Stress Test

Stress Test New York Times Bestseller Washington Post Bestseller Los Angeles Times Bestseller Stress Test Is The Story Of Tim Geithner S Education In Financial Crises As President Of The Federal Reserve Bank Of New York And Then As President Barack Obama S Secretary Of The Treasury, Timothy F Geithner Helped The United States Navigate The Worst Financial Crisis Since The Great Depression, From Boom To Bust To Rescue To Recovery In A Candid, Riveting, And Historically Illuminating Memoir, He Takes Readers Behind The Scenes Of The Crisis, Explaining The Hard Choices And Politically Unpalatable Decisions He Made To Repair A Broken Financial System And Prevent The Collapse Of The Main Street Economy This Is The Inside Story Of How A Small Group Of Policy Makers In A Thick Fog Of Uncertainty, With Unimaginably High Stakes Helped Avoid A Second Depression But Lost The American People Doing It Stress Test Is Also A Valuable Guide To How Governments Can Better Manage Financial Crises, Because This One Won T Be The Last Stress Test Reveals A Side Of Secretary Geithner The Public Has Never Seen, Starting With His Childhood As An American Abroad He Recounts His Early Days As A Young Treasury Official Helping To Fight The International Financial Crises Of The S, Then Describes What He Saw, What He Did, And What He Missed At The New York Fed Before The Wall Street Boom Went Bust He Takes Readers Inside The Room As The Crisis Began, Intensified, And Burned Out Of Control, Discussing The Most Controversial Episodes Of His Tenures At The New York Fed And The Treasury, Including The Rescue Of Bear Stearns The Harrowing Weekend When Lehman Brothers Failed The Searing Crucible Of The AIG Rescue As Well As The Furor Over The Firm S Lavish Bonuses The Battles Inside The Obama Administration Over His Widely Criticized But Ultimately Successful Plan To End The Crisis And The Bracing Fight For The Most Sweeping Financial Reforms In Than Seventy Years Secretary Geithner Also Describes The Aftershocks Of The Crisis, Including The Administration S Efforts To Address High Unemployment, A Series Of Brutal Political Battles Over Deficits And Debt, And The Drama Over Europe S Repeated Flirtations With The Economic Abyss Secretary Geithner Is Not A Politician, But He Has Things To Say About Politics The Silliness, The Nastiness, The Toll It Took On His Family But In The End, Stress Test Is A Hopeful Story About Public Service In This Revealing Memoir, Tim Geithner Explains How America Withstood The Ultimate Stress Test Of Its Political And Financial Systems From The Hardcover Edition

Timothy F Geithner was the seventy fifth secretary of the U.S Department of the Treasury and previously served as president and chief executive officer of the Federal Reserve Bank of New York He wrote Stress Test Reflections on Financial Crises as a distinguished fellow at the Council on Foreign Relations.

[EPUB] ✼ Stress Test  By Timothy F. Geithner –
  • Kindle Edition
  • 592 pages
  • Stress Test
  • Timothy F. Geithner
  • English
  • 08 June 2018

10 thoughts on “Stress Test

  1. says:

