Sunday, the US Government told Rick Waggoner – the CEO of General Motors – that he no longer has a job. The government automobile rescue commission has declared that the viability plan is not workable.
Tim Geithner has declared that the problem with the economy is that he hasn’t done enough, not that he has done too much. At the same time, he is lashing out at banks for being unwilling to take on additional risk.
Markets in Asia responded by dropping over 4%. Futures suggest the same will happen here. If you didn’t already sell to take advantage of the recent upswing, you probably missed your chance.
Geithner is now trapped by the reality that the hedge funds are not going to fund his latest toxic solution plan since Congress did the 90% AIG tax thing to punish those working hard to unwind the company. Add to that the threat of “taking over” the same companies by decree of the Federal Reserve Board of Governors (which has no jurisdiction over anything except its members), and Geithner is in a real dilemma. If he makes nice with the hedge firms and seeks to protect them from populist retaliation for making big profits by rescuing the banking system – he could face the rath again of those who want his head on a platter. If he doesn’t shield them, they won’t voluntarily help.
No wonder nobody wants to work for him.