Geithner to NPR: Don't Worry Regulators Have Been Watching This Toxic Stuff...Just Not Very "Carefully" or "Realistically"

I can't believe the entire financial system is being run by this dude Timothy Geithner.

Don't these almost back-to-back completely contradictory statements that he gave NPR last night absolutely underscore why the worthless bureaucrats at the Treasury and the crony regulators that pay them off will NEVER EVER fix the system UNTIL THEY GET OUT OF IT?

NPR: Now, I would think a fair number of citizens could say, wait a second, we're — depending on when you start the clock, you know — two years or one year or six months into this horrible crisis and you're telling me that the government doesn't have a strong, forward-looking, hard-headed assessment of the health of the banking system?

Demi-god Geithner: Well, I think that, again, we want to make sure that it's done more consistently and more realistically across banks and across the supervisors. So this is part of what banks do and what supervisors do. But, frankly, it needs to be done more carefully and with a more forward-looking, realistic approach.

NPR: I want to switch a little to these toxic assets. I mean, we at NPR and journalists around the world and certainly people in the regulatory world have looked at a lot of these toxic assets ... these CDOs and CDO-squareds. And I'm just curious, have you spent or does your staff have a sense -– I mean, we're talking about the overall banks' capital structure and the overall banks' ability to withstand shocks? But have you spent time looking at these toxic assets? Do you have staff sort of tracking down the mortgages that underlie some of the other more exotic asset-backed securities that underlie some of them?

Almost-Omnipotent Geithner: Well, the supervisors of the country -– you know, we have a complex network of bank supervisors, banking authorities, financial agencies -– they have examiners in these institutions examining the financial strength of these firms. And as part of that, of course, one of the central jobs they have is to look at the risk in a whole range of different loans and assets these guys have, not just those related to real estate that you are referring to, but everything else, too.

And that job is to try to make sure that, again, people are making appropriate judgments about what the risk in those assets are.

So, he wants to rest assured that "the supervisors of the country -– you know, we have a complex network of bank supervisors, banking authorities, financial agencies -– they have examiners in these institutions examining the financial strength of these firms" even though, "we want to make sure that it's done more consistently and more realistically across banks and across the supervisors. So this is part of what banks do and what supervisors do. But, frankly, it needs to be done more carefully and with a more forward-looking, realistic approach."

So the new stress tests full of old data and a few new assumptions by this nearly-all-knowing dude running the Treasury are going to give us all the information we needed to know about all those products and markets and derivatives and other asset classes and moving parts in the financial system even though we don't need any of that because we've had regulators making sure this stuff isn't junk anyway except that the regulators weren't doing their jobs "carefully enough" or "realistically" enough.

I hate having to continually harp on this stuff -- I mean, Treasury bureaucrats have always doubled-talked crony regulations.  But Treasury didn't use to have a blank check to write to these cronies like Geithner does now.

Even if we assume he's not corrupt...we can certainly once again ascertain just how nonsensical his statements and policies are.

And nonsensical policies that impact trillions of dollars of what used to be mostly private, profit-seeking markets are very destructive, no?

I yearn only for rule of contract law.