Bernie Sanders
Related: About this forumTim Geithner cashing in
http://www.usatoday.com/story/money/2016/02/09/ex-treasury-secretary-geithner-cashing-wall-street/80057762/<After an appropriate stint at a think tank to write his memoir and a quiet transition to Wall Street, President Obamas first Treasury secretary, who left office in 2013, is now ready to make millions thanks to help from a big bank he used to regulate.
Bloomberg News this week disclosed that Geithner has gotten a line of credit from JPMorgan Chase, the nations biggest bank, to invest in a new $12 billion fund at the private equity firm where he works, Warburg Pincus.
The filing with the New York Department of State does not give the amount of the line of credit or the terms, but according to Bloomberg, Warburg Pincus executives are signing up for a total $800 million and Geithner, as a top officer, is probably getting a sizable chunk of that.
The returns on the private equity investment are bound to be much higher than whatever interest Geithner will be paying on the loan, so he is virtually guaranteed to make many millions in profit on the deal.
Geithner of course was the Treasury secretary who pushed the bailout of the big banks, including JPMorgan, in the wake of the financial crisis, beating off anyone who wanted to discipline the banks or punish their executives with the argument that doing so would further destabilize the financial system.
His cosseting of the banks brought him into conflict with the chairman of the bailout oversight panel, Elizabeth Warren, the future senator from Massachusetts, and the inspector general for the program, Neil Barofsky, as well as one of the top bank regulators, then-FDIC chairman Sheila Bair all of whom have documented their clashes with Geithner in recent books.>
think
(11,641 posts)cilla4progress
(24,736 posts)when Obama first appointed Geithner...
Things were not going down as I expected.
BernieforPres2016
(3,017 posts)After a couple of years with Geithner appointed as Treasury Secretary, Elizabeth Warren blocked from heading the consumer financial protection agency she created, and no prosecutions of banksters, I knew it was business as usual and tuned out politics until the last few months when Bernie drew me back in.
SoapBox
(18,791 posts)Adsos Letter
(19,459 posts)We ain't in it.
BernieforPres2016
(3,017 posts)Last edited Sat Mar 5, 2016, 06:03 PM - Edit history (1)
Don't borrow money to make investments, because if the value of your investment goes down, the leverage can cause you to go bankrupt. But when you know you can:
a) borrow money at favorable rates and other favorable terms to invest in a partnership
b) have the partnership borrow money at favorable rates and other favorable terms to buy companies within in the partnership
c) go to your favorite representatives in government and write provisions into the tax codes and other laws to make the companies you invested in become more valuable
d) sell the companies you invested in and made more valuable via your political connections at a big profit
e) repeat the process over and over
Then you've used low cost leverage to amplify your returns from a rigged game.
Babel_17
(5,400 posts)I'm shocked at this betrayal of the standards expected of a former Treasury Secretary. Will I ever be able to trust again?