Did Tim Geithner Leak Every Fed Announcement To The Banks?

Tyler Durden's picture

On August 17, 2007, the Fed's Board of Governors announced a key change to primary credit lending terms, whereby the discount rate was cut by 50 bp — to 5.75% from 6.25% — and the term of loans was extended from overnight to up to thirty days. This reduced the spread of the primary credit rate over the fed funds rate from 100 basis points to 50 basis points. News of the emergency measure was supposed to be kept secret from market participants as it was substantially market moving. It wasn't. And just when we thought our opinion of the outgoing Treasury Secretary and former NY Fed head Tim Geithner, whose TurboTax incompetence is now legendary, couldn't get lower, it got lower. Much lower.

From the August 16, 2007 transcript (page 13 of 37) of the conference call preceding this announcement.

MR. LACKER. If I could just follow up on that, Mr. Chairman.




MR. LACKER. Vice Chairman Geithner, did you say that [the banks] are unaware of what we’re considering or what we might be doing with the discount rate?




MR. LACKER. Vice Chairman Geithner, I spoke with Ken Lewis, President and CEO of Bank of America, this afternoon, and he said that he appreciated what Tim Geithner was arranging by way of changes in the discount facility. So my information is different from that.


CHAIRMAN BERNANKE. Okay. Thank you. Go ahead, Vice Chairman Geithner.


VICE CHAIRMAN GEITHNER. Well, I cannot speak for Ken Lewis, but I think they have sought to see whether they could understand a little more clearly the scope of their rights and our current policy with respect to the window. The only thing I’ve done is to try to help them understand—and I’m sure that’s been true across the System—what the scope of that is because these people generally don’t use the window and they don’t really understand in some sense what it’s about.

At least we now know who the bankers' mole on the FOMC was before, as gratitude for his services, he was promoted to Treasury Secretary of the US. Because if he leaked one, he leaked them all.

h/t Manal

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Say What Again's picture


He won't even see the inside of a court room.

Forget about being sent to jail!


ACP's picture

Speaking of lies and manipulation, AAPL closes @ 500.00, the minimum price allowed by the Fed.

Say What Again's picture

Stop Running...

The new Olympic sport!

Careless Whisper's picture

If Ken Lewis knew about it, then Jamie Escobar and Lloyd Corleone got the word also.

Zer0head's picture



Shit!!! He won't even see the inside of a court room.

no, the only thing he'll see is Opraha's FatAss in the chair across from him


SafelyGraze's picture

it isn't a leak when it's a briefing

note to lance: learn to talk more like tim. timtalk. timspeak. geithcant. treajargon. 

BoNeSxxx's picture

I miss the days when this shit used to surprise me... I really do.

knukles's picture

That it happened does not surprise me.
The magnitude of the crime, however, is astoundingly large.
Like the big lie, the big crime.
About which nothing shall be done.

An indictment the entire fucking system.  Which we all need to see and hear, again and again, or it becomes lost in the minor crimes... and the argument of the unrelated minutiae.

Mind-boggling in its entirety.

Fish Gone Bad's picture

The Fed is composed of all the big banks.  They already make money out of thin air, is this really a surprise?

eatthebanksters's picture

Why is this news to anyone?  Old Timmeh knew about the Libor manipulations while he was at the NY Fed and kept it to hmself.  Kyle Bass said it best...the government's job is not to tell you the truth (especially after they fucked everythng up) it's to keep you confident.   

Ain't that a bitch?

SGS's picture

Jew out, Jew in.  Another 4 years, then repeat again.  Good luck Mr Lew.

James_Cole's picture

"Speaking of lies and manipulation, AAPL closes @ 500.00, the minimum price allowed by the Fed."

Speaking of lies and manipulation, AAPL closes @ 500.00, the exact price demanded by options.

There I fixed it for you.

CPL's picture

HOly fuck...I have NEVER seen that happen ever.  That's like winning the lottery twice in the same day.  

Or playing your own options against yourself because no one else is playing with you anymore so it will always rise to your own counter bid from a dummy trade account. 

old naughty's picture

They all knew.

Mr. Larker is not a Club member...

We just find this out...hidden in plain sight !


Joe Davola's picture

Lacker was just giving them a glimpse of his trump card - if he had any balls, there'd have been a leak...

Wait a minute dumbass, who's he gonna leak it to, no one in the media (who didn't want to be labeled a kook) would do anything with it.  Note to self, quit being such a dumbass.

old naughty's picture

Every dumbass has its moment of smartass...

Didn't you see Tyler's photo just below the subjet line?

He is 'think'ing to Mr. Larker: "Thanks ten millions, my "Years with the US Treasury" will sell like hotcakes"

"Lie Yo Me" lies himself, all the time, no?


Oh, you didn't call him dumbass...


So, scum-bag of millions.

Harlequin001's picture

The Government has a simple choice, it can either allow the banks to rip you off any way they can and make 'profits' or they can sell bonds and bail them out. They certainly aren't going to shut them down, so which do you think they choose?

