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Curtis</font></b><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b><a href="books.html"><br> </a></b></font><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> (310) 204-8700</b></font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright November 21, 2008<br>All Rights Reserved. </i></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <p class="MsoNormal"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span class="style4">W</span>all Street performed its latest gryration, rocketing up the Dow 494 points or 6.5% after CNBC leaked that New York Fed president Timothy Geithner would be President-elect Barack Obama s pick for Treasury Secretary.<span style="mso-spacerun: yes">&nbsp; </span>While Geithner had been rumored for some time, speculation centered on old-timers, former Clinton Treasury Secretaries Lawrence Summers and Bob Rubin and former Fed Chairman Paul Volcker.<span style="mso-spacerun: yes">&nbsp; </span>Geithner has worked closely with current Treasury Secretary Hank Paulson on fixing the nation s economic mess.<span style="mso-spacerun: yes">&nbsp; </span>Picking Geithner, a 47-year-old graduate of Dartmouth and Johns Hopkins, was forward-thinking, rather than looking back.<span style="mso-spacerun: yes">&nbsp; </span>Paulson, and his assistant Neel Kashkari, have taken heat in recent days for reversing course on the Toxic Assets Relief Program [TARP].<span style="mso-spacerun: yes">&nbsp; </span>Paulson spent the last week urging the $700 billion is best spent on buying bank stocks.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Despite today s exception, the market lost over a thousand points since Paulson announced Nov. 12 he decided against buying bad assets.<span style="mso-spacerun: yes">&nbsp; </span>Paulson and Fed Chairman Ben Bernanke sold Congress Sept. 21 on a $700 billion bailout to buy up bad commercial paper or so-called  toxic assets. <span style="mso-spacerun: yes">&nbsp; </span>Paulson gave his friends and critics second thoughts, insisting helping distressed homeowners was not the best path toward fixing the nation s paralyzed financial markets.<span style="mso-spacerun: yes">&nbsp; </span>Federal Deposit Insurance chief Sheila Bair sees it otherwise, believing mortgage relief is the key to jumpstarting the economy.<span style="mso-spacerun: yes">&nbsp; </span> Judging by Geithner s support of Paulson, he also looks to strengthen the banking system.<span style="mso-spacerun: yes">&nbsp; </span> A fantastic choice to help lead the financial markets out of the wilderness, said Chris Pupkey, senior economist for the Bank of Tokyo-Mitubishi in New York, speaking of Geithner s choice to lead the Treasury.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>After receiving his masters in Advanced International Studies at Johns Hopkins in 1985, Geithner joined Kissinger &amp; Associates, leaving in 1988 for the Treasury Dept. under Donald Regan.<span style="mso-spacerun: yes">&nbsp; </span> In 1999, he was promoted to Under Secretary of the Treasury serving under former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers.<span style="mso-spacerun: yes">&nbsp; </span>He then left in 2002 to work at the Council for Foreign Relations and International Monetary Fund.<span style="mso-spacerun: yes">&nbsp; </span>In 2003, Geithner was appointed president of the New York Fed, serving as Vice Chairman of the Fed s Open Market Committee, setting the nation s monetary policy.<span style="mso-spacerun: yes">&nbsp; </span>Geithner fits the bill of  whiz kid, a prodigy that moved up the ranks quickly. <span style="mso-spacerun: yes">&nbsp;</span> This is an excellent choice.<span style="mso-spacerun: yes">&nbsp; </span>He knows where all the bones are buried on Wall Street, said Tom Sowanick, chief investment officer at Chearbook Financial LLC in Princeton, NJ.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Geithner was Wall Street s excuse <i>du jour</i> for staging a furious rally.<span style="mso-spacerun: yes">&nbsp; </span>Whether admitted to or not, the market was oversold, ready for a dramatic upswing.<span style="mso-spacerun: yes">&nbsp; </span>With the economy stuck in reverse, today s gains could easily evaporate, as the market revalues stocks.<span style="mso-spacerun: yes">&nbsp; </span> A crisis manager par excellence who will hit the ground running as he has been on the case since the global fund crisis began way back in July 2007, said Rubkey, voicing his approval of Geithner.