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Tag Archives: Treasury

Want $20 million to work for the government? Just quit a Wall Street job first

Some Senate Democrats are (rightly) taking on the President over his nomination of Lazard’s global head of investment banking, Antonio Weiss, for Treasury undersecretary. Part of the problem is that Lazard is going to pay the guy $20 million in a bonus if he takes the job in government.

Now why would a global investment bank pay a C-level employee $20 million to go work for the government?

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Fresh Doubt Over the Bailout of A.I.G.

As I’ve said before, the Fall of 2008 is seared into my brain. I remember the exact moment when I heard that Greenspan said we were looking at a “once in a century” financial crash. I remember Lehman going down. I remember Goldman being saved. I remember when AIG which reinsured much of Wall Street was commandeered. I know it was a dark time for everyone but trust me, in the financial sector it was absolute insanity.

One could feel how fast and loose things got all of a sudden. In the “Great Blackberry Panic” as David Stockman refers to it, the rules were thrown out the window. The Fed did what it wanted. The Treasury did what it wanted. And in the chaos Wall Street saved itself at the expense of the rest of the economy. Fall 2008 on Wall Street was a cocktail of desperation and opportunism.

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Tim Geithner is no hero, no matter how many times he says that he is one.

TARP was the absolute height of crony capitalism. Many of the big banks should have gone down, but in the midst of a “Blackberry panic” – as David Stockman puts it – the masters of the masters of the universe lost sight of reality and the nature of markets. Yes, Goldman Sachs would have gone down. But this would have been a GOOD THING. The blood which should have filled the the streets of Downtown Manhattan would have washed the unsustainable leverage clean from the system (for a while). Giants are meant to fall. It would have been good for the economy.

It would have been terrible for Wall Street of course. Banks, livelihoods, careers, and reputations hung in the balance that fall of 2008. For the bankers the world was indeed ending. So in a selfish act of desperation they forced the American public to save them.

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WSJ Book Review: ‘Stress Test’ by Timothy F. Geithner

According to this review Mr. Geithner thinks quite a lot of himself. He takes credit (credit?) for the lion’s share of the TARP bailout, which he sees as a success and not as many have come to see in the years since, an overreaction to a meltdown brought on by easy money which fundamentally undermined our economy.

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Geithner met with Obama just before warning S&P that the debt downgrade by the company would be met with a “response” from Washington

In January Bloomberg reported that Tim Geithner called the CEO of Standard and Poor’s after the company downgraded US debt to explain that the move would have “ramifications” for the company. Now S&P finds itself embroiled in a lawsuit driven by the Justice Department which S&P says is punishment for the downgrade. Read More

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