Time for Mr. Geithner to bow out
Geithner’s new plan to save the banks is a sham. It would convert the taxpayer’s stock in banks from preferred to common equity. This would do two things:
1. Screw over taxpayers by converting their safer and dividend-paying preferred stock into common equity. Less return and more risk for us. Banks have to pay out less dividends.
2. Artificially make banks balance sheets look healthier, because of the way preferred and common stock are treated on balance sheets.
More financial wizardly isn’t what we need right now, as Henry Blodget notes. And this deal screws the taxpayers even worse than Geither and the boys already have. If you’re thinking, “hey, wait! Geithner’s only been in office for 100 days”, keep reading. Geithner has been a key player in orchestrating these bailouts from the get-go.
Way too close to the banks
Dealbook’s piece last week blew the lid off Geithner’s extremely close ties to the financial industry. It also exposed some of his more embarrassing and ridiculous proposals, quotes, and philosophies. Here are some of quotes:
the government has to take risk, and we are going to be doing things which ultimately — in order to get the credit flowing again — are going to benefit the institutions that are at the core of the problem
That statement is unforgivable. He is simply not asking enough sacrifice from banks, and making taxpayers shoulder the entire burden. A lot more haircuts need to happen (or be wiped out if necessary): common equity, bondholders, and overpaid executives.
Forget the taxpayers, guarantee everything
As President of the NY Federal Reserve, Geithner “proposed asking Congress to give the president broad power to guarantee all the debt in the banking system“, according to the Dealbook article. The proposal was largely dismissed at the time as being too risky for taxpayers. But since then the taxpayer has guaranteed around $9 trillion risky assets. Geithner, either as NY Fed Pres, or Treasury Secretary, was instrumental in all of this. From the start, he has been one of the architechts of this transfer of wealth from taxpayers to banks. He is very much a part of the problem.
Time to seek employment elsewhere, Tim Geithner. William K. Black or Simon Johnson will make a fine replacement for you. If Lloyd Blankfein gets tapped to replace him, I may consider taking up residence in Antartica.
Pic by Drew Friedman
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The unconstituional 1913 Federal Reserve Act, creaeing the Bauer-Rothschild private ownership, must be repealed and U.S. issue its own currency by its own Central Bank. Timothy Geithner AS director of New York Federal Reserve, Bilderbergers-Council On Foreign Relations members Lawrence Summers, former Treasury Secreary, Henry Merrit Paulson, Benjamin Shalom Bernanke, Chartles Christopher Cox (SEC) – are all in violation of Securities laws, specifically SEC Rule 10-b-5 and must be criminally prosecuted for a) causing repeal of the Glass-Steagall Act in 1998 signed by Bilderberger President Clinton, and b) for criminal non-disclosure in forcing Ken Lews, President of Bank America to buy Merril- Lynch under threat by Bernanke of being forced out of Bank America presidency. It is outrageous and unlawful for a private citizen to exert undue influence in the U.S. banking industry at a time when the U.S. taxpayers own America International Group and controlling shares in Bank America, both recipients of billions of dollars in U.S. taqxpayer bailout funds. Shaeholder lietigation is now in progress (See Bloomberg, L.P. vs. Boartd of Governors Federal Reserve, filed March, 2009 in Federal District Court, Souther District New York).