Wednesday, December 31, 2008

Geitner - Summers = Obama Economy FAIL

Oh, and Happy New Year!

The New York Times has an article, so useful, which shows precicely when Larry Summers, with his co-conspirators Alan Greenspan and Robert Rubin tanked our economy.

In 1997, the Commodity Futures Trading Commission, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley E. Born, invited comments about how best to oversee certain derivatives. Ms. Born was concerned that unfettered, opaque trading could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it,” she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses. ... In early 1998, Mr. Rubin’s deputy, Lawrence H. Summers, called Ms. Born and chastised her for taking steps he said would lead to a financial crisis, according to Mr. Greenberger. Mr. Summers said he could not recall the conversation but agreed with Mr. Greenspan and Mr. Rubin that Ms. Born’s proposal was “highly problematic.”

And then, in 2008, due pretty much entirely to unfettered derivitive proliferation, our economy tanked. The same article, mentions, delicately, that
The Wall Street debacle that swallowed firms like Bear Stearns and Lehman Brothers, and imperiled the insurance giant American International Group, has been driven by the fact that they and their customers were linked to one another by derivatives.

As to Tim Geithner, he just handed over somewhere around $320 billion to a friends' company.
Tim Geithner, former President of the Federal Reserve, has been appointed Secretary of the Treasury. He's a protégé of Robert Rubin, who is now director and senior advisor of Citigroup. Luckily for Rubin, the government has-completely coincidentally-agreed to insure Citigroup against losses of upwards $300 billion. This is in addition to an allocation of $20 billion from the $700 billion bailout package, which followed an earlier $25 billion injection. Quite an expensive coincidence.
From Laney Tower.

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