Geithner to Ask Congress for Broad Power to Seize Firms

[IDemo]

Source: Washington Post

By Binyamin Appelbaum, David Cho and Debbi Wilgoren
Washington Post Staff Writers
Tuesday, March 24, 2009; 7:44 AM

The Obama administration will ask Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, White House spokesman Robert Gibbs said this morning.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The government at present has the authority to seize only banks.

Geithner will testify alongside Federal Reserve Chairman Ben Bernanke at a hearing before the House Financial Services Committee that begins at 10 a.m. Although the stated focus of the hearing is the controversial bonus payments AIG awarded its employees after receiving the government bailout, Geithner will try to advance the argument that the government needs more tools in its arsenal in order to right the nation's economic ship.


Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/24/AR2009032400847.html?hpid=topnews

[Jackpine Radical]

1. Wow. Looks to me like, while everyone was shooting off firecrackers

and hopping up and down about the bonus scandal, the Obama crew were busy setting up a machine gun nest behind enemy lines.

[aquart]

41. Doesn't it, though?

[woodsprite]

2. I like Obama, but how many of us really trust Geither?

Should one of the questions that we're asking be "How can this move be exploited by the Bush cronies buried deep within these agencies?"

I know. I must have slept in my tinfoil hat last night.

[Bonhomme Richard]

3. I trust Obama.

To a point.
I have to figure He knows a lot more than any of us do and for now I will trust his judgment. He see's something in Geither so I will leave it at that, for now.

[No Elephants]

13. Is capitalizing "He" in the middle of the sentence irony or a Freudian slip?

[superconnected]

30. People tend to capitalize references to people they respect.

They will also capitalize other words in sentences where the point is something they feel strongly about or have respect for. It's unconscious. I see it on internet all the time. I even do it.

[No Elephants]

43. Really? I've been posting for about 6 years and have not seen it except for references to God.

[superconnected]

47. Open your eyes now that you've been told about it. It's everywhere.

[No Elephants]

44. Duplicate. Sorry.

[Bonhomme Richard]

32. Nah. Just overthinking with the grammer.

[flyarm]

22. and what makes you trust him??

do watch these and tell me what you still trust????????

http://www.youtube.com/watch?v=EUQI5PzKPPs&feature=player_embedded

http://www.youtube.com/watch?v=o5t8GdxFYBU&NR=1



when did the war stop?
when did he close gitmo?
who has been held accountable?
why have 30,000 troops been sent to combat instead of shrinking the troops sent to a war zone?
why did Obama send Kissinger..yes Kissinger to represent his administration to Russia??

do a little back ground check on Geithner's father and Obama's mother..and the history between the families..

why did Obama send Kissinger to Russia a few weeks ago , representing his administration and the USA..
lets see shall we??????

http://www.answers.com/topic/timothy-f-geithner

Timothy Geithner
Career
After completing his studies,Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988. He was deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996-1997), assistant secretary for international affairs (1997–1998).<

He was Under Secretary of the Treasury for International Affairs (1998–2001) under Treasury Secretaries Robert Rubin and Lawrence Summers.<5> Summers was his mentor,<1> but other sources call him a Rubin protégé.<9><10><11>


In 2002 he left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department.<7> At the International Monetary Fund he was director of the Policy Development and Review Department (2001-2003).<5>

I trust none of these people who are raping our children's future!

[superconnected]

31. The glass will always be half empty for you, I suspect. We are far better than under bush and

we are moving in the right direction. Today we found out we have an EPA again. They just admitted to greenhouse gases being a problem and the need for regulation.

[flyarm]

39. where's the glass??????????I can't seem to find the glass!!

what I see is home after home of for-sale signs or forclosure signs, and closed up business's and closed up store fronts....

1 Week ago I worked at a center feeding those in need , what I saw was 250+, what were middle class hungry senior citizens who have lost everything..go work at one..it will surely open your eyes ..if you dare !!

And you too will wonder where the damn glass is..

but don't look far..all the money in this nation ..and all that can be borrowed is going to the fat cats ..the ones who Obama and Tax cheat Geithner "Kissingers boy".. are giving your kids dollars to!

[superconnected]

46. Obama's been in for 2 months and 4 days, bush f-ed it up for 8 years.

Give the new administration a chance. Right now they're buried in reversing bush laws and trying to help the economy recover. They've got a world economic crises and Iraq to recover us and the iraqis from too. Things are getting better. Today the EPA started going after corporations. We have on heck of a raid on laws and monies from the bush adminstration for Obama to recover us from. At least he's trying to get us to recover.

[Bonhomme Richard]

33. Like I said. To a point.

I'm not ready to jump ship and I am not cynical enough (although I get close sometimes) to believe that there is an evil bastard under every rock.