    Every financial crisis is a crisis of confidence. Tim Geithner You could take the CEO of Goldman Sachs Lloyd Blankfein into a dark alley and slit his throat, and it would satisfy them for about two days Then the blood lust would rise again. Former President Bill Clinton, to the authorTimothy Geithner has the unusual habit of showing up in the middle of international crises His time as head of the New York Federal Reserve and as the Secretary of the Treasury had placed him at the center of the worst economic crisis the world has seen in the past century Before that, however, he had spent time as a junior official in the midst of other economic crashes the Mexican peso crisis in 1994, the East Asian financial crisis in 1997, and the Russian default of 1998 He refers to the appropriate literature Kindleberger and Minsky on crises, but it is also apparent that he has seen this sort of thing before His leadership style was also one of pragmatism, quantitative policy analysis, and a certain blindness to political maneuvering Though he had spent much time in the public service, the first speech he ever gave was as Secretary of the Treasury That performance was so awkward that the news declared that the recovery was all but doomed So some seven years out from the start of the crisis, is it still too early to tell its final effects During his tenure, Geithner somehow antagonized the political left by being too inactive, the right by being too interventionist, and foreign creditors by embodying too much instability When he spoke to a Chinese audience claiming that their investments in America were safe, the response was derisive laughter But now the results are out The United States has experienced a genuine, if highly uneven, recovery Unemployment is down to 6.1%, the lowest since 2008, GDP growth is up to 2.8%, and inflation has remained steady at 2.1% Not ideal numbers, but they re a lot better than those of the Great Depression, or even of other industrialized countries struggling through the crisis Update This was in Q2 2014 As of the end of Q4 2014, the current estimate is of 3.9% growth, and unemployment is down to 5.6% As for the general causes of the crisis, Geithner takes a cosmic view, reflecting on the problems of manias in human behavior and the belief that everything would be fine and that no other crises would ever happen again It s derivatives in the 21st century, Dutch tulip bulbs in the 17th Although he treats crises with an almost fatalistic view, he takes a direct line towards intervention He describes the behavior of panics with the example from It s a Wonderful Life a lack of confidence in banks and other institutions leads to shareholders panicking and removing all of their investment Due to the nature of banks, they cannot necessarily survive these bank runs, and if they collapse, the lines of credit are cut off Now the Roosevelt administration did institute deposit insurance under the FDIC program to protect consumers after the Great Depression The problem is that many of these savings were held in shadow banks , or other institutions which functioned like banks but did not have the protections of the federal government The stress test of the title was one of his inventions, and a major factor in restoring confidence to the banks This involved running a detailed study of a bank s assets and liabilities, and seeing whether it could survive a major bank run or crisis using a series of simulated variables Although many suspected the truth of these tests, most seem to have worked, and the stress test is now a useful tool for evaluating banks in crisis worldwide This is the reasoning he gives for not allowing the big investment banks to fail He believes they honestly were too big to fail if they did, credit could collapse and so would investment holdings and consumer confidence worldwide As such, he also vehemently denies the idea of Old Testament vengeance to punish any of the head officials of the banks, saying that most were too ignorant of their circumstances and the complexity of the market to know what was going on Many will contest this, of course Although he does at least have the decency to mark a late protest against overeager executive compensation and its own risk for moral hazard he even names names Being at the center of a storm this large is an exceedingly thankless job He does talk about the lack of privacy accorded to his family, and the toll it took on his family life He wanted to resign as early as 2010, but the president would have none of it.As for the relative anemia of the rest of the recovery like stagnant wage growth, he bemoans the climate of fiscal austerity and political grandstanding which prevents any real action by the federal government The same applies to the Europeans, whose wrangling over their common currency has led to further economic slowdown Both the British and German growth rates are now below 1%, and in France it is at 0% For others in the EU, it s worse On his own role in the crisis, Geithner moves between quiet confidence this is what had to be done versus a subdued apology for not having done His evaluation is the Great Recession was at least not the Great Depression A low bar, to be sure, but one that we thankfully passed Barring any new revelations, I would agree with Geithner s conclusion this could have been a hell of a lot worse Still, there is the unanswerable question of the moral hazards of the financial system and how long it will be before another panic starts up and nobody recognizes the pattern The fire is out, but the homeowner still smokes in bed.

  2. says:

