Results tagged “treasury”

While Treasury Secretary Timothy Geithner says the U.S. government is demanding that the AIG pay back extravagant bonuses, some suggest he should have known about the "retention compensation" since he was NY Federal Reserve chairman when the government bailed out the insurer. Senator Christopher Dodd even said that the Treasury forced him to add language to the stimulus bill that created a loophole preserving the bonuses. The NY Times's feature on Geithner calls this a "defining moment," reporting how he works 15 hour days and that he's doing of work "without the usual complement of Treasury assistants because of administration delays in vetting potential nominees — a consequence in part of its efforts to avoid embarrassments like the disclosures of Mr. Geithner’s past tax lapses." Political consultant Joe Trippi tells Politico that Geithner needs to fight back or else, "Some of this anger that is dissipated when it is aimed at AIG or Treasury could start to take a toll on the president and the White House."

Treasury Secretary Timothy Geithner didn't get the reception he was probably hoping for after revealing the new bank bailout plan that may involve $2 trillion: The Dow Jones Industrial Average has fallen over 300 points/almost 4% (at this point), and the S&P 500 has dropped over 4% and the Nasdaq is off by 3.54%. The main complaint: The lack of details. Asset manager Joseph Keating told Bloomberg News, "The lack of clarity [on the public-private investment fund] has the market upset. Nationalization could have been a better outcome for some banks.” Another investment strategist said, “Everybody is disappointed in the lack of details. They came out and said, ‘We want you to believe that we’re still working on this.’ Well, we knew that last night.”

Treasury Secretary-designate Timothy Geithner, who was recommended for confirmation by the Senate Finance Committee (vote: 18-5), has strong words for China. The written statement read, "President Obama — backed by the conclusions of a broad range of economists — believes that China is manipulating its currency." The NY Times points out, "The Bush administration purposely did not use the term 'currency manipulator' to avoid antagonizing the Chinese, even when it was criticizing China’s trade policies." A China-U.S. relations expert tells Reuters "China is going to be extremely unhappy, to say the least. For administration officials, I do not think any one has ever pointed a finger so strongly at China," and a former U.S. Trade official said to Bloomberg, "It opens a Pandora’s box. We need the Chinese to hold onto their Treasury and agency debt." However, Rep. Charles Rangel was on board: "What they can’t work out diplomatically we can work out legislatively. The [Ways & Means] committee has been saying for years [that China has manipulated the yuan’s value.]" China has about $1 trillion of U.S. debt.

Treasury Secretary-designate Timothy Geithner is back in front of the Senate, his first appearance since revelations that he didn't pay $34,000 in taxes between 2001 and 2004, and he said it was "careless, and avoidable, but unintentional... I should have been more careful." The unpaid taxes were apparently due to Geithner's "freelance" work at the IMF, which did not take out money for taxes; Geithner was alerted to the oversight while the Obama transition team was vetting him last fall and he paid the taxes plus interest. At any rate, CNBC says Geithner is expected to be confirmed, "barring a major misstep at the hearing." And in his opening remarks, the day after Wall Street's big Inaugural Day egg, Geithner said, "Our test is to act with the strength, speed and care necessary to get our economy back on track."

Goldman Sachs chairman. While billionaires Donald Trump and Wilbur Ross think Corzine would be great, the governor said, "I'm not going to say never to anything. I want to be very clear: I like what I'm doing. I have not had any conversations with anybody about this job. People can speculate--it's nice, my mother will like it. The reality is there are a lot of good people." His pick would be 82-year-old Paul Volcker, the former Federal Reserve chairman who many credit with ending 1970s stagflation.

Sure, as the NY Times reports, "Bailout Talks Advance" between Congress and the Bush administration over the $700 billion financial institutions bailout. But the two sides have differences of opinions on things like executive pay, reducing "mortgage payments of borrowers facing foreclosure," and whether the taxpayers should get a stake in companies the U.S. bails out. The Wall Street Journal also details some of the issues with the plan, from both Republicans and Democrats.

The government took more steps to, hopefully, prevent more financial chaos in the financial markets. The NY Times characterizes the moves as "what could become the biggest bailout in United States history":

While details remain to be worked out, the plan is likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions. The proposal could result in the most direct commitment of taxpayer funds so far in the financial crisis that Fed and Treasury officials say is the worst they have ever seen.

Treasury Secretary Henry Paulson and Fed Chaiman Ben Bernanke met with Congressional leaders, as they would need to enact legislation to push this through. Some more details about the half a trillion dollar (or thereabouts) plan at CNBC.