[LiberalFighter]

5. I am sure those cronies would have little if any impact on those particular actions.

Unless they have authority that doesn't require a sign-off.

[No Elephants]

12. No, we all have to question that. Not only Bush cronies, either. All have sold out to lobbyists.

[alcibiades_mystery]

19. I don't give a shit about TRUSTor PERSONALITIES

This isn't a goddamn soap opera. I give a shit about policies and mechanics of policies.

If you craft policies correctly, you don't HAVE TO trust. That's the point.

The most obnoxious argument to come out of the Bushies was the inversion of policy and trust: you don't have to worry about the policy mechanics, because you can essentially trust the players. This is fascist nonsense in its essence. TRUST has NOTHING TO DO with POLICY. Policy is designed so that you DON'T HAVE to trust personalities, just like contracts and strong agreements are most important between friends, because you eliminate the personality from the binding relationship.

[Psephos]

21. Amen. Amen. Amen. n/t

[No Elephants]

24. AMEN!

[Mithreal]

37. Damn straight, argued this with my Congressman's staffers

in DC and locally. Their argument, we can trust the President not to abuse new powers like Bush did, made me want to scream.

[radfringe]

4. it's musical chairs with these companies

check out theyrule.net

database hasn't been updated since 2004 - however it will give you an idea of just how incestual all these companies are

[Po_d Mainiac]

6. Where is the line drawn?

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said...

Maybe something as drastic as this is needed till the regulators are able to function in the capacities they were meant to. But IMHO this would would need a "sunset" provision. This would need to have oversite on an unprecedented scale. This would require penalties for abuse that would include "assumption of guilt until proven innocent" to keep a JPM (just an example) from becoming the only game in the Country

One could argue that failures at Ford and GM will cause systemic meltdown all the way to end of their supply lines. It takes little imagination to see where the scrub administration would have stepped in and abolished the UAW. This is scary power

[No Elephants]

25. IMO, we should draw the line at receivership. That is already plenty of power.

[dixiegrrrrl]

42. If I may just point out....

Look what Denninger wrote :
http://market-ticker.denninger.net/

We already have plenty of tools in the box folks.


Geithner wants:

***** Regulators should be able to safeguard the entire financial system as well as monitor the health of specific institutions, Geithner said. This oversight should cover “all institutions and markets that could pose systemic risk” he said, according to the excerpts.****

Regulators can already do this. It is already against the law to lie in your financial statements, it is already against the law to defraud and it is already against the law to make promises (contracts) you know for a fact are mathematically impossible to keep.

We don't need new laws, we need existing laws enforced, and we need the restrictions that were on the banking and financial system prior to the 1990s when we dismantled all of the separations and protections put back.

Specifically:

*
Restore Glass-Steagall.
*
Restore branch banking restrictions and CONSTRAIN the size of companies so they CANNOT pose "systemic risk."
*
Bar the trading of OTC derivatives by any regulated company - period. If regulated firms want to trade CDS or such it has to be done via exchange-listed, central-counterparty mechanisms so that nightly margin and mark-to-market can be (and is) enforced and monitored.
*
Remove the "exception" for CDS from the regulatory structure; if it walks like insurance and quacks like insurance it is insurance. Regulate it as insurance.
*
Prosecute those who intentionally game the system as purveyors of fraud - which is exactly what they were - and put their butts in prison where they belong!

We are here because we willfully turned our heads from outrageous acts of deception and willful misconduct, not due to "lack of oversight capability."

Pull your heads out of your butts folks - handing more power to people who have proved they will not exercise the powers of oversight and regulation they already have is not the answer.

Bernanke, in particular, had the ability to prevent the AIG mess from happening because he already had regulatory power over the banks that were buying these CDS instruments from AIG.

He did nothing to stop them from purchasing "credit default insurance" (which is what it was, no matter what AIG and others claimed) from a company that did not have any money to pay, even though he had the unquestioned authority to do so.

The Fed, OTS and OCC (the latter two of which are Treasury both in name and in fact) willfully ignored what AIG was doing despite having the ability to stop it.

A drug pusher cannot sell drugs without drug users. In this case Treasury and The Fed had regulatory authority over the drug users and refused to exercise it, and now claim they need "new authorities."

In fact what they need is prison terms for their willful refusal to exercise the power they already had, with Geithner being one of the worst offenders in that he sat as head of the NY Fed while the worst of these abuses occurred, head firmly and intentionally buried in the sand.

[Belial]

7. People.. This is NUTS.. is everyone crazy or what??

[high density]

14. Most of this forum is drooling for nationalization of the banks

This should be right up their alley!

[Imperialism Inc.]

18. And what exactly is wrong about being able to wind down bankrupt companies?

What should have happened with AIG is that they go under and their assets are sold off. Just like the FDIC does several times eveyr year with banks that fail. The problem is that there isn't anyone with the authority to do so with companies like AIG that are financial companies but not banks.

