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Cutting Through Geithner's Endless Lies: A "Lie Detector" Analysis Of Timmy's Geopolitical Outlook

Tyler Durden's picture




 

That Tim Geithner is either incomponent or a pathological liar is by now irrelevant: anything that comes out of his mouth traditionally ends up being completely wrong, either on purpose or otherwise. What is always entertaining is putting Tiny Tim through a lie detector test of some sort (especially without it blowing up), which is what the former spies from Behavioral Intelligence Research (for previous iterations of their work see here) have done with their just released report "Tim Geithner at II/Delivering Alpha Conference." While hardly telling us anything new, BIA's "body language" interpretation of what was said, and unsaid, is quite interesting now that the Treasury Secretary has decided to put upon himself to become more cryptic than the maestro and less credible than Baron Munchausen. To wit: "[Geithner's] responses to questions on the U.S. economy frequently reflect efforts to aggressively garner bipartisan support. From a behavioral perspective, however, his responses to questions about the European crisis are more significant. Mr. Geithner is asked a number of questions aimed at gaining insight into the situation and how the crisis will impact the United States. However, he consistently sidesteps specific questions and attempts to minimize the severity of certain factors suggesting he has more significant concerns than he implies about the depth of the risk in the region and the potential impact it has for the U.S. Below are our observations."

Full report:

Potential impact of the European crisis on the U.S is likely more significant than Mr. Geithner implies and could involve Federal Reserve support for European central banks.

When asked to discuss what he will say to European ministers during his visit to the region, Mr. Geithner does not provide any insight into what his message will be. Instead, he states, “They invited me to come. It would be polite to accept that.” This reflects an effort to downplay the significance of his visit and cast it more as a diplomatic event rather than one that is driven by extenuating circumstances. However, Mr. Geithner goes on to acknowledge that the U.S. has a “huge” interest in helping European leaders as they work with countries “in terrible crisis” – language that belies the urgency of the situation and the reasons for his trip. He also makes considerable efforts to assure investors that European leaders are absolutely committed to “do what it takes” to “hold this thing together” and that they recognize “it’s going to take force behind their commitments” to make sure countries have the financial support they need. But despite his efforts to convince investors that leaders, particularly in Germany, know they “have to do more to earn the confidence of the world” that they have the political will to do this, Mr. Geithner’s language signals that the disarray among political and financial leaders in Europe is severe and may not be readily resolved.

Further, Mr. Geithner consistently sends a mixed message to both assure investors that the situation is “overwhelmingly a European challenge,” but also that the rest of the world has a “big stake in helping Europe.” This, in conjunction with his failure to provide insight into the potential impact on the U.S., suggests he has greater concerns than he implies. Specifically, when asked to discuss U.S. exposure to French banks, Mr. Geithner does not address the topic. Instead, he launches into a lengthy effort to downplay the nature of the impact of the overall situation in Europe, stating that it matters to the U.S. because it “adds to lack of confidence” and it makes everyone “more tentative.” He then goes on to assure investors that the U.S. financial system is in a “much stronger position to deal with these new risks” than it was before the crisis and that the U.S. is “way ahead of the rest of the world” in its ability to handle any type of shock. This compulsion to preemptively minimize concern about the impact in the U.S. of the risks in Europe suggests that he anticipates that the impact could be much more significant than merely adding to “caution” in the market.

Also, when asked if there will be a need for worldwide aid for Europe, including from the U.S., Mr. Geithner says that “of course the Federal Reserve appropriately is willing” to be as supportive as possible to help with dollar funding needs. But he also simultaneously makes assertive attempts to convince investors that European central banks have the economic and financial capacity to meet challenges on their own. This effort to downplay the magnitude of any support that would be needed suggests that the U.S. likely anticipates it will provide aid to European central banks in some form and raises the possibility that it could be substantial.

Financial risk at European institutions is likely more significant than Mr. Geithner would like to admit.

