Sense on Cents

Is Treasury Secretary Geithner on the hot seat? With populist anger rising in the land, will Geithner be Obama’s sacrificial lamb to appease the masses? Why is Geithner in the line of fire?

1. the economy.

2. perception that he is the chair of the “Wall Street-Washington Incest Club.”

3. the disregard for our currency.

4. does not command full respect in the international community.

Geithner is getting hit with volleys from both sides of the aisle. Is the tepid support provided by the White House an indication that Tim is being readied to be fed to the wolves or simply an unwillingness to acknowledge the topic?

The fact is, the economy is not going to improve anytime soon. Obama’s approval ratings have declined along with the economy. Obama has already indicated his support for Ben Bernanke’s return as Fed chair. While the administration would prefer the topic of Geithner’s fate to go away, it is picking up momentum. Bloomberg discussed Geithner’s potential dismissal this morning.

Who would be Geithner’s likely replacement? JP Morgan’s CEO Jamie Dimon. The Financial Times highlights this potential in writing, Secretary Dimon:

Media speculation that Jamie Dimon, JPMorgan Chase chief executive, is in the running to succeed Timothy Geithner, embattled US Treasury secretary, may not be as far-fetched as sceptics suggest. Having already committed himself to reappointing Ben Bernanke as Federal Reserve chief, Mr Geithner might be a convenient candidate for Barack Obama to throw under the bus as unemployment surges. Though Mr Geithner is only two weeks younger than the president and five younger than Mr Dimon, he lacks their gravitas.

Geithner has been in the cross-hairs before. I evidenced as much in writing last March 20th, “Will Jamie Dimon Be the Next Treasury Secretary?”:

The pressure on Treasury Secretary Tim Geithner is increasing from within the Democratic Party, across the aisle, and the media. Will Tim be fed to the lions? Well, the standard procedures of implementing change seem to be occurring. What are those steps?

JP Morgan Chairman and CEO, Jamie Dimon

1. A vote of confidence by the Administration. Always a kiss of death!2. Leak the name of a strong prospective secretary.

Who might that be? JP Morgan Chairman and CEO, Jamie Dimon.Dimon is enormously well respected in Washington and Wall Street. He can quickly build a team. He has run very large organizations. He has been a longtime Democratic supporter and publicly promoted President Obama and his plans.

I find it interesting that Dimon’s name was bandied about last October as a prospective leader of Treasury.  Market Watch highlighted this fact in reporting The Next Treasury Secretary Is…

As the firestorm over the prospective legislation to restrict Wall Street bonuses grows, do not be surprised to see Dimon ride in on the white horse to broker peace between Washington, the financial community, and the public at large.

While I do not expect anything to happen with Geithner between now and year end, I would not be surprised to see Geithner exit and Dimon enter early in 2010. Were the recent management changes at JP Morgan made in anticipation of this move by Dimon? Perhaps.

Would the administration make this change if it thought it might bump Obama’s approval ratings three to five points? Without a doubt.

What is the over-under on Tim’s days in Washington?

What do you think?

LD

This entry was posted on Wednesday, November 25th, 2009 at 8:51 AM and is filed under General, Jamie Dimon, Tim Geithner. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.