Fat cat.Oh dang! Rumor has it that Tim Geithner, our Treasury Secretary-to-be, does not care for our beloved Sheila Bair and her maverick ways. Bair is the chairman of the FDIC and one of the few high-profile Bush administration appointees to very repeatedly and publicly bang the drum about how if our financial crisis is ultimately due to people’s mortgages going south, maybe we ought to work on fixing those bad mortgages. She’s a working class hero! So naturally, Giethner hates her guts.

The problem is that she isn’t a “team player” or a huge fan of Citigroup, and for this she must be banished forever from Washington:

Geithner became increasingly wary of Bair as she worked with the other regulatory agencies on emergency bailouts of banks in recent months. The New York fed chief has been concerned that Bair was more worried about keeping the FDIC’s insurance program protected than she was about the entire financial system, one person said.

Bair twice sparred with her colleagues at the Fed and Treasury over efforts involving Citigroup. In October, she acquiesced to Wachovia Corp.’s agreement to a takeover by Wells Fargo & Co. days after agreeing to back an initial deal with Citigroup. … Wells Fargo offered about $15 billion for Wachovia, compared with Citigroup’s $2.2 billion deal to acquire Wachovia’s banking operations, and didn’t need any FDIC aid.

Citigroup’s position weakened, with its shares losing as much as 65 percent after the failed Wachovia deal amid a collapse in investor confidence — precipitating another rescue attempt.

Again, Bair held out for concessions as the Fed and Treasury sought to shield Citigroup from losses in its holdings of toxic assets. Bair insisted on getting preferred shares for the FDIC in the New York-based bank. She also demanded that Citigroup agree to implement mortgage modifications according to a model developed by her agency.

(Ha ha, sorry for the long-ass quote, your editor is waiting for the Sudafed to kick in.)

Anyway, here is one interpretation of the story: Sheila Bair is the one regulator who has not been screaming bloody murder about how we must bail out all the fancy New York lenders who horribly mismanaged everything, preferring to focus instead on all the impoverished rubes who completely overleveraged themselves with stupid mortgages they couldn’t ever hope to pay off. This makes Bair unpopular among certain financial types. Also, Tim Geithner is maybe a dick.

Geithner May Seek to Push Bair Out After Clashes During Crisis [Bloomberg]

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  1. Can’t be surprised at this – and thinking Obama is a liberal’s champion should be dashed by (for lack of remembering a better article) this RS Taibbi report on contributions:

    Obama has received more contributions from Goldman Sachs than from any other employer — more than $627,000 at this writing — not to mention $398,021 from JP Morgan Chase, $353,922 from Lehman Brothers and $291,388 from Morgan Stanley… by now it should be clear what type of service Wall Street will demand. The financial disaster dumped on us by eight years of Bush’s mismanagement has left America with the prospect of short-term solutions in the form of massive government bailouts, and long-term solutions in the form of reform and regulation. A big chunk of the $1 billion in cash that will be spent on the presidential race this year represents Wall Street’s desire to make sure that both candidates can be counted on to make the short-term bailouts large and passionate, and the reforms gentle and halfhearted. “They want to make sure there’s socialism when they need it — bailouts — and capitalism when they need that,” says Pollin.

  2. Bair wanted people with deposits of less than $250,000 in banks she insured to not be harmed when the Fed and Treasury drove trucks full of money to the corner of Wall and Broad and handed stacks to cash to waiting plutocrats.

    Don’t want her on the team.

  3. In 2007, Bair told lawmakers the Fed should use its authority over home-loan standards to tighten oversight and crack down on the practices that contributed to the subprime mortgage mess.

    How is this woman a Republican? I thought the Great Keynesian Purge got rid of everyone who was in favor of bailing out the non-rich. If it costs $50 billion to refinance all the crappy mortgages in the country, and a bunch of overpaid executives have to suffer, I say give this woman a sling and a rock and I’ll have the popcorn made in about ten minutes (’cause I do it the old-fashioned way).

  4. Our favorite skateboarding hipster-wonk is financial giant toady? Say it ain’t so. What about all the 50-50 grinds and handplants? Did they mean nothing? At least we’re following the Iraq war plan where the people who were wrong form a firing squad to take out the people who were right. Which is easy because there are so much more of the wrong ones.

  5. In about six months the “team of rivals” is going to get dragged to an off-site, where a facilitator will make them all have to say things they like about each other and collectively solve jigsaw puzzles.

  6. It’s open season on “Mavericks”. This bitch better duck & cover.

    [re=190868]SayItWithWookies[/re]: I thought the only peeps still “poppin'” were the hobo tribes.

  7. damn, obama’s term hasn’t even started and we’re back to 90’s democrat soap operas?
    geither doesn’t like blair. hillary has hew own agenda. richardson backed obama at a crucial turning point and got shit from the clintons and yet she got the good gig. rendell thinks napolitano is a lesbian with no life.
    damn, i can’t wait for the first “suicide” in the park. i just hope to god this generation’s monica lewinsky is not going to be a white woman.

  8. [re=190885]Tyrone Biggums[/re]: Hobos and people with an aversion to that microwave popcorn smell. That shit ain’t right.

    Oh, and SKS, if Sudafed works for you, great — but that stuff has never done squat for me. Claritin-D — it’s the most important meal of the day.

  9. [re=190883]WadISay[/re]:
    Yeah, this administration is going to need a team of full time councilors, either that or a really good connection on mood altering pharmaceuticals. I favor the latter.
    Summit 12/20 ya. Whitelabs Yeast T-shirt.

  10. “In 2008 Forbes ranked her as the second most powerful woman in the world behind German chancellor Angela Merkel … Bair is a native of Kansas … Bair has published two books for children:Rock, Brock and the Savings Shock (2006) and Isabel’s Car Wash (2008). Both titles show children good examples of money management.”

  11. “pronounced /ˈgaɪtnər/] … His mother, Deborah Moore Geithner, is a pianist and piano teacher in Larchmont, New York … Geithner spent most of his childhood living outside the United States, including present-day Zimbabwe, India and Thailand … In his spare time he fly-fishes, plays tennis and surfs … Geithner worked for Kissinger and Associates in Washington, D.C., for three years … ”

  12. So can we start a movement to get bair nominated instead of tim? I always thought she would be a better person for the job. She is a republican who is arguing for a supply side solution to this mess and she has to fight popous dems who want to feed the banks and have it trickle down. The world is upside down.

  13. Keep your eyes on the real deal. This is one bigass bank robbery — sans shooting. Unless you count the people who shoot themselves when the sheriff comes to throw them out in the cold.


    This one is truly a ‘some will rob you with a fountain pen’ case.

    Does anyone think, really, that this mess DIDN’T originate with the bankers?

    I’m interested.

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