Sense on Cents

Treasury Secretary Geithner has adapted to Washington very quickly. How so? His willingness and ability to distort and conceal  the truth is consistent with much of what emanates from our nation’s capital. I literally gagged upon reading the extremely superficial commentary in today’s Wall Street Journal, Geithner Sees Good Vital Signs:

U.S. Treasury Secretary Timothy Geithner said the Obama administration wouldn’t allow Wall Street to return to such old habits as taking on excessive risk, and that plans to overhaul financial-market regulation were on track.

Does Secretary Geithner think that people do not monitor these issues? His statements in this article are the equivalent of a Wall Street bond salesman’s assertion “trust me on this,” while jamming an overpriced security down his client’s throat. My response, “challenge!!” Let’s navigate.

Geithner asserts:

“I don’t think the financial system is reverting to past practice, and we won’t let that happen,” Mr. Geithner said. “The big banks are running with much less leverage now, much more conservative liquidity cushions, there’s been a significant shrinking of their balance sheets, getting rid of bad assets (LD’s highlight) and cleaning up. And the weakest parts of the system don’t exist anymore.”

Sense on Cents challenge: the system is chock full of toxic assets. The new-issue securitization market for consumer assets remains largely dormant and the TALF and PPIP programs are largely a joke. I submit “PPIP: A Virtual Odd Lot” (July 7, 2009).

The Wall Street Journal continues: (more…)