    Unelected Secretary of the Treasury Timothy Geithner had influence on the thoughts and motivations, successes and failures of ordinary Americans than Congress ever did in the years he was in office While Congress played politics and not very well at that , Geithner did a lot some might say too much with his global role as fire extinguisher And who was he Those of us just watching his pronouncements and public speeches, or feeling the impact of his decisions really did not have a good picture of the man orchestrating the mayhem Stress Test goes some way to explaining how he moved from President of the Federal Reserve Bank of New York when the monetary crisis began to become U.S Secretary of the Treasury in 2009, and what he was thinking as the crisis unfolded It is not a book written for Wall Street insiders It is written with the general American public, Europe, and other countries in mind It is, in some sense, a White Paper on the crisis, telling of personalities, events, and lessons learned It is well worth the time invested to read or listen to it.Two thoughts competed for precedence as I listened to Geithner narrate the Random House audiobook production of his book One was that he really is just an ordinary man in extraordinary circumstances He didn t have a background in finance he studied international affairs at Johns Hopkins He never worked in the finance industry before getting a government job at Treasury in the International Affairs Division in the 1980 s There he met Rubin and Summers, and was named Under Secretary of the Treasury for International Affairs in 1998.The second thought that rivaled the ordinary guy theory was that he does has an extraordinary calm and one or two steps at a time pragmatist mentality, a willingness to go all in, and a lack of interest in the trappings of wealth creation I remember coming away from Robert Gates memoir thinking that only those that don t want the fame and fortune that comes with vaunted public service must be the ones chosen to serve Remember Sam Nunn He did his duty, oh so well, but he appeared to hate the limelight And Geithner must be an impressive thinker and proponent of his thinking in person and in writing, despite or perhaps because of, his measured and sometimes turgid prose He consistently had strong supporters and powerful mentors all along his path That doesn t happen to everyone Something we may not value enough is his ability to withstand withering abuse from those who disagreed with him While there may be, and undoubtedly will be, many who could do his job, not many could handle a crisis of that magnitude while listening, adjusting, and holding firm when necessary It was a labor of love, doing that job at that time It occurred to me that some who recommended him for the job wanted someone else to handle the crisis to be a fall guy Somehow I remain convinced that disagreeing with his handling of the crisis injecting cash, propping up illiquid banks, and overseeing TARP needn t have boiled over into personal attacks It would have been far useful to him and to all of us if those with reasonable alternative ideas could have presented them in a civil manner The market scare showed us unfit and fat, at our ugliest Nothing would have made me happier than to see the banks fail, if it weren t that we were all involved Geithner s method, though he freely admits it created moral hazard along the way, did bring us back with limited pain and loss, to a market higher than ever in a remarkably short period of time If anything, this may be the thing that worries me the most One could argue now that the cash injected into the system allowed us to paper over some of the inequity issues we face, despite changes made to the regulatory system That someone makes an outsized salary can be remedied by tax reform, but the politics have become even contentious and disabling What worries me is that there weren t enough lessons learned by the folks who needed to learn them Histories of the financial meltdown in 2007 2008 we have heard before, but what we learn from Geithner s personal history is how the crisis looked from his desk, what he was thinking, who he was talking to, and how, as the crises widened, his perceptions changed or crystallized This type of meltdown crisis will probably happen again, especially if our political system continues to fail We may not use the methods Geithner used to repair the damage in the future, but everything he did will be considered in the next crisis, combed over and debated, regardless of political affiliation and ideology This is because pragmatism really does trump ideology in a crisis, no matter what the pundits and politicians say We wouldn t want it any other way.

  3. says:

    High Marks for Firefighting Low Marks for Fire PreventionThus far, I ve managed to read about ninety percent of Secretary Geithner s new book, Stress Test At nearly six hundred pages, this tome is a first hand account of the 2007 financial crisis that nearly upended the US financial system, forced millions of American homeowners into foreclosure and resulted in millions of lost jobs.I think Secretary Geithner s book reflects humility and balance in that he acknowledges the mistakes that he and other senior government finance and economics officials made during the crisis US Treasury, Federal Reserve Bank of NY and Board of Governors Federal Reserve System I feel that Secretary Geithner, Secretary Paulson and Governor Bernanke and their staff deserve high marks for their tireless efforts and skill in working to contain the catastrophic situation that materialized once the sub prime lending market and related securities began to collapse but I m also feeling that there s a lot to be done with regards to preventing these sorts of financial meltdowns in the future.Secretary Geithner pointed out in his book that Governor Volcker believes that the last useful innovation to come from the banking and financial services industry was the ATM He has also pointed out that Warren Buffett believes that derivative securities are financial weapons of mass destruction Yet, we see no effort by the US Congress or banking and financial services regulatory agencies to do anything to restrict such highly unpredictable, insidious and destructive instruments from the marketplace.I believe we need a coordinated effort across the G20 to disallow these variants of Russian Roulette rather than trying to manage them Mike Tyson had said that all boxers have a strategy until they get punched in the face After that, everything changes We have to acknowledge that derivative securities are far too dangerous, unpredictable and unmanageable unfortunately, Secretary Geithner seems unwilling to concede on this issue.