When asked if European leaders have plans to help financial institutions avoid another “Lehman,” Mr. Geithner tries to convince investors that there is “no chance” that major countries in Europe will let their institutions be at risk. However, he qualifies his statement, saying that leaders will not let their institutions be at risk “in the eyes of the market.” This focus on the public perception about risk versus the more challenging goal of real stability suggests that problems within these institutions run much deeper than portrayed. This also suggests that even if they manage through this near-term crisis, significant underlying issues could persist. Additionally, Mr. Geithner emphasizes that the Chancellor of Germany has repeatedly said in public and in private that the European leaders “are not going to have a Lehman Brothers. We are not going to do it.” While he says this to lend credibility to his premise that those institutions will not be allowed to fail, he also states that the Chancellor recognizes they have to do more to make that commitment “credible to the world.” This again is a tacit acknowledgement that political dysfunction is extreme and far from resolved, thus raising questions as to how effectively risk at financial institutions will be mitigated.

Finally, when asked if European banks could pass the U.S. stress test, Mr. Geithner avoids offering any insight, responding that “I think that is a question you should ask the broader investment community.” He goes on to emphasize the transparency and rigor of the stress tests in the U.S. – stating that U.S. officials lay out enough detailed information with a “very tough set or assumptions” so “the world could decide” if the test was tough enough. These remarks could be interpreted as a subtle attack on the approach in Europe, suggesting that Mr. Geithner does not believe European stress tests are as rigorous as they should be, raising the possibility that financial institutions may be at greater risk than he would like to admit.

 

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Tue, 09/20/2011 - 15:37 | 1689832 Long-John-Silver
Long-John-Silver's picture

If his lips are moving he's lying.

Tue, 09/20/2011 - 15:43 | 1689844 nope-1004
nope-1004's picture

Geithner..... now there's a loser.

If only he could succeed at one of his jobs, then the personal attacks might stop.  But since he never has and so resorts to lying, he has proven to all, beyond doubt, that he is incompetent.

 

Tue, 09/20/2011 - 16:01 | 1689940 moldygoat
moldygoat's picture

bet you he has a "mad dog" reach-around though.

Tue, 09/20/2011 - 17:11 | 1690140 ManufacturedOpinion
ManufacturedOpinion's picture

Actually, Jeethner is HIGHLY competent.  One need only focus on his REAL purpose:  To downplay the constant desire of the Tribe to take all of our money.  And with everyone analyzing his WORDS instead of his ACTIONS he is accomplishing that goal beautifully.

The answer to all this shit is to simply be cognizant of the real battle:  Banks against People.

When you keep your eye on that, everything else is really pretty easy to follow.

Tue, 09/20/2011 - 15:37 | 1689835 Cleanclog
Cleanclog's picture

Transparency will exist when mark to market valuations are used.  Until then, the stress tests are a joke.  Just like Geitner.

Tue, 09/20/2011 - 16:15 | 1689987 carbonmutant
carbonmutant's picture

Geithner was sent over to find out how bad the problem really is and to find out what kind of risk US banks are exposed to.

Tue, 09/20/2011 - 16:32 | 1690043 Piranhanoia
Piranhanoia's picture

Poor Baron Von Munchausen.  He never demanded the world see things his way. Course he and Tim are both reason challenged persons.

Tue, 09/20/2011 - 16:44 | 1690073 ArkansasAngie
ArkansasAngie's picture

This speech is pre-Slap-Down of Geitner last week and over the week end.

I do believe that US taxpayer money to Europe is not assured.

Prehaps we need to cap the amount of our money which Bernanke and/or Geithner can actually transfer to Europe without Congressional approval.

Tue, 09/20/2011 - 17:02 | 1690117 Rodent Freikorps
Rodent Freikorps's picture

Past behavior is the best indicator of future actions.

Tue, 09/20/2011 - 17:13 | 1690145 ManufacturedOpinion
ManufacturedOpinion's picture

Agreed.

And, remember ... words don't count at all (except for obfuscational purposes).

Tue, 09/20/2011 - 17:32 | 1690182 bid the soldier...
bid the soldiers shoot's picture

If Geithner is lying, and you know he is, isn't the guy who tells us what the crude oil production, consumption, and proven reserves are, probably lying too?

Oh, trolling. Sorry.

Tue, 09/20/2011 - 18:43 | 1690330 Restcase
Restcase's picture

From "The Further Adventures of Baron von Munchausen":

"And so, I was enjoying myself in a private gentleman's club (much like this one), and who should walk in but the treasurer of the United States!"

"Oh, but Munchausen, now you have gone too far! The treasurer of the United States is no gentleman, everyone knows that!"

