Thursday, January 22, 2009

Financial Market Bobbleheads

Christopher Whalen, the managing director of a firm called Institutional Risk Analytics, is a ubiquitous commentator on financial markets. This is despite the fact that, from everything I've seen, he's totally crazy. Par for the course when it comes to financial market bobbleheads, I suppose. I expect financial market bobbleheads to exhibit a certain amount of craziness—after all, the shows they appear on are aimed at retail investors, and they're just trying to make headlines. But Whalen's claim that Tim Geithner is "too close to Goldman Sachs" is Ben Stein-level crazy. From an interview with Yahoo Finance:

"I believe Tim Geithner only represents part of Wall Street - Goldman Sachs," [Whalen] says, suggesting Goldman was the "primary beneficiary of the AIG bailout" and notes Goldman alum Stephen Friedman serves on the board of the NY Fed.
When the interviewer stated, "effectively, your argument is that Tim Geithner is in bed with Goldman Sachs," Whalen responded, "I believe so." Nevermind that Geithner has never worked for Goldman, or any Wall Street institution for that matter. No evidence required. This is Yahoo Finance. The only thing resembling evidence Whalen cites (other than a rumor about Geithner spending time on the phone with Robert Rubin that Whalen actually started himself) is "the reporting in the New York Times about the AIG bailout," by which he means the preposterous—and thoroughly discreditedarticle by Gretchen Morgenson. Morgenson effectively asserted that the Fed's decision to bail out AIG was improperly influenced by Goldman, which is idiotic for a number of reasons, but especially because the Fed hired Morgan Stanley to advise them on the AIG bailout. No mention of this in the Times article, of course, because we can't let pesky facts get in the way of a good Goldman conspiracy theory. What is it about Goldman Sachs that drives the Ben Steins and Chris Whalens of the world so crazy? Honestly, I've never understood it.

6 comments:

s said...

Geithner: Who is Tim Geithner? What has he done? When rumors of his appointment were floated I waited for his credentials. Most all that people say he was involved in while at the NY Fed is denied. Fine, but what did he do? His contributions -- forget about taxes and rumors -- not a soul has referred to something the man accomplished. One cannot help but see him as the water boy.

And what a bit of buffoonery at the start: Tells China to manipulate their currency on one day and tells Japan not to manipulate their currency on the next. In god's name who is he speaking to?

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