While the nomination of Treasury Secretary Timothy Geithner generated
plenty of heat because of his failure to pay income taxes for five
years, almost unnoticed amid the controversy is the fact that he
presided over the failure of some of the largest banking institutions
in the world – institutions he was charged with overseeing and
regulating as head of the New York region of the Federal Reserve Bank.
On Nov. 17, 2003, Geithner became the ninth president and chief
executive officer of the Federal Reserve Bank, a position he held
until he was nominated by President Obama as treasury secretary.
The Federal Reserve's charter makes it responsible for the strength of
the financial institutions operating in each of its 12 regional
districts. The Federal Reserve Bank of New York presides over Wall
Street-based financial institutions.
During Geithner's tenure as CEO of the New York Fed, he presided over
the following major economic failures:
* March 2008: Investment bank Bear Stearns collapses from losses
in subprime mortgage obligations and derivatives transactions; J.P.
Morgan Chase buys Bear Stearns in a deal arranged by the Federal
Reserve for the dramatically reduced value of $2 a share, with the
Federal Reserve guaranteeing J.P. Morgan against $30 billion in Bear
Stearns asset losses.
* September 2008: Wall Street investment bank Lehman Brothers
closes doors in bankruptcy after the U.S. Treasury and Federal Reserve
refuse to arrange a merger plan, a bailout or a guarantee program to
save the Wall Street giant.
* September 2008: The Bank of America buys Wall Street investment
bank Merrill Lynch in a $50 billion deal that saves Merrill Lynch from
having to declare bankruptcy.
* September 2008: The Federal Reserve extends to insurance giant
American International Group, or AIG, an $85 billion loan that saves
it from going bankrupt
from derivatives loses in a massive $441 billion exposure to
credit default swaps.
* November 2008: Citibank received $45 billion through the
Troubled Asset Relief Program, or TARP, plus Treasury Department,
Federal Reserve and FDIC guarantees on $306 billion in troubled assets
held by the bank.
* January 2009: Morgan Stanley takes over Citibank's Smith Barney
investment unit as Citibank unravels the "financial supermarket"
conglomerate accumulated when Sandy Weill combined Travelers
Insurance, investment bank Smith Barney and Citibank to form Citigroup
in the 1990s.
The Obama administration has touted Geithner as a financial wizard
uniquely qualified to preside over the U.S. Treasury during this
period of economic crisis, despite the obvious failure of the New York
Federal Reserve Bank to sustain the solvency of New York financial
institutions during his tenure.
http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=87497
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