  4. says:

    Tim Geithner is one of few very few Beltway insiders I have ever followed on Youtube He s an awkward but strangely captivating public speaker, a humble but competent bureaucrat who rises above the political theater of Washington to deliver pragmatic solutions to our economic woes, most often in an exasperated monotone He s very down to earth, an easy guy to like.His book does not disappoint throughout the text, Geithner candidly admits what his weaknesses are, fairly assesses the successes and failures of America s response to the financial crisis conducted under his watch , and comprehensively describes the powers and limitations of the Fed, Treasury, and other regulatory bodies Geithner, nominally a Democrat, avoids ideological pandering and derives his insights from experience and personal observations over the course of a 20 year career in public service.To Geithner, financial crises are caused when borrowing or leverage outpaces economic growth and capital moves to unregulated markets They are resolved when swift, overwhelming capital injections sufficiently restore the health of the financial system, allowing insolvent banks to fail in isolation of those that are merely illiquid and salvageable The key is to restore confidence in markets by demonstrating a serious resolve to repair them despite moral hazard concerns and assured political fallout because, ultimately, the alternative is worse The opposite solution, austerity, is demonstrated by Europe s sluggish recovery and skyrocketing unemployment rates Admittedly, much of the subject matter is pretty abstract, but there are interesting portrayals of famous figures and illuminating critiques of the political games played on Capitol Hill Overall, a compelling read My only reservation is Geithner s weak response to the AIG bonus scandal it was totally preventable, raised valid moral hazard concerns and was obviously a public relations nightmare It would have been a quick, easy, and relatively inexpensive fix if Geithner had not confused talent with egregious mismanagement.

  5. says:

    I have read several books recently on the financial crisis we are just coming out of I read On the Brink by Hank Paulson the former Secretary of Treasury, House of Debt by Alif Mian and Amin Safi, economist, describes the large amount of empirical research done since 2008 Now I have read Stress Test by Timothy F Geithner whose book unlike the prior books provides an insider s view point of the crisis I am sure that this will be a controversial book and people will take sides according to their personal belief and only a few people will read it for the facts without pre judgment Geithner served as President of the New York Federal Reserve from 2003 to 2008 and Secretary of Treasury from 2009 to 2013 Geithner starts the book with his childhood growing up in various countries as his father worked for the Ford Foundation He says he learned to speak Hindi, Japanese and Chinese Geithner describes his education at Dartmouth University and his graduate studies at the Graduate School of International Studies at John Hopkins He tells about his personal life meeting his wife getting married having children But he spends most of the book on his employment at the Treasury He tells about his work in the International department working on helping countries with their financial crisis such as Mexico, Japan, Indonesia and South Korea He says the lessons he learned helped him deal with the current worldwide financial crisis Geithner goes into great detail about how the crisis development and people were caught off guard as people were complacent because of our long time of stability in the markets He implies that greed and lack of proper inspections lead to some of the problems He explains what was wrong, and how they attempted to fix or relief some stress on the markets He goes into depth about the stress test they designed for the banks to avoid future problems Geithner explains what attempts were made at legislation to prevent future problems along with what is good, adequate or poor and what is missing and needs to be corrected The description of our dysfunctional government comes through crystal clear He mentions Elizabeth Warren as she worked under him as temporary head of the new consumer bureau I noted Warren was interested in how the crisis was affecting the individual and Geithner was interested in the institutions and countries One of the biggest problems during the crisis was Geithner s inability to communicate adequately He has done an excellent job with this book so I wished he would have written his explanations and had someone read them maybe that would have gave us the confidence that comes with understanding It is obvious from the book the man did his best in an extremely difficult situation.

  6. says:

    This is an important memoir by one of the most consequential cabinet officers of the first four years of Obama presidency Geithner s main theme is the necessity of protecting the financial system in a full blown financial crisis forces policy makers to take counter intuitive measures, such as government borrowing to shore up institutions whose reckless lending contributed to the crisis This is a thought provoking, meaty memoir, certain to have a major impact on early historical accounts of the Obama years.

