Entry Event: Tim Geithner To Join Private Equity Giant Warburg Pincus

Tyler Durden's picture




 

When Tim Geithner announced his departure from the US Treasury in January, the only question was how long would it take the former NY Fed head to get a job with the only industry that he cared about as either a Fed or Treasury official: Wall Street. Tim did his best to diffuse such speculation with amusing stories about writing books, which were accentuated by his refusal to join the Fed chairmanship race. Why not? After all there was nobody that Wall Street would benefit more from as the head of the Fed than TurboTax Tim. Today, less than a year after his exit from public service, the answer has presented itself - Tim Geithner is joining private equity titan Warburg Pincus, his first private sector job in decades since working for Henry Kissinger early in his career.

The WSJ broke the story:

Former U.S. Treasury Secretary Timothy Geithner, one of the architects of the federal government's rescue of the financial system, is joining private-equity firm Warburg Pincus LLC.

 

Mr. Geithner, who has spent most of his career outside the private sector, said in an interview he plans to start in March at the New York-based firm, known for its role in buyouts of companies including eye-care firm Bausch & Lomb Inc., luxury retailer Neiman Marcus Group Inc. and stadium concessionaire Aramark Corp.

 

At Warburg, he will serve as president and managing director, not the kind of figurehead or advisory positions that public-sector figures often land after government stints. Mr. Geithner, 52 years old, is expected to work on mapping the firm's strategy and management, investor relations and on matters related to the firm's investments.

 

"When they approached me, they clearly wanted me to play a substantive role in helping them manage the firm," he said. Citing the firm's global reach and "low-key" nature, he said Warburg is "culturally very compatible with what I was looking for."

 

Warburg Co-Chief Executive Charles Kaye said Mr. Geithner will be "absolutely a full-time member of the partnership. He will very much be here every day." Mr. Geithner will report directly to the co-CEOs.

The revolving door into private equity is a staple for former government workers, who have worked on behalf of Wall Street, if not Main Street, for the entire careers, and upon their "reitrement" comes the time to get paid. "Earlier this year, KKR & Co. tapped David Petraeus, the former general and Central Intelligence Agency chief, to lead an internal team focused on macroeconomic forecasting and public policy. Former Vice President Dan Quayle and former Treasury Secretary John Snow work for Cerberus Capital Management LP. Carlyle Group LP has enlisted many officials from the Bush and Clinton administrations, including former Secretary of State James Baker III, in advisory roles."

How much would Tim Geithner get paid? It is not immediately unclear: "Warburg Pincus declined to discuss Mr. Geithner's compensation, but it said he would be a partner and invest in its funds." What is clear is that his all in comp would be order of magnitude greater than the paltry $190,000 he was getting when providing trillions in taxpayer funds to bailout the Wall Street oligarchy, among which firms like Warburg Pincus.

In the end, the narrative goes, it was a choice between a book and a job paying millions.

Mr. Geithner has long considered a career in investing once his days in Washington ended. He has been reluctant to take a job with any banks, which he once regulated, and views private-equity firms and other investment managers as different from the institutions he oversaw as New York Fed chief.

 

Mr. Geithner had been weighing job options while writing an account of the financial crisis, due out next year.

 

In August, Mr. Kaye and Joseph Landy, Warburg's other co-chief executive, reached out to Mr. Geithner through a mutual acquaintance. A series of meetings at Warburg's Lexington Avenue headquarters and Manhattan restaurants followed, Mr. Landy said.

The best news: since carried interest tax rates are as low as ever with the PE lobby prevailing as usual over the the hypocritical calls of the "Patriotic Millionaires" to raise income tax for the rich (if not so much tax on assets or carried interest) not even TurboTax will be able to confuse the $0.00 in the "amount owed" line.

In conclusion we extend our sincerest congratulations to Mr. Geithner. After all, injustice once again prevails, and the man who now documentedly leaked Fed secrets to Wall Street has finally gotten his comeuppance.

Recall from "Did Tim Geithner Leak Every Fed Announcement To The Banks"

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.

 

CHAIRMAN BERNANKE. Yes, go ahead.

 

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?

 

VICE CHAIRMAN GEITHNER. Yes.

