NOT NEEDED

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.

THE INVISIBLE MAN

Terry Checki announced his intention to retire from The Federal Reserve Bank of New York yesterday.  "Who the hell is Terry Checki" you might ask and he would be delighted that you did.  He shunned the limelight and any attention that might be focused on him.  Outside of the world of Central Banking, finance ministers and the boards of financial institutions he was virtually unknown.  I don't remember  if I have ever seen him on television or his photograph displayed in any newspaper. For the 40-odd years at the New York Fed he was The Invisible Man, but at the same time, to the extent that anyone could be, he was The Indispensable Man, recognized as such when in the battle over the requirements of the next Fed Chairman one commentator remarked, "Hell if they want a crisis manager, pick Terry Checki."

Beginning with the Latin American debt crisis in 1980 and in every financial crisis up to the present day, Checki was deeply involved and in many cases responsible in a large measure for the solution.  He saw it all, understood it all, knew all involved and was the institutional memory that was so vital throughout the years.   He believed deeply that the best policies and solutions were those made in private and therefore you never saw him express a private view or break a confidence.  As such his reputation was unmatched: no one, and I do mean no one was as respected or trusted more than Terry Checki.  His word was his absolute bond; his phone calls not returned but answered immediately.  His call list unparalleled in the world of finance.  To say he knew everyone that mattered would be an understatement; to say he treated everyone as if they did would be merely speaking the truth.

In the world of crisis management those involved know of his efforts but even some of them are unaware of one moment in his career.  On September 11, 2001, he was the senior person in the Fed in New York.   I am told he lived in the Bank for the next 40 days.  A year later, his name arose in a conversation involving a small group in Washington into which I had wandered.  "Checki," said one very senior participant, "hell, he kept it running.  He saved the system."  No public thanks given but none asked: he would simply say it was his job.

The Fed is losing one of the finest public servants I have known...he'll pop up again somewhere simply because his value is too great to ignore.  Instant credibility arrives with him raising the stature of any institution.  But more importantly, his legacy will be simply, "There was an honest man."  I suspect that will be what he will value the most.