"Ah, but he was the guest of a Mr. Soros, who was a guest of a Mr. Buffett, who was the guest of a real gentleman whose name I do not recall. In any case, I was surprised to see him resting from his immense burdens and I could not resist asking: 'Mr. Geithner, how do you propose to fix your country, the European economy, and stave off the collapse of China?'"

"Munchausen, you didn't!"

"Indeed I did! And you would marvel at his answer. He said, 'Baron, I have friends who own a magical printing press.' " 

"A magical printing press, Munchausen? But that is impossible!"

"Let us order another round of drinks, for that is just the point where our story begins..."

Tue, 09/20/2011 - 19:51 | 1690377 bid the soldier...
bid the soldiers shoot's picture

Münchausen by Internet is a pattern of behavior in which Internet users seek attention by feigning fables in online venues such as chat rooms, message boards, and Internet Relay Chat. They make up shit about the good Freiherr von Munchausen, the talented teutonic teller of tall tales. For the most part they are harmless individuals and should be humored.

If you go drinking with them they insist on paying for every round.

edit
==================================================
my mother just called (4:35 pm pacific) called and told me to say something nice about Restcase's post.

Okay. It was very wonderful. Green arrow.

Wed, 09/21/2011 - 19:19 | 1694993 Restcase
Restcase's picture

Your mother knows good Munchausen pastiche when she sees it.

You know, if all our mothers read ZH, what a different world it would be.

Wed, 09/21/2011 - 22:16 | 1695444 bid the soldier...
bid the soldiers shoot's picture

If all our mothers read ZH, the guys would probably tone it down and I don't think I'd like that. That, plus the fact that I get extremely envious of super bright and funny posters...well, you know what I mean.

All you animals are great, but some of you are more great :o)

Tue, 09/20/2011 - 18:37 | 1690337 Tunga
Tunga's picture

If I had a rocket launcher I'd make somebody pay!

No rocket launch for you! eurospace trash goes on strike. Arab and American satellites stuck on the ground in (Southern)France. 
http://spaceflightnow.com/ariane/va204/status.html

 

The American Arab Spring will not be Televised!

Tue, 09/20/2011 - 19:24 | 1690458 Bansters-in-my-...
Bansters-in-my- feces's picture

TIMMY........G...

you......are a  DELUSIONAL FUCKING  TRAITOR

Should be hung by the neck until dead.

Tue, 09/20/2011 - 19:28 | 1690467 Justaman
Justaman's picture

TIMMAY!!!!!

Tue, 09/20/2011 - 19:45 | 1690501 Frozen IcQb
Frozen IcQb's picture

 Johnny Carson Lie Detector Politician - YouTube 

http://www.youtube.com/watch?v=xKgmScYcK6g

 

I think it's priceless but U decide!

 

Tue, 09/20/2011 - 21:54 | 1690772 BlackholeDivestment
BlackholeDivestment's picture

                              

                  

 

                TimMAAAAAAY

                        don't

                         surf

                       anything      

                         but                     LIESLIESLIES

                          A           LIELIE                  LIESLIESLIESLIESLIES

                    Shortboard                               LIESLIESLIESLIESLIESLIESLIES 

http://www.youtube.com/watch?v=dL23xQK_4Ks LIESLIESLIESLIESLIESLIESLIESLIES

OnChairsatan'sTsunamiONCHAIRSATAN'STSUNAMIWaVeWAVEOFBULLSHITANDLIE

                                                        

                                                                  

                                                                 

Tue, 09/20/2011 - 22:15 | 1690828 prophet
prophet's picture

No chance.

Tue, 09/20/2011 - 23:20 | 1690951 forexskin
forexskin's picture

Finally, when asked if European banks could pass the U.S. stress test, Mr. Geithner avoids offering any insight, responding that “I think that is a question you should ask the broader investment community.” He goes on to emphasize the transparency and rigor of the stress tests in the U.S. – stating that U.S. officials lay out enough detailed information with a “very tough set or assumptions” so “the world could decide” if the test was tough enough. These remarks could be interpreted as a subtle attack on the approach in Europe, suggesting that Mr. Geithner does not believe European stress tests are as rigorous as they should be, raising the possibility that financial institutions may be at greater risk than he would like to admit.

like the us bank stress tests were the gold standard...

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