  7. says:

    Highly recommend this to realize that getting things done in Washington is not as easy as you think, even when the financial world was on the verge of crumbling and the Great Depression seemed eminent Checks and balances, political pressures and public ignorance all contribute to the difficulty The book sometimes sound like a boosting of the Obama side but overall informative.

  8. says:

    This was the heavy one of the trip it took three days Geithner has always been a cipher to me so I figured his autobiography and memoir on the financial crisis would help me understand him better He did an amazing job with this book, both explaining what happened while explaining himself The depth of his own introspection and understanding of his own being came through in the midst of incredible pressure and crisis Once you realize he s a deep introvert in a context that begs for extrovert energy, a lot of the puzzle pieces about him slide into place After reading this book, I m glad he was at the head of the NY Fed and the Treasury for the past decade Regardless of your position on what went down during this time, this is a book worth reading for a clear perspective from Geithner s point of view.

  9. says:

    If you ve read the books and academic articles or even watched the movies about the financial crisis, you ve mostly heard a unified and compelling narrative On the cynical end, Geithner, Paulson, and Bernanke were Wall Street cronies in bed with the largest banks, the vampire squids like Goldman Sachs, and they used taxpayer money to bail them out The generous and nuanced view is that they made unprecedented moves to bail out TBTF banks because the big banks had too much power and sway over them Geithner s cleverly named Stress Test is the Treasury Secretary s attempt to convince us that everything we believed was wrong You can feel the struggle of Geithner trying to pull at the dominant narrative by watching the painful and uncharacteristically not funny 45 minute interview with Jon Stewart Geithner sat at the very center of the storm from beginning to end First as head of the New York Federal Reserve, the regulator most entwined with the Wall Street firms, he oversaw the early rumblings of crisis as well as the rescue of Bear Stearns and the failure of Lehman Brothers Then, as Treasury Secretary, he oversaw TARP, the auto bailout, Dodd Frank and every other aspect of the financial rescue Geithner knows what we think happened and he addresses each of our facts with other facts, each opinion with an insider s take and each objection with a reality check He did not want to bail out banks for the bank s sake He expresses disdain for their excess, stupidity, and herd behavior He wants us to know that his team bailed them out to save the economy and the public from their collapse The fear that drove him was not Wall Street failure, but America s demise He and his team were convinced that there would have been shantytowns again if they mishandled the crisis And once the war was started, it was necessary to use overwhelming force Geithner is not an arrogant hot head as all the public accounts seem to indicate See books by Neil Barofsky, Sheila Bair, and even Warren He comes off as humble and down to earth His greatest flaw, and it s a big one given his position, is that he lacks the gravitas and clarity to speak to the public and instill confidence His signature is on all of our paper money and he sits at the center of a monetary system that is based purely on public trust He readily admits that that is the one thing he sucked at He says the night before he started as Chairman of the New York Fed, he was carded when he tried to buy a beer He is so aware of his failures in this arena that he runs through a list of media criticisms of some of his biggest public speaking flops, like the speech he gave about TARP that set off a stock market sell off a speech that the Wall Street Journal commentator described as Shock and uh He repeats these quips and to marinate us in his shortcomings, which he also did with the President before he appointed him as Treasury Secretary Geithner describes himself as an ordinary guy with average grades and average ambitions or none, really He goes to work for the government because he didn t have a clear sense of what he was good at, didn t want to go to Wall Street, and because that s what his dad did Unlike almost every other memoir or autobiography, Geithner doesn t offer any past narratives colored by the present he didn t for example, realize he was good with money by running a lemonade stand and he didn t learn how to deal with crisis because of his childhood spent living abroad His narrative is an honest, just the facts story without much self reflection or moralizing.Geitner s basic message is that he and his team were first responders in a financial collapse and their goal and major achievement was to prevent the U.S financial system to go over a cliff His book demands that we measure their success by that metric They saved us from collapse and earned a profit to boot What s everyone whining about He calls some of his critics populists, moral hazard fundamentalists, and those who wanted Old Testament Justice Geithner had no time for such grandstanding and rhetoric He keeps repeating plan beats no plan He had a fire to put out and he was singularly focused