Tag: Timothy F. Geithner

Dec 24 2009

Goldman Sold Bad Debt Bet Against It And Won

According to the NYT, Goldman Sachs and other banks sold their customers collateralized debt obligations, or C.D.O.’s, and then bet heavily that these investments would fail.

Goldman Saw It Coming

Before the financial crisis, many investors – large American and European banks, pension funds, insurance companies and even some hedge funds – failed to recognize that overextended borrowers would default on their mortgages, and they kept increasing their investments in mortgage-related securities. As the mortgage market collapsed, they suffered steep losses.

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

The woeful performance of some C.D.O.’s issued by Goldman made them ideal for betting against. As of September 2007, for example, just five months after Goldman had sold a new Abacus C.D.O., the ratings on 84 percent of the mortgages underlying it had been downgraded, indicating growing concerns about borrowers’ ability to repay the loans, according to research from UBS, the big Swiss bank. Of more than 500 C.D.O.’s analyzed by UBS, only two were worse than the Abacus deal.

http://www.nytimes.com/2009/12…

Lewis Sachs, left, who oversaw C.D.O.’s before becoming a Treasury adviser (ie he works for Geithner now) , and John Paulson, whose company profited as the housing market collapsed.:

So, basically, not only are we not regulating these guys, we’re rewarding them– and more importantly promoting them into the government to run the show–where they presumably steal directly from the US Treasury.

How is this different from what Mussilini had in mind as a system of government? Such a constant revolving of government, military, and corporate figures, that the lines are entirely blurred.  

Apr 29 2009

Geithner; Gold on the Hill

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copyright © 2009 Betsy L. Angert.  BeThink.org

Today, Timothy Geithner garners much attention.  Initially, when introduced on the national scene, people pondered; “Who is he?” The former President of the Federal Reserve Bank of New York has an impeccable résumé.  Some said his record speaks for itself.  Average Americans might have admired his ascendancy. Taxpayers could have appreciated that a man of his age would wish to manage the complexity of the United States coffers.   Countless may have considered the enormous challenge he accepted; yet, not comprehend, for Secretary Geithner, this may have been the plan.

Early on, Treasury Secretary Timothy F. Geithner had his sights set high.  As a child, born to an affluent, and influential family, he learned that all he desired could be his.  He saw the potential for power in political prospects.  The practicality of a profitable purpose also was apparent to Tim.  When a lad, there was no reason for Timothy to reflect on the concrete pavements beneath his feet.  Geithner would not have supposed he would work as a laborer.  Nor had he likely seen himself as one among the swarms of ordinary citizens.   His personal history may have helped him to know, he would not have to pound the streets to seek pennies for his pocket.  Unconventional as his life had been, Timothy Geithner might have imagined as others did; he was destined for greatness.