 

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.

* * *

And now that he is no longer beholden to the "American People" it's truly time to get paid.

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Sat, 11/16/2013 - 11:07 | 4160396 mrdenis
mrdenis's picture

I guess this means he can go back to being a tax dodger as well........

Sat, 11/16/2013 - 11:17 | 4160416 Stackers
Stackers's picture

stadium concessionaire Aramark Corp.

 

So that is what they are calling monoply running ass rapers now ?

Sat, 11/16/2013 - 11:24 | 4160428 Obese-Redneck
Obese-Redneck's picture

This just in: ex-chief Kessler to join hedge fund security team called Sphinctus Reemus, whose main partner is Ted Nugget

Sat, 11/16/2013 - 13:27 | 4160575 Rick Blaine
Rick Blaine's picture

Good for Warburg...

I'm sure Geithner's honesty, people skills, and overall intelligence will serve them well.

He's a great man.

 

(Do I really have to put a "sarc" tag on that?)

Sat, 11/16/2013 - 13:38 | 4160594 eatthebanksters
eatthebanksters's picture

Let's see how long it takes him to fuck this one up...

Sat, 11/16/2013 - 13:55 | 4160616 Bastiat
Bastiat's picture

Little Timmy short pants gets his payday.

Sat, 11/16/2013 - 14:04 | 4160631 Say What Again
Say What Again's picture

Something tells me that most of his paycheck will be derived from Goldman Slacks.

That's why they call it the "derivative market."

Sat, 11/16/2013 - 15:21 | 4160757 knukles
knukles's picture

Wow.

Talk about the measure of the man

A second class Secretary of the Treasury ends up at a second tier buyout firm.
Reminds me of Neal Kashncarry form Treasury's TARP days (pre GS VP, which is not too illustrious as everybody buy Lloyd's secretary's dog is a VP at Goldilocks) gets sent to PIMPCO to head up an international equity team.
To which Billy Gross had to say; "You mean after all you've done for me, I have to deal with this shit?"

Poor Timmah, probably to be buried in a pauper's grave on Hart Island off NYC....

Sat, 11/16/2013 - 17:47 | 4161059 AldousHuxley
AldousHuxley's picture

second tier?

 

Warburg pincus founded by eric warburg

His father Max Warburg was director at MM Warburg & CO founded by his family in 1798.

The warburg family still owns the bank, so Pincus is just a New York shell of a branch of German dynasty.

Family includes Paul Warburg, the father of Federal Reserve.

 

Geithner is just working for the Warburgs who have purchased insider knowledge in US Treasury long term roadmap which will impact Warburg's international investments in Asia.  

They have been playing this game longer than Goldmans or the Morgans.

 

 

Sat, 11/16/2013 - 20:12 | 4161361 aVileRat
aVileRat's picture

Check out the Sigmund Warburg biography.

SGW lost alot of their prestige in the 1955 to 1970 restructuring of private capital. The Pincus merger took them out of the game for most of the 1980's and allowed KKR, Blackstone and Carlyle to make significant inroads into the old boys club via bootstrap finance.

 

Sat, 11/16/2013 - 21:38 | 4161427 AldousHuxley
AldousHuxley's picture

Yes Swiss bank giant UBS used to be called UBS Warburg.

The Warburgs are the other Rothschilds.

So ex-US Treasury official joins to manage Warburg wealth...just like ex-central banker Paul Volcker managed Rockefeller's wealth from Room 5600.

 

 

Sun, 11/17/2013 - 00:47 | 4161828 ajax
ajax's picture

 

 

 

"The Warburgs are the other Rothschilds."

Niall Ferguson wrote a book about Siegmund Warburg:"High Financier: The Lives and Time of Siegmund Warburg"

http://c-spanvideo.org/program/HighF

Will Geithner be asked to refrain from dropping his much celebrated F-bombs now?

 

 

Sun, 11/17/2013 - 10:05 | 4162185 failure to perform
failure to perform's picture

My thoughts exactly

Sat, 11/16/2013 - 19:59 | 4161306 Kirk2NCC1701
Kirk2NCC1701's picture

Well, at least Warburg is an Equal Opportunity employer and accepts workplace Diversity.  By hiring Mr. Geithner, it shows that it does not discriminate against someone for being a cultural or religious minority.

