political web and the necessity of picking battles and aligning with enemies? As I was railing against Geithner and Summers, my brother took another position. he took another position. "Judith, we can't let President Obama fail," he calmly said in softly spoken tones toward the end of our hour-long conversation. There was a hush on the line.

These words reverberated in my mind again and again as I prepared for bed at some 2:30 in the morning. Should we support our president as many supported past presidents to our detriment? Maybe the politically correct thing is to lie low and let some things settle.

While things may get better for us, as glimmers of hope begin to emerge, I really wonder about the possibility of real change. While I totally support the President, I'm not feeling incredibly optimistic about Geithner and Summers when it comes to the change we need for long-term sustainability. This crisis can't be wasted.

America is at a crossroads. Will we demand change or simply want an increase in our 401Ks? Can we have both?

Being Arianna Huffington V

Here is Arianna Huffington On "Morning Joe." If I had not been browsing the HuffPost, I would have missed this interview altogether. This show has become a must not see for me.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Armed with a master's degree in business from Oxford, Arianna's common sense take on Wall Street banks and credit unions makes a lot of sense. She does not hold the President's opinion on the Treasury Secretary.

The fact that Secretary Geithner had direct influence over Citigroup as the President of the New York Fed can't be overlooked, not to mention that Edward Liddy, the CEO of AIG, said under oath last week that Treasury was in on every decision of the contract. This includes the bonuses for AIG that everyone in the administration and Congress is shocked about.

"Toxic thinking," said Arianna, "is worse than toxic assets." This is her reason for calling on the removal of Geithner, Summers, et al. I have to say that I do not disagree with her.

Being Eliot Spitzer

Pesonal sordid sex scandals have never really held incredible interest for me. While I am an advocate for integrity and honesty and believe that how we live our lives matter, we all have personal failures and at any time we may need to ask forgiveness from our loved ones and the community at large.

For this reason, I was not particularly interested in the Spitzer prostitution scandal. If I'm remembering correctly, his undoing was personal and did not include impropriety as the Governor of New York. What I hoped for then and now is for Eliot Spitzer and family to be made whole as they work through a most difficult time. It's been a year and they seem to be healing. Let's hope so.

Now, what does have incredible interest for me is Spitzer's appearance on "Fareed Zakaria GPS" this afternoon. During the interview, I was particularly struck by the comment that the red herrig is the AIG bonuses instead of focusing on the "12.9 billion dollars" paid to Goldman Sachs the same company where President Bush's Treasury Secretary, Henry Paulson, was CEO. The $168 billion dollar bailout to AIG was given and Bear Stearns was allowed to fail.

Timothy Geithner, as the former President of the New York Federal Reserve, is also under a cloud of suspicion. Nassim Nicholas Taleb and Noureil Roubini assert that those who were a part of the financial crisis, Geithner et al, could not possibly now manage it. Nassim Taleb and Nouriel Roubini, including Arianna Huffington, have all said that the same people who got us in this mess cannot get us out of it. It's not looking good. I am not a conspiracy theorist, but is it coincidental that the sex scandal with Spitzer came out at such an opportune time?

Being Arianna Huffington IV

On "Larry King Live" Arianna Huffington said of the banks that "it's not about liquidity; it's about solvency." This statement rang incredibly true. But I also wonder that with a company like AIG, where we have already invested over $165 billion dollars, if their failure would have even greater consequences. Arianna also called for the removal of Geithner and Summers.

Prior to the President's arrival, Geithner was a part of the Fed before his appointment as Secretary of the Treasury and Summers, President Clinton's last Secretary of Treasury, was an advocate of deregulation. By the way, where are Senators Dodd (D) and Shelby (R)? Weren't they intimately involved in the AIG contract as the Chairman and Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs?

Being a Capitalist III

Yesterday evening on "The Charlie Rose Show" the Treasury Secretary, Timothy Geithner, says that capitalism will "be different" and that the changes are already "dramatically different" in that the "financial industry is already profoundly different."

