Is Geithner right that the recession is receding?
Remember Tim Geithner? He's that deer-in-the-headlights fellow in charge of the Treasury Department, who now claims that the recession is receding. His audience for this piece of content-free cheer-leading are our good friends in Saudi Arabia who grant us their oil and terrorists in exchange for our dollars. And the Saudis need reassuring because they are investing their oil profits in dollar-denominated assets that keep tumbling in value.
And why shouldn't they tumble? The U.S. has thrown in $12.8 trillion to rescue the global banking system from its risk-seeking greed-heads. And our $787 billion stimulus plan has officially saved or created 21,000 jobs -- a spit glob in the ocean of the 6.5 million jobs lost since the recession began. All that added debt just makes the dollar look more wobbly.
And that government debt doesn't even take into account the efforts of traders at firms like Goldman Sachs Group (GS), who will pay themselves near-record bonuses this year by profiting from trades like shorting the dollar and buying oil -- even as they use billions in low-cost government loans to feed their profit machine. Does Goldman hate America or is Geithner just fronting for Goldman to placate the Saudis?
Unfortunately, it is hard to find any evidence in Geithner's speech that the recession really is receding. And with the latest concerns about the economic impact of a possible bankruptcy of CIT Group (CIT), it is clear that hundreds of thousands of businesses in the U.S. could face a cut off of short-term financing unless the U.S. steps in.
So the argument that somehow things are getting worse at a slower rate is beginning to look a bit hollow. The question is whether the Treasury Secretary can restore confidence by making hollow pronouncements at odds with reality or whether people are smarter than that -- and will draw confidence from candor, evidence, and measurable, sustainable improvement.
If Geithner believes in the latter, he is not showing it.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
Reader Comments (Page 1 of 3)
7-14-2009 @ 10:19AM
Jerry said...
What would you expect him to say. ? He and his Goldman Sach's mafia are running the government. They were to blame for the mess we're in and now they're running the government into the ground.
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7-14-2009 @ 2:54PM
JP said...
Why do they have to lie to China? They know the U.S. can't go no further than down. They are just trying to buy time. The big corp's in this country can't even keep their businesses afloat, let alone know how to run them. This country invested money it didn't have in failing businesses. How stupid is that? Unless this country can come up with a way to create 6 million jobs and sell all the foreclosed homes at their mortgage value or higher, it is in deep chit. This country is like a boat with a hole in it, they keep drilling more holes hoping that the water will drain out. Next step martial law. *** http://new-world-order.itrustgodonly.com/list.php?q=martial+law&Submit=GO
7-14-2009 @ 3:51PM
wyler said...
Bush is responsible after 8 years of incompetence. The new administration is cleaning up the mess inherited by elected officials that you voted for.
7-14-2009 @ 10:26AM
bailoutsos said...
The recovery is only happening in his head.
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7-14-2009 @ 10:31AM
David said...
Geithner hasn't been right about anything since he took office except to make sure Goldman Sachs reaps a windfall from every move he makes.
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7-14-2009 @ 10:41AM
Tom Whitworth said...
AMEN!!!!!!!!!!!!!
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7-14-2009 @ 10:43AM
sixkillerforhire said...
tax cheat
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7-14-2009 @ 10:52AM
stealma said...
Sure that's what they want us to believe. everyone enjoying change? its getting worse 500 thousand new claims for unemployment last week. he calls this better this administration is showing anything but transparency.
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7-14-2009 @ 11:07AM
dan said...
As long as we keep exporting dollars to China and Saudia Arabia there will be no recovery, dear Wal-Mart shoppers.
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7-14-2009 @ 11:12AM
reallyanewday said...
Boy, things sure aren't in recovery yet in my household. Or even my state! The only things I'm seeing increase are unemployment and food prices! No recovery reported here!
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7-14-2009 @ 11:18AM
Paul said...
Prices are falling on a lot of products, we are in deflaction that will continue for several years, money will go a lot further in our cost of living, cheaper home prices, food, clothing etc., the economy was inflated by a lot of companies expanding beyond their limitations, we will change our way of living and be more carefull on where we invest our money.................
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7-14-2009 @ 11:39AM
dave said...
Smoking a little too much dope there my freind
7-14-2009 @ 12:19PM
Sarah said...
I was always careful with money. When I drove a fancier car it attracted men, so men are lured in by money, a woman has more of a natural reason to be. I guess more physically attractive men think they should be receiving money for their looks. Now, I made sure my car is more middle of the road and hope to snag someone with a brain some day.
7-14-2009 @ 11:47AM
rip300rog said...
Geithner can't even sell his own house becasue he is underwater on it. He is a tax cheat and an egg head with very little real world experience. Who put this clown in charge of Treasury...., oh, yes, our very own president with no real world experience either.
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7-14-2009 @ 11:48AM
Donovan said...
I for one don't put an ounce of truth in a single word that comes out of Geithners mouth. This guy has the ability to make these idiots in Washington believe him, by manipulating words until he can put some BS sentence together they want to hear, and finally accept. Geithner couldn't give a straight forward to the point, factual honest answer, if his life depended on it.
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7-14-2009 @ 12:09PM
Sarah said...
More frightening then the de-regulation of banking practices, designed to protect those who want to buy homes and keeping costs down to only one qualifying income, is that so many people went along with it, expected it, demanded it, thinking they were going to GET.
It shows you that so many people unfortunately are not good for extending credit to, that they can't handle it and are irresponsible and overindulgent with themselves; as if it isn't their money to repay, they overspend it like it's some gift from someone else.
More frightening is the people who said YES to it all. They were so insistant about it, everyone from any age group all the way up to the elderly claiming "that's just the way it is"..yes...that's just the way it is that they lost their homes, their investments and their jobs! Oh, but no they are STILL in the majority making excuses for themselves; sickening.
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7-14-2009 @ 12:13PM
Sarah said...
Would you trust these people with your money? I wouldn't. With the way they spend, an inheritance to them for example would be dust quickly over things you wouldn't buy for yourself, and is if they treat YOU like that.
7-14-2009 @ 2:33PM
Paul said...
Sara, the elderly did not cause this mess, most of them only have their Social Security, if lucky have a home paid for too!, they know what a depression looks like, we live in a dream world, wnat a lot of something for nothing, never judge a book by it's cover Sara, you will lose all the time, it is easy to condemn, what is your solution ?
7-14-2009 @ 12:20PM
Mike said...
Build more prisons. We're going to need them for the crooks in D.C. Remember this when you pull the handle at the ballot box. The upcoming STAGED recovery (about the same time as the mid-term elections) is a TOTAL JOKE.
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7-14-2009 @ 12:29PM
Pierre Pelham said...
That an American company, Goldman Sachs, profits in these times by "shorting the dollar" is disgusting.
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