Sometimes I don’t have time to write a full blog about the topics I love so dearly. But sometimes doing a simple tweet will not cover enough of what I want to say either. So thankfully we have the mini rant.
Timothy Geithner Should Be Fired
When Obama first nominated Tim Geithner to be the Secretary of the Treasurery, I was pretty pumped. As the former head of the NY Fed, Geithner knows a thing or two about our financial system. As an Independent his political affiliations are non-binding to any specific interest group. The extra bonus was the Geithner’s career had taken him to other industries other than banking and Wall Street and so he has little “old ties” to the troubled sector. He seemed like the perfect contrast to every problem we had with Frankenberry Paulson. Sadly he was the perfect contrast. You see people lined up behind Paulson. He knew how to lead, he know how to talk, he knew how to act. Geither is a stark contrast to this. He is soft-spoken, not confident in front of the press, and very vague in his speech. When he started to approach his counterparts on the world stage with economic suggestions, they rejected him. To make matters worse, he fumbles through words. Not like George W Bush, say what you want about that guy but he was comfortable in front of the spotlight. The success of getting out of a recession requires the mindless masses have confidence in their leaders. I’m a cut to the chase kind of guy, but America is the land of sugar coating, and we need that in our leaders. Geithner may be a brilliant economist, but he should have stayed a brilliant economist.
No, We’re Not in a Depression
Richard Posner, a well known economist in the world of elite minds has a new book out where he claims to say we are in a depression. I’m sorry, did I say economist? I meant to say he’s a flipping LAWYER. Smart guy, but he’s no economist. His sole argument is based on the fact that we haven’t had a recession this bad since the Great Depression. True, but that doesn’t make it a depression. Simply because you’ve never seen a zit so big on your back doesn’t means it a cyst. It means it’s a big zit. Which is why we have word like good, bad, big and small, to enhance nouns. We are in a bad recession. Yes would could end up in a depression, but we aren’t in one yet. I realize this is merely an argument of semantics, but Posner is playing with a taboo term to garner press and sell books. Frankly I’m disappointed in the Freakonomics Blog for even covering this.
Citi is Still Waste Deep in $#!+
We all watched in amazement as the Dow bolted towards 7000 like an illegal immigrant just spotted by border patrol. It’s amazing how mesmerized the world was by the movement on Tuesday. I would bet money that global productivity was down 10% because the world was just watching the ticker all day. This surge in value was sparked by an announcement the Citi was profitable for the first two months of this quarter. At least that is what you heard. This “profit” is before they account for taxes and some various write-downs. Those write-downs aren’t some minor thing. Those write-downs are the reason they weren’t profitable to begin with. All those bad mortgages they own are destroying the bank’s profitability. You will likely see a loss in the first quarter once they account for those bad loans. Another contributor to the “profit” they’ve seen was the selling of pretty much half of their brokerage business, Smith Barney. They made a ton of money off of that sale, but that is a one time deal. True they will continue to get half of the revenue, but that one time sale isn’t exactly going to happen every month. If Citi somehow manages to squeeze out of profit, it will be meaningless accounting garbage. It says nothing about our economy. As for what this means for the Dow, I’ll just say “Meow.“
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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