Geithner Loses It After Bair Refuses To Yield Power To Fed
It seems the Secretary of the Treasury forgot to take his Xanax on Friday. The WSJ reports that "Timothy Geithner blasted top U.S. financial regulators in an
expletive-laced critique last Friday as frustration grows over the
Obama administration's faltering plan to overhaul U.S. financial
regulation." Presumably the source of Geithner's ire was Sheila Bair's (and probably Mary Schapiro's) unwillingness to yield power over to Bernanke.
Among those gathered in the Treasury conference room were Federal
Reserve Chairman Ben Bernanke, Securities and Exchange Commission
Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman
Friday's roughly hourlong meeting was described as unusual, not only
because of Mr. Geithner's repeated use of obscenities, but because of
the aggressive posture he took with officials from federal agencies
generally considered independent of the White House. Mr. Geithner
reminded attendees that the administration and Congress set policy, not
the regulatory agencies.
If Geithner gets so worked up over a couple of powerless agencies giving up their turf to an already overlordish Federal Reserve, one can only imagine how JPM's SPY traders must dread any caller ID starting with 202 on one of those rare down days or why Wen Jiabao knows never to allow indirect interest in Tsy auctions to drop below 50% going forward.
On a more serious note, this begs the question: is the SecTsy finally losing it and why? Or, in a Machiavellian ploy of sinister brilliance, did Larry Summers orchestrate all of this by turning off CNBC access at the U.S. Treasury, in hopes of creating a brief but deadly Western standoff between his adversaries (all of them)? If nothing else, it would explain the cable station's increasingly declining viewership.