Re: Brushes with Greatness
Bob, I believe that the markets may have wanted Geithner as he was associated with the so-called "bad bank" solution. This was never all that realistic (of the market, not Geithner particularly), but I think they wanted to believe that bank capital could be made good without bank debtholders making much a contribution. If debt got through untouched, then the equity money being wagered on certain banks would probably yield big, big gains. I think it is less and less likely that equity will come through and even redeeming the debt at 100% seems likely to be too much for even future generations to be asked to lift. I didn't like the choice of Geithner, but his current caution and seemingly restricted view of what Treasury is really capable of doing are a little bit more appealing. Still, he is definitely a tax cheat. It is laughable to describe what he did as an honest mistake.