Geithner – From Zero to Hero?

Read this glowing piece on Tim Geithner from Marketwatch.  How disgusting.

I cannot believe, in anyone’s mind, that a three day stock market rally turns this insider cronie to some sort of market guru.  He’s had almost 3 months in office, and so far has come up with a half baked plan that is bound to fail.

Since when is making the stock market rise the job of the Treasury Secretary anyway?

Also, the author, David Weidner goes as far to bash the free market.  Here’s an excerpt:

The power grab is likely to stick in the craw of anti-government, free-market types who rightfully worry that Uncle Sam is overstaying his visit to Wall Street.

What they need to remember is that the government is not only an unwelcome guest; it’s a reluctant traveler. Wall Street’s despair is of its own making. Had it not threatened to bring down the rest of us with it, the government might have been justified in watching Citigroup and AIG burn in the same way it’s keeping General Motors Corp. and Ford Motor Co. a contained blaze.
Geithner finally seems to understand the delicate political tightrope he must navigate to push through his rescue plans. He must be tough on bonuses. He needs to protect the taxpayer. He has to be positive. That’s why he sold the plan’s details through multiple media outlets this week — and sold them well.

This is such a crock of lies that I cannot believe a financial website like Marketwatch would publish it.  He acts like the free market is responsible for all this, when it has been the actions of the Federal Reserve that fueled the fire.

The reason we’re still even talking about toxic assets is because the government got involved and now has no other path but to keep blowing through money.  If we had let the banks fail and the toxic assets be liquidated, we would have had a deeper, sharper downturn, but we’d already be pulling our way out of it.  The actions of Geithner, and his predecessor Paulson, have just prolonged the crisis and made it worse.

Finally, there is a big reason why Wall Street loves Geithner’s plan: it takes the toxic assets off their books and shoves them on the taxpayer.  The plan is great for banks and financial firms because it gives them a no-risk, all-reward proposition.  It’s like going to Vegas with $100, but if you lose, the casino will give you all but $7 of your money back.

Mark my words, the scandal of Geithner’s plan will be that the same firms strapped with these bad investments will sell them for above their real value and then buy them back for a fraction of that.

Before we put Geithner up on a pedestal, we need to really see how his plan is going to play out.  How will the assets be valued?  Who will buy them?  How long will this plan take to implement?  A three day stock rally is no reason for a parade, and this will all just be false hopes and empty promises.

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