There is no way to know why stocks go up or down every day. That's why I always find it somewhat silly when I see simple explanations for the movement in prices. The explanation offered for today's 494 point rise is that investors are celebrating the rumor that Timothy Geithner will be the next Treasury Secretary. How does the media know that investors are only celebrating Geithner's appointment and not that of Bill Richardson as Commerce Secretary?
Make no mistake. I agree with the choice of Geithner and made a case for him over former Harvard president, Lawrence Summers, and former Fed Chair Paul Volcker. My reasoning for Geithner was that he had excellent interpersonal skills and high energy coupled with an intimate familiarity with the current financial crisis. Unlike Summers, Geithner is highly unlikely to alienate people, and having picked Hillary Clinton as Secretary of State, President-elect Obama will have enough drama on his hands with both Clintons.
Geithner shares something with current Treasury Secretary Hank Paulson -- he graduated from Dartmouth. I hope that he makes far better use of that Ivy League education in the Treasury Secretary's role than his predecessor. While Geithner will be left with a huge mess that was not helped by his fellow Dartmouth alum, it will be difficult for him to do a worse job than Paulson. The world will be depending on him.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
11-21-2008 @ 11:09PM
Kent said...
I briefly researched Tim Gaithner's bio and certainly indicates he's a man of worldly intellect. He's, intuitively I feel, a man I can trust on the job although by relative standards to other seasoned professionals a little bit wet behind the ears yet. But he'll grow fast into his job for sure. His next big job now is to find people to fill his staff. I was concerned that BO would have appointed another Wall Street insider. What a relief, he didn't.
11-22-2008 @ 9:06AM
Richard said...
Kent, I don't know where you've been, but the President of the NY fed is an insider BY DEFINITION. I can guarantee you Geithner would not be NY Fed Pres' without Wallstreet blessing (ie. Goldman Sachs) The job of the NY Fed is to keep wallstreet happy. Read Greenspan book that will help you out. You have to understand it's a club:Wallstreet/Big Banks (think Citi, and JPMorgan here) and the US Treasury.