It isn't that difficult really is it? in fact the only difficult thing to work out is why people have anything to do with the banks whatsoever any more.

James_Cole's picture

Paying some guy at the wsj to write a hitpiece for a Sunday night dump, $10k.

Paying a few guys to reblog said wsj article, $50.

Friday close @ 500.00, priceless!

moroots's picture

The next time the Fed behaves in the interest of the public will be the first.  It does what it is designed to do - protect and insulate large banks.

The public has been duped by so-called academics like Krugman into thinking there is some vast science or you need a PhD to understand what they do.

It's not hard - they print money and they protect the ability of their constituent banks to print money.  That's basically it.

SMG's picture

Not  Jewish, Luciferian.

a growing concern's picture

You know what I miss?  6 point two five fucking percent interest rates.  Jesus H Christ in a chicken basket, I'd kill for that.  You know, instead of the .0001% my savings account currently pays me.

ForTheWorld's picture

What do you need to save money for? Spend up big on credit, where the interest rates just keep rising!

donsluck's picture

Hell, I get 10,000 times that in my liquid CD (1.0%)!

max2205's picture

It's your stealth tax no one wants to publicly admit.

Tax...I mean theft. Goes right to banks and EBT FOLKS.

REBEL against the wall

WmMcK's picture

+1 - But be careful what you wish for.  6.25% can  double quickly.

But mortgages will be 17% again like in 1980.

And there will be no Volker next time.

unununium's picture

> And there will be no Volker next time.

Oh yes there will.  This is a supercycle, not an implosion.

trav777's picture

there ain't shit out there that generate that yield for you.

Maybe brazil?  Colombia?  Take some risks I guess.

monoloco's picture

The way they are stacking the deck, the USSA is resembling a 3rd world banana republic more everyday.

knukles's picture


We have already arrived.

Blano's picture

I use the phrase "3rd world shithole."

And as knuckles said, we're already there, not on our way.

SafelyGraze's picture

"If Ken Lewis knew about it, then Jamie Escobar and Lloyd Corleone got the word also."

Here's an instance of at least two experienced reporters who tiptoed to the edge of the truth and didn't quite believe where their reporting took them.

The story was too important to let the absence of verifying facts get in the way. Just like investors all over the world, the reporters and their peers wanted the no-federal-reserve-tips-to-bankers story to be true.

verum quod lies's picture

Like Lacker not knowing, it depends on two things: (1) if you are a goy or not, and (2) if you are in control of a large bank or not. In short, the only goys in the know are those nearly extinct birds in charge of a large member bank. Goy Fed heads like Lacker will be the last to know as they have no value to their/your overlords. From that exchange, it honestly seems Lacker doesn't understand the game being played (maybe Lewis didn't either, but due to his position he will be informed ahead of time, unlike Lacker who will only hear when it is absolutely necessary to carry out his orders).

nope-1004's picture

Takes ZERO aptitude to be a successful insider.  Geithners' free citizenship label is TAX EVADER.  His Treasury Secretary label is LIAR.

Where there is smoke, there is taxpayer fraud.

In America, stealing from taxpayers gives you the label "Honorable".  What a joke !!  No wonder the financial world is crumbling.... it's being run by complete frauds !!

Geithner - what a loser.


Chupacabra-322's picture

@ nope-1004,

"No wonder the financial world is crumbling.... it's being run by complete frauds !!"

No, its run by the Global Criminal Cabal Crime Syndicate.

nope-1004's picture

And they aren't fraudsters?  lol..

Chupacabra-322's picture

The whole Global Economic System is built on Criminal Fraud.  Run and engineered by The Global Criminal Cabal Crime Syndicate run out of the City of London of which Wall Street is just an extension of. 

Carl Spackler's picture

Our only hope is civil litigation against Geithner.

Hmm, I  wonder if Timmy also played a facilitative role in the widespread LIBOR scamming?

knukles's picture

Yes, that is already public record he was aware of the misdeeds.

unununium's picture

... and Tim had a central role in the taxpayer payoff of Goldman that was the AIG "bailout".

socalbeach's picture

I wonder if Geithner supports gun control for the plebs ?

Cash2Riches's picture

This doesn't surprise me at all. Just about the whole financial world is a ponzi scheme.

Keep Stacking Gold and Silver. Protect your wealth.

Chuck Walla's picture

Well, he wasn't going to get hIs next job from Joe the Plumber.


yogibear's picture

APPL, NY Fed's (WIlliam Dudley) favorite stock.

The Fed banks can just sit on the shares.


Snakeeyes's picture

Geithner CONSULTED WITH MAJOR BANKS before makig any decision. 

mr_T's picture

Timmy part of the ..Can't touch this club...
Not to be mistaken with the TBP Club .. too big to prosecute

Kaiser Sousa's picture

"He won't even see the inside of a court room."

and ultimately that is the fault of the citizenry...

why he should b allowed to take another breath?????

nothing will change until the bankers r made to pay with their lives....

n the mean time, off to see my Silver guy....