US Treasury Secretary Timothy Geithner appears this week before lawmakers angry over his role in the bailout of insurance giant AIG, with concerns mounting over his role as the US administration’s top economic official.
Some analysts say Geithner, who was conspicuously absent during US President Barack Obama’s unveiling of tough proposals to regulate the banking system, may now be marginalized and could be on his way out.
“The first casualty of the president’s political debacle will likely be Timothy Geithner, the severely overconfident Treasury secretary well-known as a lapdog of Wall Street,” the left-leaning journal The Nation wrote.
“Geithner was effectively repudiated by the president last week when Barack Obama abruptly announced a new, more aggressive approach to financial reform. But the immediate threat to Geithner is the scandal of collusion and possibly illegal behavior gathering around the Federal Reserve Bank of New York for its mega-billion-dollar takeover of insurance giant AIG,” it said.
Today Geithner must answer questions before the House of Representatives Government Oversight Committee on his role — when he was president of the New York Federal Reserve — in the controversial AIG bailout.
The congressional panel said internal AIG emails obtained by the committee to date “indicate that the [New York Fed] may have urged AIG to keep secret the details of the counterparty payments, despite the fact that taxpayer dollars made the payments possible.”
The Fed provided a loan of US$85 billion to AIG in September 2008 in what would be the first portion of a staggering bailout worth some US$180 billion.
Because AIG used the funds to reimburse banks holding the distressed mortgage securities, some have called the move a “backdoor bailout” of those firms including Goldman Sachs and a number of foreign banks.
The details of the counterparty payments were initially kept secret but the recipients were disclosed last March.
The US$22.4 billion in payments were made to a number of firms. France’s Societe Generale, Germany’s Deutsche Bank and New York-based investment bank Goldman Sachs were the top three recipients.
Fed chairman Ben Bernanke, who has also taken heat over AIG and his economic stewardship, has welcomed congressional efforts to look into the AIG bailout. The New York Fed has delivered 250,000 pages of records that were requested by the House committee.
But with the political landscape shifting after a key Republican victory in a special Senate election last week, Geithner and Bernanke are now in the crosshairs of critics.
John Hussman of Hussman Funds said it is time to replace both Bernanke and Geithner.
“Since the beginning of the credit crisis, both of these bureaucrats have proven themselves to be ardent defenders of bank bondholders but a danger to the interests of the public,” Hussman wrote in a weekly commentary.
Thousands gathered across New Zealand yesterday to celebrate the signing of the country’s founding document and some called for an end to government policies that critics say erode the rights promised to the indigenous Maori population. As the sun rose on the dawn service at Waitangi where the Treaty of Waitangi was first signed between the British Crown and Maori chiefs in 1840, some community leaders called on the government to honor promises made 185 years ago. The call was repeated at peaceful rallies that drew several hundred people later in the day. “This government is attacking tangata whenua [indigenous people] on all
RIGHTS FEARS: A protester said Beijing would use the embassy to catch and send Hong Kongers to China, while a lawmaker said Chinese agents had threatened Britons Hundreds of demonstrators on Saturday protested at a site earmarked for Beijing’s controversial new embassy in London over human rights and security concerns. The new embassy — if approved by the British government — would be the “biggest Chinese embassy in Europe,” one lawmaker said earlier. Protester Iona Boswell, a 40-year-old social worker, said there was “no need for a mega embassy here” and that she believed it would be used to facilitate the “harassment of dissidents.” China has for several years been trying to relocate its embassy, currently in the British capital’s upmarket Marylebone district, to the sprawling historic site in the
A deluge of disinformation about a virus called hMPV is stoking anti-China sentiment across Asia and spurring unfounded concerns of renewed lockdowns, despite experts dismissing comparisons with the COVID-19 pandemic five years ago. Agence France-Presse’s fact-checkers have debunked a slew of social media posts about the usually non-fatal respiratory disease human metapneumovirus after cases rose in China. Many of these posts claimed that people were dying and that a national emergency had been declared. Garnering tens of thousands of views, some posts recycled old footage from China’s draconian lockdowns during the COVID-19 pandemic, which originated in the country in late
BACK TO BATTLE: North Korean soldiers have returned to the front lines in Russia’s Kursk region after earlier reports that Moscow had withdrawn them following heavy losses Ukrainian President Volodymyr Zelenskiy on Friday pored over a once-classified map of vast deposits of rare earths and other critical minerals as part of a push to appeal to US President Donald Trump’s penchant for a deal. The US president, whose administration is pressing for a rapid end to Ukraine’s war with Russia, on Monday said he wanted Ukraine to supply the US with rare earths and other minerals in return for financially supporting its war effort. “If we are talking about a deal, then let’s do a deal, we are only for it,” Zelenskiy said, emphasizing Ukraine’s need for security guarantees