People usually get hired for at least one of these three:  Their ability, their Rollodex/connections, or Kinship.  So glad to see it wasn't the latter.  And I'm sure that his mother thinks he's "a nice boy"**

 

** Code for "He looks out for his own".

Sat, 11/16/2013 - 20:52 | 4161458 AldousHuxley
AldousHuxley's picture

The superelites usually hate their own kind due to superiority complex.

Sat, 11/16/2013 - 21:06 | 4161486 sun tzu
sun tzu's picture

I doubt they will let that incompetent weasel do anything more than use his government contacts to gain an advantage with inside information and dodging taxes.

Sat, 11/16/2013 - 11:26 | 4160432 thunderchief
thunderchief's picture

Scumbag!

Sat, 11/16/2013 - 11:30 | 4160439 john39
john39's picture

like a dog returns to its vomit... 

Sat, 11/16/2013 - 12:26 | 4160495 kliguy38
kliguy38's picture

I think that says it all +1

Sat, 11/16/2013 - 18:53 | 4161183 max2205
max2205's picture

What...he went to giant hairy penis? Head first I hope

Sat, 11/16/2013 - 12:03 | 4160470 nmewn
nmewn's picture

I'm shocked! Shocked I say, to find cronyism going on in the world of high finance!!!

Sat, 11/16/2013 - 23:38 | 4161737 Cacete de Ouro
Cacete de Ouro's picture

Tiny Timmy reminds me of a sad floppy Oscar Mayer wiener, for obvious reasons. I hear that he even sings this song in the shower every morning...take it away there Timmy:......

Oh, I wish I was an Oscar Mayer weiner,
that is what I'd truly like to be,
'cause if I were an Oscar Mayer weiner,
everyone would be in love with me.

Oh, I'm glad I'm not an Oscar Mayer weiner,
that is what I'd truly hate to be,
'cause if I were an Oscar Mayer weiner,
there would soon be nothing left of me.

(but then he thinks again)

Oh, I wish I was an Oscar Mayer weiner,
that is what I'd truly like to be,
'cause if I were an Oscar Mayer weiner,
everyone would be in love with me

Sun, 11/17/2013 - 04:11 | 4162010 chemystical
chemystical's picture

Irony that the man peddling bacon, pork hot dogs, and pork bologna was very likely jewish.  You might find some analyses that will say that the matter of his religion is unsettled, but the matter of his wife's (nee Stiglitz) religion is not unsettled, and at the time of their marriage it would be very unlikely for a gentile to marry a jewess.  After that we have mimicry of the host and crypto-Jew progeny.  One wonders what else you might be eating in addition to that putatively pork hot dog.

Sat, 11/16/2013 - 11:58 | 4160467 slotmouth
slotmouth's picture

I read Sheila Bair's book "Bull by the Horns".  She paints Timmy as the most despicable human being imaginable.  He was a Rubin stooge who kept popping up and insisting for bailouts and policies that would benefit Citi and other bankrupt cronies.  I highly recommend that book.

Sat, 11/16/2013 - 22:00 | 4161591 AldousHuxley
AldousHuxley's picture

Americans enjoy high standard of living while producing shit because wall st dupes foreign dictators into investing in dollar denominated assets.

Sheila Bair = wife of a mobster.

Sun, 11/17/2013 - 12:30 | 4162430 ajax
ajax's picture

 

 

"I read Sheila Bair's book "Bull by the Horns".  She paints Timmy as the most despicable human being imaginable."

Neil Barofsky paints the same picture of Geithner in his book "Bailout":

http://c-spanvideo.org/program/Barofs

 

 

Sat, 11/16/2013 - 17:13 | 4160886 Element
Element's picture

 

 

I guess this means he can go back to being a tax dodger as well

In the circumstances anyone who's not avoiding, minimizing, or just not paying tax, is not playing with a full deck. This system is hopelessly corrupt. To offer any sort of support for it implies complicity and agreement with its continuance. It isn't going to reform itself by little-people paying taxes to empower prosecutors and Justus dept to clean up the crooked. Just the reverse in fact, they'll set up systems and laws to come after you for MOAR. Not because they can't invent money at will, but just in order that for them to 'win', you must be made to lose everything. Participate and support this system and you'll get ground to dust anyway.