I can only imagine that your snarky comment comes from a place of ignorance of the situation. As I can't imagine that anyone would advocate for either disorderly bankruptcy of organizations of AIG's size or for doing what we had to do this time since we lack the authority.

[high density]

23. Disorderly bankruptcy of AIG?

We own that company and its CEO, we can dismantle it however we want to right now without giving these insane powers to the Treasury department.

[Imperialism Inc.]

34. Much as I suspected. From a place of confusion.

No we cannot dismantle it however we want. We own non-voting equity in AIG. We have no say in their day to day affairs. Plus think about what you are saying. Even if we did have voting shares why on earth would we give them money just to take control of the company to dismantle it. Do we then just pay ourselves back first? Do you think AIG would agree to that, if that is what we went in to do? Of course not. And we can't force them to take capital. So... hmmm, I think maybe we need wind down powers like the FDIC has for banks.

[high density]

35. So Sarah Palin gets elected in 2016 and she decides to have Treasury "wind down" MSNBC and the Times

How do we feel about that? The executive branch has a glut of power already.

AIG is a problem. Voting shares or not, I think you underestimate our influence over that company. We replaced its CEO in September.

[Imperialism Inc.]

36. What on earth do either of those companies have to do with finance?

The new powers will be for financial firms that pose systemic risk to the financial system and will belong to the FED. Either you are purposely spreading FUD or you just don't even know the basics of what you are talking about. Either way I'm done with this silly conversation.

[No Elephants]

26. As if DUers are the problem.

[kpete]

8. U.S. Seeks Expanded Power to Seize Firms

Source: Washington Post

U.S. Seeks Expanded Power to Seize Firms
Goal Is to Limit Risk to Broader Economy

By Binyamin Appelbaum and David Cho
Washington Post Staff Writers
Tuesday, March 24, 2009; A01

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830_pf.html

[TechBear_Seattle]

9. No two words frighten me more than "unprecedented powers"

I do not trust ANYONE to hold "unprecedented powers." Isn't this the kind of shit that we slammed Bush for, and with good reason?

[aquart]

45. Yes.

This IS how dictatorships start: with the granting of unprecedented powers.

[newfie11]

10. I wonder what they think is going to fail next. n/t

[Igel]

16. Certainly not themselves.

It's a repeated refrain in history: We can't trust others to run their own large enterprises because they're fallible and aren't as smart as we are; we can only trust ourselves to run numerous large enterprises at once because ... well, we obviously know better.

[acmavm]

11. The people in this country are angry. Angrier than they've been

for a long time (although they should have been this vocal pre-Shock and Awe).

That's why Geithner is doing this. And that's the only reason.

People who think that they intended to do this all along are just so delusional.

[Imperialism Inc.]

38. Funny then that they have been talking about it since inauguration.

[No Elephants]

15. What ever happened to putting companies into

receivership, as has been done for centuries?

From wiki:

Receivership is used to denote a situation in which an institution or enterprise is being held by a receiver. In law, a receiver is a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights."<1> Various types of receiver appointments exist:<1>

a receiver appointed by a (government) regulator pursuant to a statute;
a privately-appointed receiver; and
a court-appointed receiver.<1> The receiver's powers "flow from the document(s) underlying his appointment – a statute, financing agreement, or court order.

more at http://en.wikipedia.org/wiki/Receivership

Why do we suddenly need to give Treasury all the powers Chavez just took upon himself and then some?

[flayellowdog]

17. No No NO

These foxes are the ones watching the henhouse. Throw them out!

Repeal the Gramm/Leahy/Bliley Act of 1999, Repeal the Commodity Futures Modernization Bill and ammend the Accounting and Auditing Act of 1950 requiring an audit of the Federal Reserve.

The bonuses and the TARP bailout are a distraction. We need to watch the Federal Reserve. They have pumped out over 5 Trillion dollars to private companies with no oversight this year. They don't use "Repurchase Agreements" anymore. That's too transparent. They have handed out this money completely in secret.

Our blind press doesn't seem to want to cover this.

[flyarm]

20. congress better damn well never give over their power..ever again , especially to this guy..

Tim Geithner worked for 3 years at Kissingers firm..and then the CFR.........yes Kissinger!!!!!!!!!!!!!!!!

Don't believe me??..look it up!! If the transparent one hasn't scrubbed it yet!!

the Kissinger I have despised as a dem my entire life!!

This is the same Kissinger so many 9/11 families and families and employees of the airlines involved with 9/11 fought tooth and nail along with most dems to get him removed from the 9/11 commission because of his heavy ties with Saudi Arabia!! And because of his nafarious background.

Look into the back ground of Geithners dad , Peter Geithner and his ties to Obama's mom and step dad!!

Google is your friend!!


