Tuesday, May 13, 2014


Had a perfectly wonderful weekend with nary a care in the world and apparently neither did anyone else.  Things appear to be exactly as I left them except that the football season has ended in England which means no more premiership matches in the middle of the week forcing me to occupy my spare time with less important things such as bank crises and ridiculous fiscal and monetary policies seemingly all around the world.  So much to do.

One thing I will have more time for is Tim Geithner's new book which he has been humping unmercifully on every media outlet and all the ships at sea.  So far, no one has panned it or gotten terribly upset.  It seems to be self-serving, then again I can't remember the last time a personal memoir reached the conclusion, "I am an idiot," so one can overlook that.  I expect to be able to comment a good deal more once I get my free--preferably autographed--copy, but there were a couple of things that struck me in the overall impression that can be gleaned from the reviews and certain quotes that have emerged.

To begin, let me say that comments from people for whom I have a great deal of respect indicate that in the midst of the crisis, Geithner did a hell of a job, which is all the more striking as it is clear that his credentials for becoming the head of the New York Federal Reserve, pretty much confirmed by his own words, were the political and personal ties to the Clintonistas headed by Bob Rubin whose political and financial influence crossed party lines and intertwined with the Goldman Sachs connection both at Treasury and at the Chairmanship of the NY Fed.  He was as I used to refer to him as a "Suit" and quite frankly, though he has grown in stature I have a feeling that he is still a suit although one with the ability to stay cool and calm in the midst of a crisis which is no mean feat and one not to be belittled.  So, he's a guy who hadn't a clue as to what the job was about who apparently rose to the occasion and performed.  Good on ya.

Then again, in his published excerps, in speaking of the catalysts of the crisis, Bear Stearns and Lehman Brothers, he seems to overlook the fact that these were not surprises to which one awoke on a Monday morning; the seeds of collapse had been sown years before and had well-taken root and most importantly, had been recognized by those with more experience and savvy.  The truth is his institution, which was best equipped to recognize and assess the systemic risk that was growing on a daily basis was caught seemingly unawares, and it to that he must answer.

It is simple to speak in hindsight but the colossal mistake was to "save" Bear and destroy Lehman, more so because there was no secret that Lehman had been warned time and again as to the state of their financial condition and "saving" Bear should have in no way be thought of relieving the pressure on Lehman.  Bear could have been allowed to fail without so much as a whimper which might…and I emphasize, "might"…have influenced future developments especially on the part of Lehman which could have defused or certainly alleviated the destruction that followed.  In my mind,  there is much of the failure in regulatory bodies…not the lack of regulation…that was central to this crisis.  But that is another book to be written by someone else and some other time.

With all of that said, he should be a good read and help him in his retirement planning.  Little has been said as to what he thinks about the "reforms" to the system, or if it has been said, I missed it.  After all, I was with grandchildren which tends to make me less perceptive to external sounds.  I'm sure he feels much has been accomplished but more could be done.  Memo to Tim:  get real.  Maybe you didn't know squat before but by this time you should be pretty much clued in.  Then again, that may be asking for a bit too much.

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