The Reason For Geithner's Weekend Media Whirlwind Tour: White House Learned About S&P Downgrade On Friday

Tyler Durden's picture

And for the most unsurprising news of the day, Reuters reports that the White House has admitted it knew about the S&P rating action on Friday. Which means that all the key bond buyers (or sellers are the case may be, Pimco), knew at roughly the same time what the key market catalyst on Monday would be (we can't wait to get a declassified glimpse of Larry Meyer's phone log over the weekend one day in the future). Which also means that today's action was a strawman in which the big boys merely waited for an opportunity to buy bonds are lower prices, which the ongoing European collapse merely facilitated. Most importantly, it is now all too clear why over the weekend, Tim Geithner's face, instead of being hard at work at finalizing his tax filing, would grace each and every TV screen. Advance damage control, TurboTax style.

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mynhair's picture

Hammer those long end yields!

redpill's picture

10 year derivative puts, bitches!

What does it all mean's picture


I posted the following earlier in the gold "explosion" thread...  All of this is political... and the only thing is clear is that Fed won't be able to have a QE3 and is ready for a necessary hike... just like the Chinese did.  (What?  You don't think we spoke to our biggest debtor before we gives the S&P okay to outlook differently?)


Just wondering if Goldman Commodities desk got the first heads up?


Could it be the Chinese?  Raising their reserve for the 4th time, this year?  Or that the Fed effective has a license to hike rates (channel through S&P... there is just NO WAY that the treasury/Fed/White House did not know about this "outlook" in advance.)


Pretty smart though, getting the beated stepchild (S&P, Moody and even Goldman) to do the dirty job for them.


It is all politics, if gasoline is above 4.5 over the summer, Obama won't get elected in 2012 and it's not like anybody from Republican party and/or Tea Party really wants the job...


By the way, where is the news on Citigroup earning drop by 32%?


Verstehen's picture

They are QEasing since 1914. It will never stop. Who cares about lets say a 1% hike when inflation is 10%. The dollar is dropping like a stone and with him all pegged currencies. Theres only one conclusion: THEY ALL ARE PRINTING.

Qatar, Kuwait and Vietnam depegged recently.

I do not know if the swiss franc and aussie dollar are pegged but both have risen 30%.

What does it all mean's picture

True, since 1914, the founding of the Fed, they have been printing... But a 1% hike will be significant, like it or not.

I agree that it is moot, given another 90+ years from now, but like what the tagline says.. Over a long enough time line, it is all meaningless.  What matters is the here and now.  (plus/minus 2 years.  That is long enough for me.)

Verstehen's picture

From the Bernanke 0 to the Greenspan 1 is an improvement. lol

Bicycle Repairman's picture

The FED will hike rates slowly, and will stay well behind inflation.  Real interest rates will remain negative for a decade or more.  Gold may react negatively at first, but BTFD as gold will continue to rise.  This is the 1970s scenario all over again.  However this time it will last much longer.

Bringin It's picture

Re. However this time it will last much longer.

Agreed.  This time there is no Volker solution.

redpill's picture


Appropriately pronounced "queasing" I assume.  Sure as hell makes me queasy!

nedwardkelly's picture

The market drop today just seems more of the same circus...

Who actually looks at the S&P rating as anything of any value? Didn't they prove with all the CDS/CDO/TLA ratings that generally their ratings were only good for something after the fact?

whatsinaname's picture

I did not know that he filed his taxes.

What does it all mean's picture

He runs IRS, talk about irony...  It's sad... at least Paulson (Hank) had managerial experience... if you watch the Meet-the-Press interview, Tim G. is probably not going to be there next term...  Maybe he will run BofA or Citi, it would be funny if he runs AIG... 


Cole Younger's picture

"only good for something after the fact?" so in other words, they should have down graded the U.S. future some months ago, and actually lowered its credit today?

nedwardkelly's picture

No, sorry poorly worded.What's their use when their ratings are lagging indicators. Does the rating change today tell you anything you haven't already known for some time?

SheepDog-One's picture

Fair and unfettered market efficiency on display. Everything is known by the top .01% a few days ahead of release. Yea, you retail can really outsmart them.

Matxeu's picture

And a nice expiration date to boot.

Mike2756's picture

You got it! The fix is in!

Hard1's picture

That's the reason the market was slightly lower on Friday's close....Turbo Timmay and friends front-running the news on their PA's.

TG: Shorting treasuries?  No that's a bad idea, Ben will take care of that....yeah and the dollar too, just short the S&P and go long VIX on your online account.  Of course it is not in my name, It's in the name of GoldenElf666.

