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.
Heavy rain and strong winds yesterday disrupted flights, trains and ferries, forcing the closure of roads across large parts of New Zealand’s North Island, while snapping power links to tens of thousands. Domestic media reported a few flights had resumed operating by afternoon from the airport in Wellington, the capital, although cancelations were still widespread after airport authorities said most morning flights were disrupted. Air New Zealand said it hoped to resume services when conditions ease later yesterday, after it paused operations at Wellington, Napier and Palmerston North airports. Online images showed flooded semi-rural neighborhoods, inundated homes, trees fallen on vehicles and collapsed
FRAYED: Strains between the US-European ties have ruptured allies’ trust in Washington, but with time, that could be rebuilt, the Michigan governor said China is providing crucial support for Russia’s aggression in Ukraine and could end the war with a phone call, US Ambassador to NATO Matthew Whitaker said. “China could call [Russian President] Vladimir Putin and end this war tomorrow and cut off his dual-purpose technologies that they’re selling,” Whitaker said during a Friday panel at the Munich Security Conference. “China could stop buying Russian oil and gas.” “You know, this war is being completely enabled by China,” the US envoy added. Beijing and Moscow have forged an even tighter partnership since the start of the war, and Russia relies on China for critical parts
Two sitting Philippine senators have been identified as “coperpetrators” in former Philippine president Rodrigo Duterte’s crimes against humanity trial at the International Criminal Court (ICC), documents released by prosecutors showed. Philippine senators Ronald Dela Rosa and Christopher Go are among eight current and former officials named in a document dated Feb. 13 and posted to the court’s Web site. ICC prosecutors have charged Duterte with three counts of crimes against humanity, alleging his involvement in at least 76 murders as part of his “war on drugs.” “Duterte and his coperpetrators shared a common plan or agreement to ‘neutralize’ alleged criminals in the Philippines
In a softly lit Shanghai bar, graduate student Helen Zhao stretched out both wrists to have her pulse taken — the first step to ordering the house special, a bespoke “health” cocktail based on traditional Chinese medicine (TCM). “TCM bars” have popped up in several cities across China, epitomizing what the country’s stressed-out, time-poor youth refer to as “punk wellness,” or “wrecking yourself while saving yourself.” At Shanghai’s Niang Qing, a TCM doctor in a white coat diagnoses customers’ physical conditions based on the pulse readings, before a mixologist crafts custom drinks incorporating the herbs and roots prescribed for their ailments.
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