Tim Geithner

In all, the President's speech was reminiscent of George Clooney’s in Ides of March. We’ve heard it all before, maybe with slightly different words: America lost 4 million jobs before I got here, and another 4 million before our policies went into effect, but in the last 12 months, we added 3 million job. We must reduce tax loopholes, and provide tax incentives to businesses that hire in America. We must reform taxes for the wealthy (though he signed an extension of Bush’s tax cuts.) We must train people for an apparent abundance of expert jobs. We need more clean energy initiatives.  We created regulations (big sigh of relief he didn’t use the word ‘sweeping’) to avoid fraudulent financial practices. We will help homeowners. Wall Street must ‘make up a trust deficit.”   Like Jamie Dimon cares. In other words, Obama gave Wall Street a pass, while waxing populace. Don’t get me wrong. I expected nothing different. I will continue to expect nothing different, when he gets a second term, given the lame field of contenders all around.

Where black is white and white is black.

All you need to know.

Life goes on, so does the stock market. 

I go schizoid.

Tim Geithner, in his third third annual pilgrimage to Europe, the first two of which concluded with one after another more discredited stress tests (because in Mark-To-Unicorn America they worked sooooo well), has a slightly different message to the locals on how to run their failed monetary union. From Reuters: "Treasury Secretary Timothy Geithner is likely to urge euro zone finance ministers on Friday to speed up ratification of changes to their bailout fund and consider boosting its size, an EU source said on Tuesday. The official said Washington was worried that the euro zone was not acting fast enough to enhance the EFSF fund and that the stability of the global financial system was at stake. He is likely to tell the ministers that they should consider increasing the size of the EFSF to equip it better for the needs of potential bank recapitalization. "He will probably tell Germany to give up its resistance to an increase in the size of the EFSF," the source said. A well connected fund source told Reuters Geithner had been pushing for a solution for European banks along the lines of the TARP program in the United States, but had not made much headway." Translation: Germany has to immediately throw billions more of taxpayer money into the insolvent bank pit (just like America did), or else Tiny Tim will get angry. Well, if Germany's ruling class was against pledging over 100% of its GDP to bailout Greece and the other insolvents, it will surely be persuaded to commit political suicide after the last man standing from Obama's administration, who still inexplicably has not been fired for gross incompetence (and also prosecuted for tax evasion), has his say. And just as the short selling ban lasted all of one week before Europe's banks tumbled, even a favorable uptake of the idiot's proposals will at best lead to a 24 hour spike in prices followed by what will likely be the terminal tumble into the abyss of failed Keynesian-Bernankian experimentation.

Peter Barnes “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

Geithner’s response: “No risk of that.”

“No risk?” Barnes asked.

“No risk,” Geithner said.

The Treasury's Borrowing Advisory Committee, chaired by such luminaries as JPMorgan and Goldman Sachs, which according to some (and by some we mean anyone who cares about such things) is the brains behind the decision-making process of US debt issuance has released its quarterly minutes, in which it has issued one of the most stark warnings about the fate of the US Dollar to date. While it is now a daily occurrence for China and Russia to bash the dollar, for the most part still powerless to provide an alternative (but rapidly gaining), the same warning coming from Jamie and Lloyd has to be taken far, far more seriously. Which is precisely what happened today. As Bloomberg reports, "The Treasury Borrowing Advisory Committee... said the outperformance of haven currencies and those from emerging nations has aided in the debasement of the dollar’s reserve status, according to comments included in discussion charts presented ahead of the quarterly refunding. The Treasury published the documents today. “The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one committee member said. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”"

Peter Barnes “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

Geithner’s response: “No risk of that.”

“No risk?” Barnes asked.

“No risk,” Geithner said.

When just under a year ago, Tim Geithner penned "Welcome to the Recovery" he top ticked the zenith of the business cycle to the day if not the hour, with the economy finding itself in a straight line contraction ever since then, blissfully delayed by a 9 month QE2 detour. Now that the QE2 is no longer a factor, we are already seeing economists everywhere cut their Q2 GDP forecasts to sub 2%, an effective stall speed for the economy in real terms, and reducing their full year economic forecasts. Which is why we were delighted to learn that today Geithner has just released his latest iteration of a top-ticking missive, this one titled inappropriately enough "Dodd-Frank Has Made Our Banks Stronger" which is supremely ironic because not only has Dodd-Frank not made anything stronger as it has not even been remotely implemented, but as Bank of America, Goldman and Citi's Q2 results have just confirmed, the US bank sector is now the weakest it has been in years. Thus, when accentuated with a Geithner adminition to not panic our only advice is to do precisely the opposite. Oh yes, it took precisely 25 days between Geithner's heartfelt appeal to America's idiot class last year and Bernanke's Jackson Hole appearance. We wonder if this year it will be shorter.

Not sure what this is all about, but Timmy is about to throw some more mutual assured destruction fire and brimstone bombs.

I notice you're not wearing any...galloshes--Weird Al Yankovic

As Zero Hedge readers predicted by a margin of more than nearly three to one, Tim Geithner's next employer of choice, per bnet's Constantine von Hoffman, is none other than the universal viceroy-cum-vampire squid presiding at 200 West according to a just "leaked" letter. And while we all know the key resume highlights (issuing $1.5 trillion in debt a year for the duration of his tenure, mopped up on both sides by Quantitative Easing, bringing America to the verge of insolvency and living on an "auction to auction" basis), here is the summary of Geithner's key qualifications that make him a shoo in for the job.

GEITHNER SAID TO CONSIDER LEAVING TREASURY AFTER BUDGET DEAL

Explains why the market just ripped.

In the meantime, a cubicle at 270 Park is being prepared.

Amid the usual meandering propaganda, Tim Geithner finally catches up to Zero Hedge from February 2010: "The three largest U.S. banks account for 32 percent of total banking assets in the United States, in comparison to 46 percent for the three largest in Japan, 58 percent in Canada, 63 percent in the UK, 65 percent in France, 70 percent in Germany, 71 percent in Italy, and 76 percent in Switzerland. And total banking assets are 461 percent of GDP in the UK, 178 percent in Germany, and 820 percent in Switzerland." Supposedly this is intended to indicate just how much less concentrated the US banking system is compared to other nations: "Some argue that the U.S. financial system is too concentrated, which could promote systemic risks.  But the U.S. banking system today is less concentrated than that of any other major economy.  And
total banking assets in the United States today are only about the size
of U.S. GDP – much lower than in other developed economies." So just because the entire system is broken beyond repair, it makes sense to tout that the US is broken just a little bit less than everyone else? Also, where is the mention of the fact that the bulk of these balance sheets are chock full of toxic US securitized detritus and that without the US selling its worthless crap around the world, we would not be in the predicament we are in now. In the meantime, here is what Zero Hedge presented in February of last year...