See Obama sent Kissinger To Russia shortly after becoming president to represent the Obama administration in Russia..
Kissinger who held positions with Nixon, Ford and Reagan !!!!!!!!!!!!

why did Obama send Kissinger to Russia a few weeks ago , representing his administration and the USA..
lets see shall we??????

http://www.answers.com/topic/timothy-f-geithner

Timothy Geithner
Career
After completing his studies,Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988. He was deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996-1997), assistant secretary for international affairs (1997–1998).<

He was Under Secretary of the Treasury for International Affairs (1998–2001) under Treasury Secretaries Robert Rubin and Lawrence Summers.<5> Summers was his mentor,<1> but other sources call him a Rubin protégé.<9><10><11>


In 2002 he left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department.<7> At the International Monetary Fund he was director of the Policy Development and Review Department (2001-2003).<5>



this kissinger:

http://www.youtube.com/watch?v=GThfWVCfjVo&eurl=http ://...

"There is a need for a new world order," Kissinger told PBS interviewer Charlie Rose last year, "I think that at the end of this administration, with all its turmoil, and at the beginning of the next, we might actually witness the creation of a new order – because people looking in the abyss, even in the Islamic world, have to conclude that at some point, ordered expectations must return under a different system."


This is the Kissinger Obama sent to Russia........representing his administration..

http://www.theatlantic.com/issues/82may/hershwh2.htm

Kissinger and Nixon in the White House
by Seymour M. Hersh


http://www.commondreams.org/views02/0611-03.htm


and that is just for starters!!


http://www.democraticunderground.com/discuss/duboard.ph ...

Larry Summers and California Energy "crisis" / Enron

During the California energy crisis of 2000, then-Treasury Secretary Larry Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation.<8> Under the advice of Kenneth Lay, Summers urged Davis to relax California's environmental standards in order to reassure the markets.

.......................................................................

WSJ: Citi's Chief Economist Leaves for Treasury Post


Source: The Wall Street Journal

Citigroup Inc.'s chief economist is leaving the New York company for a job at the U.S. Treasury Department, according to an internal Citigroup memo.

Lewis Alexander, who has been at Citigroup since 1999 and before that worked at the Federal Reserve, will head to Treasury "to work on domestic financial issues," said the Citigroup memo, which was sent Tuesday.

According to a government official, Mr. Alexander will be a counselor to Treasury Secretary Timothy Geithner. Mr. Alexander and a Treasury spokesman weren't immediately available to comment Tuesday. A Citigroup spokesman declined to elaborate on the company's memo.
(...)
Mr. Alexander's role as Citigroup's chief economist didn't entail significant management responsibilities. But his optimistic economic forecasts colored executives' views that the U.S. was unlikely to face a prolonged slump.

Read more: http://online.wsj.com/article/SB123732747181462245.html

anyone have warm fuzzies yet?????????

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

who can make this crap up???????????


http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4530042/Cold-warrior-Henry-Kissinger-woos-Russia-for-Barack-Obama.html

Despite his pariah status with many Left-wingers in Mr Obama's Democratic Party, the president forged relations with Mr Kissinger during his campaign.

The compliment was returned when the 85-year-old veteran of the Nixon and Ford administrations said last month that the young president was in a position to create a "new world order" by shifting US foreign policy away from the hostile stance of the Bush administration.

He publicly supported Mr Obama's notion of unconditional talks with Iran, though not at the presidential level.

Further demonstrating his willingness to work with his opponents on foreign policy issues, Mr Obama turned to two veteran Republicans steeped in Cold War experience to press home his plans.

Shortly after Mr Kissinger's trip, Richard Lugar, a Republican senator from Indiana who has worked on nuclear disarmament issues for 30 years, also visited Moscow. George Schultz, another former secretary of state, has also played a vital role.

............................................................

[No Elephants]

27. I feel your pain. (No sarcasm intended, I really do feel it.)

[chill_wind]

29. Dear god. The black hole unitary wall street executive universe of Tim Geithner

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x61424

[BrightKnight]

28. They should be given bankruptcy type authority to

determine which stakeholders get paid how much. If that type of authority is not assured then AIG bonus type issues will pop up everywhere.

[flyarm]

40. they already have popped up everywhere!!!!!!!!

Citi Jet Purchase: $50 Million, 12-Seat Plane Despite $45 Billion Bailout

( understand this is not even an aircraft made in the USA..so let's see how many jobs were created by your tax dollars here at home..hmmmm zero.)

http://www.huffingtonpost.com/2009/01/26/citi-jet-purchase-50-mill_n_160807.html

watch this full interview.......

the FULL interview by Fareed Zakaria of Eliot Spitzer.

http://www.cnn.com/video/#/video/us/2009/03/22/fz.gps.spitzer.speaks.out.cnn?iref=videosearch