Happy new financial year.

Sat, 11/16/2013 - 17:00 | 4160936 sgt_doom
sgt_doom's picture

When researching the origins of private equity firms (since it is so closely tied into the countermeasures of the super-rich to continue hiding their wealth and ownership in response to Kennedy-supported, Rep. Wright Patman's study of that subject with his resulting congressional report on foundations and trusts) it appears that the very first two firms in the 1960s, of course, were AEA Investors (founded and financed by Rockefeller, Mellon, Harriman and a member of the Warburg banking family) and Warburg Pincus (founded by another member of the Warburg banking family).

One would imagine that Timmy should end up there, of course . . .

Sat, 11/16/2013 - 11:08 | 4160401 azzhatter
azzhatter's picture

Fucking piece of shit Geithner. I was hoping you were posting his obituary. Fuck You Geithner

Sat, 11/16/2013 - 11:22 | 4160423 RSloane
RSloane's picture

Geithner was flummoxed by Turbo Tax. Only in the US would that credential be a portal into rarified financial circles.

Sat, 11/16/2013 - 11:47 | 4160459 Sudden Debt
Sudden Debt's picture

well, he won't have his normal security detail anymore so if you wanne settle some scores :)

Sat, 11/16/2013 - 14:00 | 4160623 Bay of Pigs
Bay of Pigs's picture

Is it wrong to hope for a painful and brutal violent death for him?

Sat, 11/16/2013 - 15:22 | 4160762 knukles
knukles's picture

privately, no

Sun, 11/17/2013 - 01:43 | 4161899 PT
PT's picture

BoP:  Old Joke about guy being arrested:

"What if I called you a cunt?"
"I would charge you for insulting a police officer."
"Well, what if I just thought you were a cunt."
"No, you can't be arrested for what you think."
"Good.  Because I think you're a cunt." 

Sat, 11/16/2013 - 11:11 | 4160403 overmedicatedun...
overmedicatedundersexed's picture

at least we know where to find him.

Sat, 11/16/2013 - 11:11 | 4160404 chubbar
chubbar's picture

He'll be worth >100million in a few short years collecting the bribes he took for executing policy decisions made by the unknown hand behind the banksters.

Sat, 11/16/2013 - 17:04 | 4160951 sgt_doom
sgt_doom's picture

Either that, or a chunk of that missing $8.7 billion in Iraqi oil funds, which were supposed to have been kept on account at FRBNY when he was chair, the contract which was overseen by Geithner's best-friend-forever and former college roomie, Daniel Zelikow (that's Daniel, not Philip!), the managing director at JPMorgan Chase at that time, which monies movements were coordinated by the top finance guy at the Coalition Provisional Authority at that time, Reuben Jeffery III (who would later go on to become the CEO at Rockefeller Flnancial, after the tragic "suicide" of its previous CEO).

It is a small world after all!

Sat, 11/16/2013 - 11:15 | 4160413 Jumbotron
Jumbotron's picture

<Yawn.> 

Bankster becomes Treasury Secretary becomes bankster again.  But we've known for sometime the Fascist State we live in......like....since 1913.

Sat, 11/16/2013 - 12:32 | 4160504 TheGardener
TheGardener's picture

Fuck you jumbo you called people names who dared to speak out against the state of affairs since 1913 and you have the
chutzpah to comment on tribal banksters ?

People who have since been removed from this site, asshole.

Sat, 11/16/2013 - 14:02 | 4160628 Bay of Pigs
Bay of Pigs's picture

+1 Jumbo is an asshole.

FREE francis_sawyer!

Sat, 11/16/2013 - 11:19 | 4160420 MontgomeryScott
MontgomeryScott's picture

I always admired the Warburgs. They are such scions of the unholy see of banking cartels...

http://www.hitlerhitler.com/

http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3815

http://www.warburgpincus.com/industries/financial_services/Default.aspx

Yes, TurboTax Timmy will fit in rather well.