<span style="mso-spacerun: yes">&nbsp; </span>Geithner will have to confront some entrenched interests to bring the change to Wall Street needed to woo back skeptical investors.<span style="mso-spacerun: yes">&nbsp; </span>While fund managers will jump back in, small investors, especially those putting their retirements at risk, can t afford to be burned again by pie-in-the-sky promises about hefty returns and secure investments.<span style="mso-spacerun: yes">&nbsp; </span>Geithner will have to work hard to convince small investors to trust Wall Street again.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Paulson echoed former Fed Chairman Alan Greenspan s view that the U.S. banking crisis was a  once in a lifetime event, harking back to the financial panic of 1907, prompting Congress in 1913 to pass the Federal Reserve Act.<span style="mso-spacerun: yes">&nbsp; </span>While banks have been reluctant to lend since last summer, they ve been flooded with trillions of dollars in cash since September.<span style="mso-spacerun: yes">&nbsp; </span>Paulson has never explained how or why U.S. financial markets collapsed.<span style="mso-spacerun: yes">&nbsp; </span>He suggested originally that bad mortgage-backed securities caused the banking cash-crunch.<span style="mso-spacerun: yes">&nbsp; </span>His Nov. 12 decision to shy away from buying  toxic assets indicates otherwise.<span style="mso-spacerun: yes">&nbsp; </span>Reports about banks using the bailout for mergers and acquisitions, executive compensation and extravagant junkets raise eyebrows.<span style="mso-spacerun: yes">&nbsp; </span>Once Paulson steps down, Geithner must determine, once and for all, whether banks have been pleading poverty at taxpayers expense.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Picking Geithner signaled that Obama looks to the future when it comes to fixing the economy.<span style="mso-spacerun: yes">&nbsp; </span>His rumored pick of Sen. Hillary Rodham Clinton (D-N.Y.) for Secretary of State and other old Clinton Cabinet hands indicates it s difficult making a clean break.<span style="mso-spacerun: yes">&nbsp; </span>Obama knows that Clinton comes with her own entourage, a cadre of old consultants and personal assistants that go with her brand.<span style="mso-spacerun: yes">&nbsp; </span>Obama buys stature and prestige with Clinton, one of the most influential and recognized women leaders on the planet.<span style="mso-spacerun: yes">&nbsp; </span>With Geithner, he gets brilliance and freshness, important qualities when navigating the unknown territory of today s economic mess.<span style="mso-spacerun: yes">&nbsp; </span> I think the administration is off to a good start, said Senate Republican majority leader Mitch McConnell (R-Ken.), giving the president-elect high marks. Unlike other honeymoons with new presidents, Obama knows he faces high expectations.</p> <p class="MsoNormal"> <bAbout the Author</u><b>John M. Curtis</b> writes politically neutral commentary analyzing spin in national and global news.&nbsp; He's editor of OnlineColumnist.com and author of <i><a href="books.html">Dodging The Bullet</a> </i>and <i><a href="books.html"> Operation Charisma</a></i>.</p> </td> <td width="1" height="2576" rowspan="2"></td> <td width="1" height="2"><spacer type="block" width="1" height="2"></td> </tr> <tr height="2574"> <td width="133" height="2574" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="1" height="2574"><spacer type="block" width="1" height="2574"></td> </tr> <tr height="1" cntrlrow> <td width="133" height="1"><spacer type="block" width="133" height="1"></td> <td width="7" height="1"><spacer type="block" width="7" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="300" height="1"><spacer type="block" width="300" height="1"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Home</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> || <a href="articlesindex.html">Articles</a> || <a href="books.html">Books</a> || <a href="teflon.html">The Teflon Report</a> || <a href="mailto:letters@onlinecolumnist.com"> Reactions</a> || <a href="aboutdiscobolos.html">About Discobolos</a></strong></font> <div align="left"> <p><font size="1" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">This site designed, developed and hosted by the experts at</font><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"> <a href="http://www.cmeonline.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">©1999-2005 <a href="aboutdiscobolos.html"> Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>