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If you are a liberal and really want to read this book, make sure you select the print copy. In summary, the book is basically a defense of his behavior during the banking crisis which required an enormous stimulus to prevent a depression, which it did successfully. He largely ignores the responsibility of his own party in bringing about this debacle for Americans to face. He complains about his work load, an intransigent Congress, the morass of the political process, and his lack of family contact. He completely disregarded the culpability of the Democrats when they repealed Glass-Steagall which helped to bring about the banking debacle that created a situation which almost destroyed the world’s economy as well as our own.
And that is where the main story begins as Mr. Geithner describes the events that led to the panic, the actions he took as FRBNY chair and then Treasury Secretary, why they took them, and why they were necessary even if they were both unpopular and counterintuitive. The book reaches its climax with the stress tests backed by promises of capital injections for those banks the tests deemed were in need of them.
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Timothy F. Geithner was the seventy-fifth secretary of the U.S. Department of the Treasury and previously served as president and chief executive officer of the Federal Reserve Bank of New York. He wrote this book as a distinguished fellow at the Council on Foreign Relations. I like Geithner’s metaphor of a stress test—and his book is very much worth reading, especially for its account of the crisis.
How should we think about the economic policy of these past seven or so years? Geithner, while acknowledging the disappointments, would have us view it mainly as a success story, because things could have been much worse. And the middle third of his book, a blow-by-blow account of the acute phase of the financial crisis, carries the implicit and sometimes explicit message that things would indeed have been much worse but for the heroic actions of a handful of high officials, himself included. Interestingly, Geithner has little sympathy for those who wanted to see Wall Street bankers held accountable for whatever it was they had done.
About Timothy F Geithner
That takes policies that go well beyond saving financial institutions—policies like sustained fiscal stimulus and debt relief for families. Unfortunately, such policies were never forthcoming on a remotely adequate scale, which is why true recovery has remained so elusive.
Its very clear how the implosion of LTCM served as prelude to the financial crisis. First, I am a former Federal Banking regulator who helped clean up the S&L crisis and a couple other issues in the 1980s and 1990s. So, I was delighted to have a chance to listen to Mr. Geithner’s take on the financial crisis of . Geithner’s cleverly-named “Stress Test” is the Treasury Secretary’s attempt to convince us that everything we believed was wrong. (You can feel the struggle of Geithner trying to pull at the dominant narrative by watching the painful and uncharacteristically not-funny 45-minute interview with Jon Stewart .) Geithner sat at the very center of the storm from beginning to end. First as head of the New York Federal Reserve, the regulator most entwined with the Wall Street firms, he oversaw the early rumblings of crisis as well as the rescue of Bear Stearns and the failure of Lehman Brothers. Then, as Treasury Secretary, he oversaw TARP, the auto bailout, Dodd-Frank and every other aspect of the financial rescue.
Review Of stress Test: Reflections On Financial Crises By Timothy F Geithner
But the other part is that any story in which the protagonist saves us all from disaster by giving cash to big banks is not a story that can easily put us at ease. Tim Geithner is one of few Beltway insiders I have ever followed on Youtube. He’s an awkward but strangely captivating public speaker, a humble but competent bureaucrat who rises above the political theater of Washington to deliver pragmatic solutions to our economic woes, most often in an exasperated monotone. Secretary Geithner pointed out in his book that Governor Volcker believes that the last useful innovation to come from the banking and financial services industry was the ATM.
He has also pointed out that Warren Buffett believes that derivative securities are financial weapons of mass destruction. Yet, we see no effort by the US Congress or banking and financial services regulatory agencies to do anything to restrict such highly unpredictable, insidious and destructive instruments from the marketplace. Histories of the financial meltdown in we have heard before, but what we learn from Geithner’s personal history is how the crisis looked Currency Trading Roots from his desk, what he was thinking, who he was talking to, and how, as the crises widened, his perceptions changed or crystallized. This type of meltdown crisis will probably happen again, especially if our political system continues to fail. We may not use the methods Geithner used to repair the damage in the future, but everything he did will be considered in the next crisis, combed over and debated, regardless of political affiliation and ideology.
Stress Test: Reflections On Financial Crises(overdrive Mp3 Audiobook, Overdrive Listen)
Geithner knows what we think happened and he addresses each of our facts with other facts, each opinion with an insider’s take and each objection with a “reality check.” He did not want to bail out banks for the bank’s sake. He expresses disdain for their excess, stupidity, and herd behavior. He wants us to know that his team bailed them out to save the economy and the public from their collapse. The fear that drove him was not Wall Street failure, but America’s demise.
- I find the financial world boring and have never had a desire to read about it.
- We may not use the methods Geithner used to repair the damage in the future, but everything he did will be considered in the next crisis, combed over and debated, regardless of political affiliation and ideology.
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- regardless of what the government did and the best way to ensure people could stay in their house was to restart the economy and make jobs available.