This scope seemed to include the sheer number of banks that have failed so far. Secretary Geithner also indicated that what doesn't get taken care of naturally will be done through regulation which will "clean out a lot of the excesses and bad practices."



Quite frankly it's not the small banks that concern me; it's the big Wall Street banks that hold the greatest concern for me. We have already had many bank failures, some 26 this year alone, and we have had major banks scandals in the past. Remember the S&L Scandal?

What have we done differently since the S&L scandal that should have made the difference now? Secretary Geithner assures that we will have "better rules of the game."

What do you think? I hope he's right.

Being Bill Kristol

In reference to Bill Kristol's assessment of President Obama's presidency (what ever happen to the first 100 days?) and the passing of the stimulus package in the Weekly Standard, I cannot even begin to dissect his irrational op-ed rationally considering that the President has only been in office for merely three weeks without first agreeing with Matt Damon that he "is an idiot."

It is a good thing that Mr. Kristol's piece is a mere opinion. Kristol suggests things throughout and outrightly speaks for others even when others have spoken otherwise. He smears the line of turf wars at the State Department with those in the White House to the past administration without giving facts; this is pure gossip. He blames Rahm Emmanuel for Gregg's withdrawal on the basis of the Census when Gregg said publically in his press conference that the Census was not the reason for his withrdrawal. Who's lying here, the good right pundit or politician?

Kristol writes:

What accounts for this debacle? You could start with a lack of presidential leadership. Who would have thought the missing player in the first month of the administration would be Barack Obama? He let his signature economic legislation, the stimulus, be shaped by congressional Democrats. He let internal disputes over the difficult question of how to save the banking system result in a disastrous non-announcement of a non-plan by Treasury Secretary Timothy Geithner last week....He allowed Rahm Emanuel to politicize the Census Bureau, losing as a result his commerce secretary-designee, Judd Gregg, an ornament of his professed hope for bipartisanship...

In foreign policy, Obama has exerted no more control. He allowed both Super-Special Pooh-bah Richard Holbrooke and National Security Adviser Jim Jones to give interviews to the New York Times and the Washington Post, respectively, touting their own importance and presenting the president as a distant player in the formulation of foreign policy. Meanwhile, turf wars in the State Department and the National Security Council are even more bitterly fought than usual. The tale of Holbrooke shouting at Undersecretary of State Bill Burns that he'll keep Burns waiting as long as he wants, since he (allegedly) outranks Burns, makes the Rumsfeld-Powell drama look tame...

Obama allowed the GOP to dodge that bullet and begin the term with a reinvigorating series of intellectually successful assaults on the stimulus bill. A strong message on Afghanistan from the administration would have won the support of Republican hawks--and might have caused other Republicans foolishly to move in a semi-isolationist direction, provoking another internal GOP dispute. Withdrawing Geithner's nomination would have elevated the new president above the last eight years of Republican-dominated Washington business as usual.

So Republicans have some reason to cheer. But not much. The country needs a president capable of exercising leadership at home and abroad. Barack Obama has had a charmed career. He's been the magnetic-levitation train of recent American politics, skimming over the surface at great speed without having to slog through the mud that slows down and climb over the boulders that trip up normal politicians. But now he's president. The charm is wearing off. It's time for him to stoop to govern.

Does anyone rationally expect that after three weeks of being in the most partisan organization on the planet that we would see major change? But on second thought, what American president has ever passed such a bill in record time? Does the fact that President Obama even tried for bipartisanship mean anything?

Does anyone really think that the market sell-off was really due to Geithner's speech instead of a gain of short sales and market gimmicks by traders to control the markets? Does anyone actually believe that the efforts of Republican pundits and politicians are not a part of a play to assume power as opposed to an effort to turn the economy around?

Shame on all of you who are participating in this game. Bring varied ideas, not more of the same.