Geithner: There Is No Plan B
Gresham Barrett (R-SC) asked Tim Geithner "the $64 trillion question"–basically, what is Plan B?
Geithner’s response? Don’t worry. It’ll work.
That wasn’t acceptable when President Bush had no Plan B in Iraq, and it’s not acceptable here.
In his response to Bill Posey, Bernanke did better. But the war images don’t give me a lot of confidence.
Heh. Bernanke actually referred to the fog of war (not in so many words, but that’s what he meant).
When that one stops working, I think the next cliché in line is “War is hell.”
I don’t know how any of this can be expected to work when traffic on CDSs, derivatives, mortgage-based securities, and related “insurance” contracts continues unabated. I think all that activity needs to be frozen until the mess can be cleaned up and proper regulations put into place. Otherwise, its like trying to play football while standing on a beachball. It just won’t work.
Bob in HI
This sounds like Senator Harkin’s opinion during the bailout hearings last fall
Bingo.
While it’s fair to point out that, depending on the nature of the problem being addressed & considering the various available options, not having a “Plan B”, or an “Exit Strategy” [or what have you] is tantamount to inflating the chosen strategy with a volatile gas, IMO its noteworthy that each of the two critters shown here pressing his respective cutlet against the fire was a Republican — & moreover having listened [up to the point that Geither-san left] & then having scrolled thru your [as usual, incomparable] live-blog, they were the only ones who tried.
Those two facts suggest to me that all the committee members were/are only too aware there IS a Plan B [or what have you] — except it’s letter-coded Plan N, & the goal in exposing it wasn’t sunlight, but rather a sound-bite to feed to Limbaugh, Hannity, Beck et al to overcome that, so far, the only folks on Capital Hill that have been raising it have been Republicans.
I keep coming back to why the pigheaded devotion on Geithner’s part to total non-transparency, and why only this one, increasingly perverse, course. Makes me start to wonder whether there isn’t some very good (from the banksters’ POV) reason not to re-examine the underlying loan data as per Galbreith et al. Are there perhaps something like ‘phantom mortgages’ mixed into the CDOs? By that I mean an income stream without an underlying house to collateralize it — for example, money laundering conduits? And re-examining the individual account/loan data would bring that to light? I dunno the answer, but this points up that the obstinate opacity is certainly breeding suspicion that undermines public confidence (if there ever was any, and assuming the USG believes such is actually necessary) in the programs.
There are two answers to your question. The banks are not interested in looking too closely at the paperwork because even they don’t want to know how insolvent they are and they don’t want anyone rooting around, realizing how much fraud there was in all that, and whistleblowing on them.
As for Geithner, one of the tenets of securitization is that you don’t need to know the fundamentals of a market to deal in the securities derived from it. The math is supposed to tell you what will happen regardless of whether you are dealing in oil, rice, or credit cards. This is of course insane but that was the theory and Geithner sure seems to buy into it.
This in part explains why Geithner has had so little interest to in addressing the housing crisis. It just isn’t important to him or his brand of economics.
by plan N, i take it you mean nationalization… i think that is plan b, but they are going to try hard to avoid plan b, which is nationalization, as it is the antithesis of everything crony capitalism stands for….
that was in reply to #4