- He’s an awkward but strangely captivating public speaker, a humble but competent bureaucrat who rises above the political theater of Washington to deliver pragmatic solutions to our economic woes, most often in an exasperated monotone.
- This book gives a excellent view of what it was like inside the Fed and treasury during those years.
For the sake of this review, I’m going to focus more on the style and overall content of the book, since I’d hate to dwell on all of the nuances. regardless of what the government did and the best way to ensure people could stay in their house was to restart the economy and make jobs available. The gov also had very limited power in rewriting mortgages and crafting legislation to help home owners would have taken far too long and been too politically difficult.
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I think theres a compelling case to be made that the EU never really recovered from the crisis. Furthermore if anyone thinks that dealing with congress of the overlapping/balkanized American regulatory environment is bad, dealing with all the different EU countries must be hellish. Without a centralized fiscal/regulatory union, I think the European project is going to remain stalled http://stylesfit.com/beaxy-exchange-token-sale-review-hey-everyone/ out and will eventually collapse. If any one country can effectively veto the response, its only a matter of time till the whole thing blows up. The classic way to stop a panic, lend to healthy institutions that are temporarily cash crunched, looks like a bank bailout. I think one of the fundamental takeaways from this book is that by and large, banks were NOT bailed out.
Everyone knows the basics of the story, so I won’t spend any time on the chronology. Besides, Geithner’s book really reads more like a defense attorney’s closing argument, if that attorney had the personality of an undertaker. Geithner is not a natural story-teller in print, and so the book is dry, cumbersome, and even tedious in some parts. For both the good and bad outcomes of that approach, Geithner is unapologetic.
It did give me more respect for Geithner although it felt like he could have left out some of the name dropping and negativity that was added in gratuitously. I must admit that I had an easier time reading his memoir because I was very familiar with the financial issues that very nearly led to the collapse of the international financial system. Those readers that are not as familiar with financial derivatives, risk management and other banking terms may have trading strategy a tougher go at this. However, it is one thing to say that one can study Finance, it is another to say one has experience with Finance. I also came to understand another factor that fueled the Tea Party movement, which gave rise to President 45. So I guess I didn’t need to read a book telling me this in painstaking whine after whine. But I am disappointed that there is literally nothing more in this book apart from the world’s most tedious apologia.
This can turn into a self-reinforcing spiral, as falling incomes make debt seem even less supportable, leading to deeper cuts; but in any case, the overhang of debt can keep the economy depressed for a long time. It’s not hard to understand where this grim assessment comes from. Output and employment have indeed been growing over the past five years, but slowly. Thanks to the depressed state of the economy, it’s still very hard to find a full-time job—both the number of long-term unemployed workers and the number of people unable to find full-time jobs remain far above pre-crisis levels. As investors pulled their funds from shaky firms, those firms were forced into frantic fire sales of assets; such sales depressed the prices of the collateral used by other banks, producing further investor panic. But confidence in itself is not enough to deal with the broader consequences of a debt overhang.
Geithner is invested in writing the history of the crisis from his perspective and he is honest and thorough as he does it, but maybe what he views as noisy naysayers and “fundamentalists” weren’t just obstructionists who didn’t appreciate the gravity of the situation. Timothy Geithner has not written the typical Presidential Cabinet Secretary memoir. It means that this book is not written by a politician, trying to skirt around difficult subjects and personalities, worried about either offending someone or possibly having negative political repercussions come in the future. That is because Geithner, Barack Obama’s first Secretary of the Treasury, is not a politician nor a Washington insider. The result is a refreshingly candid autobiography, full of personal anecdotes, self-criticisms, and criticisms of those that he had to work with in some capacity or another. Something we may not value enough is his ability to withstand withering abuse from those who disagreed with him.
Geithner also makes some demonstrably false statements about the public debate over stimulus. “At the time,” he declares, “$800 billion over two years was considered extraordinarily aggressive, twice as much as a group of 387 mostly left-leaning economists had just recommended in a public letter.” Um, no.
I wish I had pushed harder to improve the financial system’s ability to withstand a crisis of confidence when I was at the New York Fed. I wish I had figured out a way to respond more aggressively to the initial panic, and to sustain the initial power of our fiscal stimulus. I wish we had expanded our housing programs earlier, to relive more pain for homeowners.
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Those CDOs were thought by the rating agencies to be investment grade because they spread the risk of default over many different mortgages. The amount of trading in such securities reached an astonishing $530 trillion (that’s right,trillions) of dollars before the underlying mortgages began to defaulten masse. The banks, especially the investment banks, were thinly capitalized. Significantly, their capital was largely in short term borrowings that could flee with the merest hint or rumor of insolvency, while their assets were primarily in longer term instruments like home mortgages or the complicated securities derived from or backed by such mortgages. Join our Signed First Edition Club for a signed book of great literary merit, delivered to you monthly. As with all web or phone orders, we can hold your book for in-store pickup, or ship it anywhere in the country.
