3 Reviews: Timothy Geithner, Stress Test; Reflections on financial crises

choi

The financial crisis | Man in Charge; A former treasury secretary tells all. Economist, May 17, 2014
www.economist.com/news/books-and ... ells-all-man-charge

My comment:
(a) There is no need to read the rest of the Economist review.
(b) "At a state dinner in 2011, Barbra Streisand told him he must be alright because he was a Brooklyn Jew. It was 'kind of her,' he writes, 'except that I’m not Jewish and I’ve never lived in Brooklyn.' Congressmen often assumed he was an investment banker, when in fact he had spent almost his entire life in public service."
(i) Barbra Streisand
en.wikipedia.org/wiki/Barbra_Streisand
(born Barbara Joan Streisand in 1942 in Brooklyn, New York; Her family [noth parents] was Jewish)
(ii) Timothy Geithner
en.wikipedia.org/wiki/Timothy_Geithner
(born in 1961 in New York City; in New York City; Geithner's mother, a Mayflower descendant, belongs to a New England family; AB in government and Asian studies from Dartmouth 1983; MA in international economics and East Asian studies from Johns Hopkins University's School of Advanced International Studies in 1985l section 2 Early career)

(c) "Mr Geithner was known for his brutal candour, and as an author, he does not disappoint. At one meeting he realised that John Thain, Merrill Lynch’s chief, did not know the name of his chief risk officer who was sitting next to him. It was, he writes, 'an awkward moment,' and explained the sorry state of Merrill’s risk management."

See the next posting.

(d) Neil Barofsky
en.wikipedia.org/wiki/Neil_Barofsky
(1970- ; was SIGTARP, the Special United States Treasury Department Inspector General overseeing the Troubled Assets Relief Program (TARP), from late 2008 until his resignation at the end of March 2011)

choi

Matt Viser, Geithner Book Details Turmoil With Warren. Boston Globe, May 12, 2014.
www.bostonglobe.com/news/politic ... RrieryBI/story.html

five consecutive paragraphs:

“Geithner also wrote about an early encounter with Scott Brown, then the newly elected Republican senator from Massachusetts [US senator Feb 4, 2010- Jan 3, 2013] who had railed against special interest deals.

“‘We talked about our kids and about triathlons,’ Geithner wrote. ‘When the conversation finally turned to substance, he said he liked the idea of financial reform and expected to be with us. But without any irony or self-consciousness, he said he needed to protect two financial institutions in Massachusetts from the Volcker Rule’s restrictions.’

“‘Then he furrowed his brow and turned to his aide,’ Geithner wrote. ‘“Which ones are they, again?” he asked.’

“The companies, Brown’s aide said, were Fidelity and State Street.

“The gist of Brown’s request was reported at the time. ‘The key thing that we’ve been working on for three weeks — that directly affects MassMutual, Liberty Mutual, Fidelity — it’s not in there,’’ Brown said in May 2010, adding that he would support the bill if those changes are made. Eventually, those changes were made — and Brown supported the bill.

My comment: There is no need to read the rest.

choi

James Freeman, The Man Who Knew Too Little; Geithner admits that he didn't see the mortgage crisis coming and didn't grasp the severity of the problems after it occurred. Wall Street Journal, May 12, 2014.
online.wsj.com/articles/book-review-stress-test-by-timothy-f-geithner-1399844566

Quote:

“In ‘Stress Test,’ Mr Geithner makes a persuasive case that he is the man most responsible for the federal bailouts of 2008.
Some prefer to credit his Treasury predecessor, former Goldman Sachs CEO Hank Paulson. Others focus on the role of former Federal Reserve Chairman Ben Bernanke. But Mr Geithner insists that, time and again as the crises flared in 2008, he was the most consistent and tireless advocate for government aid to struggling firms. His core principle is that, during a crisis, the creditors of large financial institutions should not suffer any losses.

“there remains the question of why exactly America [got involved in the failing] Bear Stearns * * * Mr Geithner tells the story of Warren Buffett approaching him at a conference shortly after the rescue to offer congratulations. 'I was sort of hoping you wouldn't do it, because then everything would have crashed and I would have been first in line to buy,' said Mr Buffett, according to the book. 'It would have been terrible for the country, but I would've made a lot more money.' A scenario in which Mr Buffett is snapping up bargains doesn't sound like Armageddon.

"He [Geithner] admits that he didn't see the mortgage crisis coming and didn't grasp the severity of the problems after it appeared * * * [in part] because his staff's analysis couldn't foresee a downturn as bad as the one that occurred. None of this is particularly surprising in a man who, at the time he became president of the New York Fed [right before Geithner was Treasury secretary], had never worked in finance or in any type of business—unless one counts a short stint in Henry Kissinger's consulting shop. At Dartmouth, Mr. Geithner 'took just one economics class and found it especially dreary.'

My comment: This book review is not surprising, considering that many Republicans have opposed ANY bailout.