on putting it out His mantra was no Lehmans According to Geithner, his failure to bail out Lehman, due in part to the Brits dropping the ball and not having enough authority, was the avoidable problem that set off an irrational panic In this account, it s hard to argue that Geithner was nothing short of heroic or as Michael Lewis says, unusually brave He steered a sinking ship to safety by putting his head down and working tirelessly despite relentless criticism and mockery from all sides.But if Geithner is the hero in this story and the bailouts were the only thing between us and another Great Depression, then why is it still so hard to feel grateful Part of it is that many people are still suffering But the other part is that any story in which the protagonist saves us all from disaster by giving cash to big banks is not a story that can easily put us at ease.Geithner is invested in writing the history of the crisis from his perspective and he is honest and thorough as he does it, but maybe what he views as noisy naysayers and fundamentalists weren t just obstructionists who didn t appreciate the gravity of the situation Maybe they just wanted to play a different game.Elizabeth Warren s A Fighting Chance is an account from one of those populists demanding Old Testament Justice No perp walks No mass indictments Where were the armies of auditors, seizing hard drives and poring over the financial statements Although Warren s book reads much like a campaign book it s basically Dreams of My Father and Audacity of Hope rolled into one short on details and heavy on grandkids, dogs and peach cobbler If Geithner s repeated mantra is No Lehman s and haircuts are always a bad idea, Warren s is the game is rigged Geithner played by the rules of the game to achieve the goals of that game and he did a great, even heroic job And Warren wants to change the rules of the game so that winning has nothing to do with bank profits She refers to Geithner in her book as someone who always had her back, but whose main interest was to foam the runway for banks make the crash landing as painless as possible and return them to profitability as quickly as possible And this is where Geithner s background does prove something Geithner was not a Goldman executive as everyone thought He makes this clear over and over again He was not a Wall Street guy But he was an umpire in that game It s possible he spent so long marinating in the rules of that game, that he couldn t see anything past the stadium Warren talks about a Time magazine cover in which she, Sheila Bair FDIC , and Mary Schapiro SEC are labeled The New Sheriffs of Wall Street Why were the Sheriff s of Wall Street all women, she muses, when the majority of Wall Street all men Because they weren t invited into the stadium they were outsiders I had never inhabited the world of high finance, never played golf with a foursome of CEOs, never smoked cigars at the club Some people argue that if you are never in the club, you can t understand it The financial system and the crisis are so complex that few people inside or out understand it and Geithner defends himself against the attacks by saying that people just didn t understand the complexity or the stakes He is critical of both Sheila Bair and Brooksley Born former CFTC chairman who proposed that derivatives should be regulated when no one else saw them as a threat Geithner s condescending analysis is that Sheila just didn t understand the problem they were dealing with and Born s proposal for regulating OTC derivatives was noble, but she lacked a concrete and plausible plan Warren, he says, didn t have a workable plan that was better than his and plan beats no plan In a democracy, dissent can t just be dismissed because it comes from outsiders without a plan And complexity isn t a shield from criticism It s clear that Geithner did everything he could do Everything except ditch the play book Or ask foundational questions were the Wall Street banks actually providing a benefit to the economy Why funnel the rescue through the banks in the first place Is our current banking system the right intermediary for credit Warren, on the other hand, does just that because as she says not being in the club means never drinking the club s Kool Aid I had studied the banking system from the outside so none of it was sacred to me In the end, I was surprised by how much I actually liked Geithner And I ve never believed that the game was rigged Or at least no one is doing the rigging no bad guys or vampire squids Just a dogma so pervasive that everyone on the inside seems oblivious to life outside the sacred walls of Wall Street finance And like religious fundamentalists, all challengers to their faith are seen as wrong or misguided But we don t live in a Wall Street theocracy and we need to have a public discourse about what kind of banking system works for all of us.

  10. says:

    Fascinating book Compared to Bernanke s professorial approach, Stress Test is like listening to a neighbor share stories about their career A non technical and interesting read If you read only one book about the 2007 financial crisis, this should be it I ve enjoyed it so much that while I initially borrowed it from the library, I ve since purchased the Kindle version.

Leave a Reply

Your email address will not be published. Required fields are marked *