It's rather sad that those such as he do not realize that there IS a hell waiting.

Sat, 11/16/2013 - 11:26 | 4160435 dick cheneys ghost
dick cheneys ghost's picture

''During the post-war period, Eric Warburg vied with his cousin Siegmund Warburg, founder of S.G. Warburg, over the use of the Warburg name in New York. Siegmund wished to expand the S.G. Warburg franchise into New York but was blocked by the existence of E.M. Warburg & Co. Following the effective sale of the business to Pincus, Siegmund Warburg accused Eric of prostituting the Warburg name. "Complicating matters was that Siegmund thought Pincus the wrong kind of Jew - of Eastern European ancestry, with a garment-district background. Professionally, he thought Pincus well below haute banque stature in the venture capital world."[18]''

http://en.wikipedia.org/wiki/Warburg_Pincus

Sat, 11/16/2013 - 12:39 | 4160516 Papasmurf
Papasmurf's picture

Your second link ended in default.

Sat, 11/16/2013 - 11:30 | 4160427 NIHILIST CIPHER
NIHILIST CIPHER's picture

Interesting tidbit-      Timmy Geithner's father worked with Barry Obummer's mother in Indonesia when they were just little guys. Both parents were CIA operatives and so are the kiddies. Of corse Timmy will take a position at Warburg and don't you love that they used the term, "reached out" to Timmy for said position.

Sun, 11/17/2013 - 12:46 | 4160595 Kirk2NCC1701
Kirk2NCC1701's picture

"Reach out" is an official weasel-word in HR, and in SaM (Sales and Marketing).

People who do well in the corporate world, speak 'Weasenglish'.   A term I just made up.

Sat, 11/16/2013 - 18:55 | 4161190 max2205
max2205's picture

So...Tim and Barry could have the same mother?

Sat, 11/16/2013 - 11:25 | 4160429 Mrs. Cog
Mrs. Cog's picture

Oh good... a place of employment will be helpful knowledge to the pitchforks and torches crowd at the appointed hour.

Sat, 11/16/2013 - 11:26 | 4160433 Winston Churchill
Winston Churchill's picture

Ther is no hell in the Jewish religion.

Explains a lot.

Sat, 11/16/2013 - 17:24 | 4160933 Element
Element's picture

Makes you wonder how Christians ended up with the lakes of fire and brimstone, eh? Read Nag Hamadi version of Christianity, their books went on about how all aspects of existence and being will ultimately, through a process of stages, re-unify all beings again, as the one and same thing. So no eternal Hell was implicit in early Christianity as well, just recognition of wayward behavior, repentance, forgiveness and grace, etc.

The notion of Hell and eternal damnation seems to be the sociopolitical control invention of the child-rape-infested catholic church's popes and bishops (which concept the early-Muslims then copied, and it got even more farcical, stupid and sociopathic, again to control the societies, and make religion the political control entity of all power and wealth).

Obviously the popes and bishops don't believe in Hell and Eternal Damnation, and live accordingly, or maybe its their self-appointed absolution, and the selling of indulgences trading? Which they figure will save the day for them, because obviously God won't mind having vicious lying child-rapist bastards running around all over his cloud, praising and associating with him and speaking on his behalf 'bout stuff ... yeah ... riiiiight ... (or the lame-brained suicide bombers and the throat-slashing head-lopers, all looking for their extra-virgins, for that matter)

Sun, 11/17/2013 - 13:00 | 4162493 Kirk2NCC1701
Kirk2NCC1701's picture

No hell/Hell in mine either.  Only peaceful Oblivion.  No torture, and no one's ass to kiss for all eternity.

Gods were just ET's visiting, or in some cases crashed here.  The ones who crashed --Roswell style -- were found by people (Moses, Muhammad) walking in remote parts.  Nothing like starting a new religion with ET-inspired concepts or their tech to help convince other primitive tribesmen.  If this trick still works today, imagine how well it worked back then.

That's why the Federation has the Prime Directive.  As can be seen in the opening scenes of the latest Star Trek movie "Into Darkness", primitive are... IMPRESSIONABLE.  / Even in the 21st Century, it seems. /sar

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