Wednesday, April 22, 2009

Geithner Says US Largely to Blame for Financial Crisis

Carlye Group co-founder presented Treasury Secretary Tim Geithner an award at the Economic Club of Washington. The Carlyle Group epitomizes the greed and leverage that took down Wall Street. It lost Carlyle Capital Corporation, Blue Wave Partners, SemGroup, Hawaiian Telecom, and Edscha to bankruptcy.

David Rubenstein believes the government will increasingly look to private equity underwriters (PEU's) for solutions. A quick glance at Carlyle's performance with Vought Aircraft Industries and LifeCare Hospitals will raise eyebrows.

So a big offender presented an award to "solution man" Geithner. Tim's smile indicates what? Are the big money boys still in charge? Have they found a new group to funnel money to their corporate and personal coffers? Tim's words slung open the door to such activity.

The IMF plans to distribute half of the $500 billion in general allocation via Stategic Drawing Rights to member countries. The U.S. will be able to use its share of the $250 billion SDR's to meet its foreign currency obligations. Some suggest SDR's are the new exchange currency. If the dollar fades, the U.S. wants to control the new system via the IMF and its sister organization, the World Bank.

President Obama sent a letter saying Congress to quickly approve America's $100 billion contribution, as it would be backed by IMF collateral, which includes gold deposits. Is this a backhanded way to a gold backed system, at least in part?

What about the IMF's $250 billion slated for loans? Will loans be extra-Congressional as well? Who decides who gets the billions? The unitary executive or the IMF?

The big money boys are moving fast and furious to set up a global currency backstop. It is a curious activity in light of all the green shoots. Rest assured, the greed and leverage boys are still in charge. Tim's award reiterates this sad fact.