NOTW777's picture

institutionalized crime and fraud. its ok if they do it.

MaxVernon's picture

and how is this not insider trading?

Dr. Richard Head's picture

Because insider trading is for the INSIDERS.  We are on the outside looking in. 

carbonmutant's picture

It's only insider trading if the SEC enforces it...

alexanderstollznow's picture

"and how is this not insider trading?"

that would be because there is no evident trading. all you know is the White House was informed on friday.  the bit about anyone trading on the knowledge is more ZH rabble rousing. 

Financial_Guardian_Angel's picture

Guaranteed that this info got out Friday and was used to trade. Hundreds of conversations and they all started like this:

"Good afternoon, Goldman Sachs how can I direct your call?"

"Jim at the commodities desk please."

"This is Jim."

"Jim, it Rich at the White House. You owe me big-time!"

"Why?" says Jim.

"You didn't hear this from me, but I just learned S&P is downgrading future US credit rating."

"Wow, thanks for the heads-up! Right, I do owe you big time! Gotta go, need to meet with Lloyd asap. I smell a big bonus coming..."

Forgiven's picture

Scum sucking dirtbags.  The only way to deal with them is the one two punch of the gold and silver bullets, killing vampire squids for centuries.  Buy and hold bitches!

slaughterer's picture

I told Timmy to call me if this happened.  Now I missed a great short opportunity.  Thief!

bigdumbnugly's picture

yeah, he'll probably use that lame "i was in a bad cell area" excuse again on that one.

does timmah twitter?

slaughterer's picture

Tyler, get Timmy to twitter to ZH. We need his "tips."

gordengeko's picture

Lol, what makes you think this will be a btfd?

DavidC's picture

I'm a very stable minded man but I do sometimes feel the urge, if it were available, to want to hit Timmah in the face.


countryboy42's picture

I'd like to see him have his head smashed in by a lemon peel wrapped around a large gold brick.

topcallingtroll's picture

Just stop your medicines for a while. Slip into the warm embrace of a psychotic death wish. Or at least consider it....okey?

wisefool's picture

I know this is fightclub. But we do have some rules. If a guy taps out. the fight is over. And only two guys to a fight.

Right now timmy is fighting with how his legacy is going to be written in the history books. So knock off the physical manchurian encouragement and get back to the shiny metal physical encouragement. Again, even trolls like you have to follow the rules.

XenoFrog's picture

It's only insider trading when you don't have friends in the executive branch.

Urban Redneck's picture

Ken Lay might have a different opinion on that one, bit it's still Bush's fault.

lolmao500's picture

And insider trading is LEGAL for congress! Not kidding. It's an actual law.

RichardENixon's picture

No one thought you were kidding.

lolmao500's picture

Sorry, I'm used to talk to the sheeple.

glenlloyd's picture

geithner is just one of this ship of fools

topcallingtroll's picture

How did a.guy with asperger's disorder ever get to such a position. He must be able to carry a lot of water and later be willing to fall on his sword instantly to have earned that much respect from his handlers.

Whoa Dammit's picture


Geithner is one of the GMOs specifically created for elite governmental and/or financial service positions. Said GMOs are produced by splicing the DNA of a hyperactive Miniature Doberman lap dog into that of a human. The pointy ears are always a dead give a way.

<sarcasm/conspiracy theory humor>


Bicycle Repairman's picture

I believe Geithner's father hired Barry Soertoro early in Mr. Soertoro's career..

DR's picture

His wife is Jewish.


don't junk--I'm just funnin...

101 years and counting's picture

i think they have it backwards:  The White House notified S&P of the downgrade on Friday......after GS and JPM told the White on Thursday.

What does it all mean's picture

I agree, and the Chinese approved our scheme and decided to tighten over the weekend...

disabledvet's picture

this is nonsense that actually makes sense to me.  i mean "S&P's has said nothing we don't know already" but "in fact IT'S A BIG DEAL."  This is has "front-running" from market particpants all over it "while Uncle Sam runs around like a chicken with his head cut off."  Still--"the market really doesn't care" because "we already know prices are rising and we're getting zero on our savings."  Why not "start a rumor that the sun rises in the East then sets in the West"?  Of course then "you might be accused of something...."--you know "saying something with your words" kinda of thing.

Arius's picture

timmy can always turbo tax...if he makes another mistake...the worst thing it could happened it would be to become Vice president...look what happened last time he made a mistake...

I am Jobe's picture

Sure it works for him. How about the common man who went to State School?

Why pay taxes wehn one can print. Not sure why do we pay taxes anymore.