Byron York has been a Viking covering the Tim Geithner story and he has more information today that’s worthy of your consideration. Geithner still hasn’t provided any better explanation for his tax-dodging than “I dunno”. Despite that, the Republicans in his confiramtino hearing seem inclined to confirm him anyhow.
That would be a mistake. Geither isn’t ready to tackle the challenges of this economy. I offer as additional proof this little tidbit from an article York mentioned in his post:
All of the Geithners’ mortgages — from big banks including Nationsbanc, which is now Bank of America; Chase Manhattan, which is now J.P. Morgan Chase; and Wells Fargo — carried adjustable-rate mortgages with the risk that annual rate increases could raise their interest payments to as much as 11.25 percent, though the couple tended to refinance or sell their homes before ever they faced a rate adjustment.
As we know, ARMs were one of the major factors that contributed to the mortgage mess we’re still in. We also know that banks were pusing them, as well as sub-prime mortgages, on the general public even though they carried an inordinate amount of risk. Geither has been in finance for a long time and served as the head of the Fed in New York. It’s a lock that he took on at least a couple of these mortgages while he was establishing his financial genius cred.
I would say it’s appropriate for GOP Senators to question Geithner’s financial wisdom given that he’s only taken on the most risky mortgages. There’s no evidence that his ARMs got him into any financial trouble, but they may well have. I can imagine that the tens of thousands of dollars he kept in his pocket when he didn’t pay his taxes provided a pretty nice hedge against a rapidly-rising interest rate. Perhaps they could ask him if his risky ARMs would be included as part of the the drastically increased regulations he wants to put into place.
Tags: Economics, Timothy Geithner
