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American and Latin American Politics, Society, and Culture

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Somebody stands to make a bundle if Corzine takes the job

As the US debt shot up $238 billion to reach 100 percent of gross domestic project after the government’s debt ceiling was lifted, noted tax cheat Timothy Geithner may resign,

After the resolution of the debt-ceiling impasse, rumors have been flying that the last senior member of Barack Obama’s original economic team will call it quits.  Treasury Secretary Tim Geithner refused to answer questions about his plans yesterday on ABC’s Good Morning America

The rumor is that Jon Corzine may take the job.

Interestingly, MF Global, Corzine’s employer, just added what the Wall Street Journal calls a “quirky clause“,

Mr. Corzine’s current employer, MF Global Holdings Ltd., is promising to compensate investors who buy his company’s bonds with an interest-rate bump if the chief executive and former U.S. senator jumps ship for a government job. In essence, the securities deal assigns a value on the man filling the corner office: a one-percentage-point cherry atop the $300 million bond offering, or up to $15 million.

And not just “any job”, either (emphasis added),

According to a “Key Man Event” clause in the bond prospectus, the carrot doesn’t kick in for any old government job. Rather, it gets paid only if Mr. Corzine leaves MF Global “due to his appointment to a federal position by the President of the United States,” and the Senate confirms him before July 1, 2013. That is nearly six months into the next presidential term.

MF Global’s value hasn’t improved during Corzine’s tenure, but it certainly looks like someone will make a bundle from his departure.

UPDATE,
The NYT headline reads, “Pressured by White House, Treasury Secretary Is Expected to Stay at Post“, but, as Doug Mataconis points out,

The New York Times gives this story the headline “Pressured by White House, Treasury Secretary Is Expected to Stay at Post,” but from the tone of the article it’s pretty clear that this is what the White House officials quoted in the story hope is the case. Indeed, the story itself may be an effort to turn the lobbying of Geithner up a notch.

Clearly, the NYT is not in the MF Global orbit.

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Geithner’s unemployment meme for the November elections VIDEO

It’s August, the November Congressional elections are coming up, the Dems are worried, and unemployment is “unexpectedly” high.

Time to roll out the meme!

Treasury Secretary Timothy Geithner, the guy who was stumped by TurboTax, is paving the meme you’ll be hearing from pundits, journalists (and journolisters, too?), and Dem apologists:

Treasury Secretary Timothy Geithner: Unemployment Could Go Up Before It Comes Down
Unemployment Could Rise ‘Temporarily’ As More People Enter Labor Force

“When they see a little hope that there may be jobs out there, they start to come back in again. And that can cause the measured unemployment rate to go up — temporarily,” Geithner told “Good Morning America’s” George Stephanopoulos in an exclusive interview. “But what we expect to see, and I think most forecasters expect this…is an economy that’s gradually healing, gradually strengthening, businesses starting to add people back.”

And just so you can start looking at things with Tim’s rose-colored glasses, he’s got an op-ed in today’s NYTimes titled, “Welcome to the Recovery“.

Unemployment is a sign of recovery, eh? Of course it is! After all, Nancy would have you believe that unemployment benefits are creating jobs faster than practically any other program. Unless it’s unexpectedly rising job losses, perhaps?

James Pethokoukis has the fictional emails…

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How to aggravate the Germans

…and make things worse:
Geithner Plans to Press Germany on European Rescue
Parliament in Berlin Approves Country’s Share of Massive Bailout Fund; U.S. Treasury Secretary to Meet With Schäuble

Treasury Secretary Timothy Geithner is bringing two messages to officials in Berlin next week: be more sensitive to potential market reactions to policy moves, and work faster on the massive European rescue program that German lawmakers blessed Friday, approving the country’s €147.6 billion ($182.93 billion) contribution.

Since the bailout here worked so well, let’s go tell the Germans to speed up their bailout of Greece.

What could go wrong?

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Kumar Goes to White House

If you watch House MD but didn’t watch last night*, please note,

SPOILERS AHEAD
You’ve been told

kalpennhouse_l

Kal Penn, formerly Kumar of Harold & Kumar Go to White Castle, is going to be the associate director in the White House office of public liaison.

Will Cuddy and House have sex before those 25 vacancies have been filled in the Treasury Department? We’re yet to find out.

However, fans will be happy to learn that Kumar’s now at the White House.

Maybe they could get the guys from Boston Legal for Treasury, or at least Denny Crane to head the AFT.

* No, I stopped watching House a while ago because I find him too annoying. That, and those brain biopsies for ingrown toenails he keeps doing.

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Geithner’s on-the-job training

geithnerThe guy who was stymied by TurboTax, who was hurriedly approved by Congress because he was “the only one who could get us out of this mess”… is learning on the job:

China and the Dollar
Markets don’t like Treasury talking down the dollar’s status.

No sh*t, Sherlock!

As if the dollar didn’t have enough problems, Timothy Geithner took China’s bait yesterday and said he was “quite open” to its suggestion this week to displace the greenback with an “international reserve currency.” The dollar promptly fell and stocks followed, before the Treasury Secretary re-emerged to say “the dollar remains the world’s dominant reserve currency. I think that’s likely to continue for a long time.”

Ooopsie!

Mr. Geithner is learning on the job, and yesterday’s lesson is that it isn’t smart to fool with currency markets when you are already tempting fate with a gigantic U.S. reflation. Treasury and the Federal Reserve are flooding the world with dollars to break the recession, and the world is rightly getting nervous.

Now comes the worrying part:

Ms. Hu isn’t alone, and we only wish the Treasury, the White House and the Fed were equally as concerned. The dollar’s status as a reserve currency gives the U.S. enormous advantages, and it should be protected ferociously by our public officials. It means we don’t have to repay our debts in foreign currency and that our borrowing costs are cheaper. To the extent that the rest of the world follows a dollar standard, it also gives us far greater global sway.

What has me worried is that the Treasury, the White House and the Fed
a. don’t appear to be concerned (I’d say, they don’t appear to even be aware) of how dangerous this is
b. or, if they are, they don’t give a damn.

Scared Monkeys asks, What is the Obama Administration doing … Are they that obtuse or is it intentional?

Mark Steyn suggests,

I understand the advantage to President Obama of having Toxic Tim in place as designated fall guy for a month or two hence, but in the meantime maybe they could keep him duct-taped to a chair in the basement.

By now I am convinced that 1,000 people picked at random from the phone book (any phone book) would be doing a better job than Geithner. No wonder Treasury can’t fill the job vacancies.

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The $410 billion spending bill, and the Cuba ammendments: 15 Minutes on Latin America

In today’s podcast at 11AM Eastern, Congress passed the $410 billion spending bill (which is not to be confused with the bailout, the stimulus, or the budget), which was approved after Timothy Geithner wrote a letter to three Senators.

When asked about the letter from the guy who was stumped by TurboTax, White House spokesman Robert Gibbs said:

“It’s like a presidential signing statement, except it’s not the president, and it’s not a signing statement.”

Upcoming showdown?

Chat’s open at 10:45AM. See you there!

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