timothy geithner

European Bank Rescue Package May Be Announced This Coming Week

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eurozoneThe planets are aligning for another round of debt monetization in Europe, backed up by the United States. Mario Draghi, the president of the European Central Bank, is reportedly looking at expanding the amount of Spanish government debt he can buy. He is also said to be considering another LTRO – Long Term Refinancing Operation, which is the mechanism the central bank uses to buy debt from private sector banks.

That Spain needs help is beyond doubt. The global bond market has been fleeing Spanish government debt as rapidly as it can, forcing yields to the 7.3% area, which is beyond the point where the Spanish government can continue to pay interest from its own revenues without severely cutting back on domestic expenditures. The same situation is playing out at the local level in Spain: Andalusia and other provinces have been besieging Madrid for help in meeting the interest burden on their own debts. There is also talk that medium to small size Spanish commercial banks are out of liquid collateral, and are unable to meet further collateral calls on the global markets.

The Story of Citigroup's Extraordinary Financial Assistance

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SIGTARP released a new audit report, Extraordinary Financial Assistance Provided to Citigroup which should shock and awe.
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Citigroup was bailed out in November 2008, with $20 billion dollars plus $301 billion in asset guarantees. Now the Special Inspector General of TARP has gone back and done an audit, a forensic accounting of what really happened.

It appears Citigroup poses systemic risk was just screamed from the roof tops like Chicken Little and the solution was to throw money at it. No one bothered to check if this was even true, that Citigroup presented a systemic collapse of the global financial system if it failed. Even worse, while systemic risk is so complex, kind of a domino theory of multi-dimensions, yet to ascertain the possibility, it was implied why bother? From the report:

First, the conclusion of the various Government actors that Citigroup had to be saved was strikingly ad hoc. While there was consensus that Citigroup was too systemically significant to be allowed to fail, that consensus appeared to be based as much on gut instinct and fear of the unknown as on objective criteria. Given the urgent nature of the crisis surrounding Citigroup, the ad hoc character of the systemic risk determination is not surprising, and SIGTARP found no evidence that the determination was incorrect.

COP Report on AIG and Congressional Hearing with Geithner

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The Congressional Oversight Committee released a report on AIG last week. But before we get into those damning facts, check out the below video clip of Elizabeth Warren trying to confront Timothy Geithner on the failure of HAMP. Notice how 1 million people losing their homes goes in one ear and out the other as Treasury Secretary Geithner rambles on in response.

 

 

BlackRock - Friends in High Places

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Laurence Fink, CEO of BlackRock appears to have guided his company through the minefields of the 2007-2008 financial collapse and emerged a well-positioned entity.

In fact, on June 11, 2009, BlackRock signed a deal with Barclays that according to Bloomberg, “creates a company overseeing $2.7 trillion in assets, more than the  Federal Reserve.” Also recently, BlackRock  beat out PIMCO to be one of nine managers of the Treasury’s P.P.I.P. 

Can we attribute Fink’s achievements to stellar stewardship, pure luck, or political connections?

Geithner announces plan to regulate derivative trading

Treasury Secretary Timothy Geithner just announced that

Today, ... the Obama Administration proposes a comprehensive regulatory framework for all Over-The-Counter derivatives.

Moving forward, the Administration will work with Congress to implement this framework and bring greater transparency and needed regulation to these markets. The Administration will also continue working with foreign authorities to promote the implementation of similar measures around the world to ensure our objectives are not undermined by weaker standards abroad.

Unregulated, un-reported, and un-collateralized derivates are a huge part of the reason behind the biggest financial crisis since the Great Depression in which we find ourselves.

I have been very critical of President Obama and Secretary Geithner previously for their kowtowing to banksters, but the framework unveiled this afternoon is Big News, and it is (yes, truly) Good News. The text of the announcement and some instant analysis below.

Bankruptcy Law is Key to Obama's Foreclosure Fight

by Zach Carter, Media Consortium MediaWire Blogger

President Barack Obama unveiled his administration's plan to fight foreclosures on Wednesday. Unfortunately, the most important element of the program will require Congressional action—and the banking and business lobbies are already on the attack. The Homeowner Affordability and Stability Plan has three chief components:

Weekly Audit: Geithner's Terrible, Horrible, No-Good, Very Bad Bailout

by Zach Carter, Media Consortium MediaWire Blogger

In this week's Audit, we're examining Treasury Secretary Timothy Geithner's thoroughly uninspiring bank bailout plan, which fails on almost every level. What's more, some of the most insightful (and stinging) critiques of the proposal are coming from progressive media.

Weekly Audit: Welfare, Work and the Bailout Bonanza

by Zach Carter, Media Consortium MediaWire Blogger

The U.S. economy lost nearly 600,000 jobs in January, bringing total losses in the past three months over 1.5 million—more than the entire population of Philadelphia. If there ever was a good time to mend the tattered U.S. social safety net, it's now. While unemployment benefits and food stamps remain relatively uncontroversial, basic welfare continues to be neglected by the general media and vilified by the right. And as of this moment, a responsible welfare program is needed more than at any point since the 1930s.