Geithner Swinging in Wind After Fed Drops AIG Ball

Bo Zhang accused of pilfering Treasury software

(NEWSER) - A Chinese computer programmer has been charged with stealing software code worth $9.5 million while working at the Federal Reserve Bank of New York. Prosecutors say Bo Zhang, a Chinese citizen who worked for a technology firm contracted to work on code at the New York Fed, copied a software system relating to the "tracking of the billions of dollars that are electronically transferred every day in the US’ general ledger" onto a hard drive, then copied those contents onto his home computer, Bloomberg reports. More»

Geithner, Bernanke, others missed signs of the pending collapse

(NEWSER) - The Fed released transcripts from meetings in 2006 today that reveal just how badly its top officials blew it on the looming housing crisis, the New York Times reports. The industry was showing signs of distress, but the Fed's attitude boiled down to, eh, no big deal. The officials clearly did not grasp how "deeply intertwined the housing sector and financial markets had become," writes Binyamin Appelbaum. They would get the picture soon enough. Some highlights:

• Timothy Geithner (then with the New York Fed): “We think the fundamentals of the expansion going forward still look good," he said in December 2006. A few months earlier: “We just don’t see troubling signs yet of collateral damage, and we are not expecting much."

New book says Obama's team routinely undermined him

(NEWSER) - In March 2009, in the throes of the financial crisis, Barack Obama told Tim Geithner to focus on a proposal to dissolve Citigroup—but the Treasury Secretary ignored him and never developed a plan, according to former Wall Street Journal reporter Ron Suskind’s new book Confidence Men. In the book, which was obtained early by the AP and the New York Times , Suskind writes that Obama’s “authority was being systematically undermined or hedged by his seasoned advisers.” More»

But today's the absolute last one—right?

(NEWSER) - Today is, supposedly, the absolute last day for debt limit legislation to be introduced in the House if the US wants to avoid defaulting on Aug. 2. As we wait to see if lawmakers make the deadline, Uri Friedman, writing in in the Atlantic Wire, looks at all the deadlines they've missed so far:

1. May 16: Timothy Geithner originally named this as the date the US would risk default, but when it passed without Congress raising the debt ceiling, the Treasury shuffled some clamshells to postpone the default date to Aug. 2—at which point "the borrowing authority of the United States will be exhausted."
2. June 31: On June 1, John Boehner said that a deal must be made in the next month in order to avoid "rattling investors."

It won't fall fast enough for him to look good in 2012

(NEWSER) - The Federal Reserve issued a dour new economic outlook yesterday, predicting that the unemployment rate, currently at 9.6%, will fall to only 9% by 2011 and 8% by late 2012. That's bad news for everyone, but especially for President Obama; Daily Intel notes that incumbents lost in four of the past five presidential elections in which unemployment was at more than 6%. More»