Geithner: "Leave Banks Alone!!"

PragmaticIdealist's picture

Yesterday, Geithner sat down with the WSJ to categorically set the record straight over rising unwashed populist concerns regarding skyrocketing Wall Street compensation and profits.

Some notable excerpts:

"I don't think the financial system is reverting to past practice, and we won't let that happen," Mr. Geithner said. "The big banks are running with much less leverage now, much more conservative liquidity cushions, there's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up. And the weakest parts of the system don't exist anymore."

Translation: we have wasted trillions of taxpayer dollars in propping up the balance sheets of zombie banks. We have also printed lots of fresh money to give the big banks a safety cushion for when their next malinvestment (i.e., CRE) black holes come to light. We are paying banks lots of money to not lend money to the bankrupt American home owner or over-leveraged corporations.

Ergo, the financial system has stabilized.

Oh and don't worry about future inflation, we will soak up all the excess money and lending capacity by paying banks even more money not to lend money.

"Some banks, including those that received government bailout money, are earning record profits, increasing pay and ramping up risk. Goldman Sachs Group Inc., for instance, recently recorded its most profitable quarter ever and boosted its degree of risk-taking as measured by how much money it could lose in a single day."

Translation: My buddies have been successful in selling the 'reinflation trade' to the stock market and have wildly profited off trading the volatile swings that have been produced by my other buddies at the Fed.

Mr. Geithner said a functioning and profitable financial system was a "necessary precondition to a stronger economy."

Translation: Although placing a long bet on Financials and a short bet on general equities would have yielded an annualized 16% return between 1986 and 2006, I am positive that a widly profitable financial system remains a precondition of a strong economy. Surely, subsidizing the hell out of an already dominating financial industry will result in future gains for a rapidly deteriorating "main street," right? Come to think of it, we should all become bankers and just lend money to each other. Imagine how many green shoots that would fertilize.

"Mr. Geithner said the financial-services sector needs better oversight and tougher rules if the U.S. is to avoid a repeat of the financial crisis. He said the administration's proposed regulatory revamp would offer better protection with the Federal Reserve overseeing the country's largest financial firms, a new regulator for mortgages and credit cards, and tougher oversight of credit derivatives and hedge funds, among other things."

Translation: Once Obama and I manage to implement most of the health care, auto industry, alternative energy and housing takeovers debacles chicanery highway robbery action plans, we will try to push our now-floundering and probably ineffective Wall Street regulation legislation through a jaded congress.

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Timmy Geithner's picture

I apologize for being such a dishonest dumbass.  Timmy!

Anonymous's picture

"Gentlemen should not read other peoples mail"
Objections to intercept and decoding pre-World War 2

Miles Kendig's picture

The best comedy is premised upon the acts of stupidity the audience sees before it.

Excellent PragmaticIdealist

MinnesotaNice's picture

That was just great... enjoyed it thoroughly...

Anonymous's picture

more parsnips
less bailouts

bpj's picture

"The more I see of the moneyed classes, the more I understand the guillotine."

 

George Bernard Shaw

ToNYC's picture

Awesome!!....another great find in plain sight.

Thank you ZH for your rich set of contributors and observant comments.

Andrei Vyshinsky's picture

If anyone is left doubting whether Geithner is a wholly owned subsidiary of the financial interests, this interview will bring an end to it. It will much simplify the task of his interrogators in advance of the coming show trials. Rather than the supercilious defiance exhibited here, look for a much more subdued and humble Timmy, one even prepared at trial to recommend a harsh justice for himself. Worms like Geithner will be found plentiful as the people proceed with the dismantling of the structures that have made possible the theft of their democracy. One day the word, "lobby", will come to mean antechamber once again.

stopthespending's picture
stopthespending (not verified) Aug 18, 2009 7:52 PM

good commentary

sleazy linking practices; borderline fraud ..http://www..
hat tip: gay porn and deceitful, slimy operators

Anonymous's picture

The big banks are sucking the last bits of blood from the nation, and Geithner is doing everything in his power to help them. He sucks.

waterdog's picture

Great job of translating. If the banking system is so good, why did he say he was going to blow through the $12 trillion debt ceiling in October?

Anonymous's picture

Turbotaxcheating Tim the Pirate: Bankster

Fox in the henhouse

Apocalypse Now's picture

I don't trust anybody without eyebrows.

Cheeky Bastard's picture

LMAO; awesome. thanks for the laughs

Anonymous's picture

Hey Geithner, LEAVE GOVERNMENT ALONE.

How about some of you money printing elites try life outside the government-- in a FREE MARKET.

Anonymous's picture

Turbotaxcheating Timmy is a looting piece of shit. This episode makes me hope there really is a hell so that these scumbags can wind up there. It'd be nice if before then he wound up in prison.

Gordon_Gekko's picture

Goddamn Geithner man! The nerve of this guy! I mean considering all the guns and ammunition in America, I am surprised this cockroach is still alive.

Econofresh's picture

You could short all those big banks... If you believe America is unable to organize a big coverup... I think being on the LONG side, is the winners side.

Anonymous's picture

long criminality..... you suck

Anonymous's picture

Karl Denninger & Bill Black for Pecora v2.

As Karl puts it:
STOP THE LOOTING AND START PROSECUTING.

StilesBC's picture

Actually bank leverage ratios in the US, Europe and UK have risen in the last year - not fallen.  Try again T3.  

Anonymous's picture

You have great career ahead as a satirist if you choose to do so.

Anonymous's picture

+1

Veteran's picture

Fuck Geithner and Summers.  The hubris is astounding

Ducky's picture

They are cleaning up their balance sheets by marking asset values to whatever they like. If things were fine they would be paying those 5% dividends again.

Steak's picture

Amen to that.  Providing outsized returns to a handful of execs is called essential for the survival of the company, while the same execs and regulators say increasing the dividend would erode the financial position of the company.  To call it perverse only scratches the surface of how rotten to the core our system has become.

dcb's picture

The only way these assholes do anything is with populist concerns. otherwise we are just left to suffer.

ToNYC's picture

A fool and his money are soon parted. Geithner has been boning up on his TViewing and knows his audience.

Fish Gone Bad's picture

I thoroughly enjoyed this!  Thanks.

stopthespending's picture
stopthespending (not verified) max2205 Aug 18, 2009 7:52 PM
Anonymous's picture

These house keeping jobs are for the shareholders.
The astounding lesson is that they are happy to be
robbed.
The strategy and compliance is for the board members
the not so surprising outcome is that they ignorant.
Happy days are here for ever