Geithnergate Will it Go Away?

Investing Online - Stock Market for Beginners - GeithnerGate, Will It Go Away?

Would You Buy Stocks from Tim Geithner?

Tim Geithner has been President of the FED of New York since 2003, it is therefore particularly worrying that Geithner, who will be responsible for overseeing the Internal Revenue Service, forgot to pay over $34,000 in federal taxes and we are assked to believe that the reason he didn't pay was that he 'forgot' - well that's OK then - the guy's just incompetent, not a crook.

But why would Obama want someone incompetent in charge of US finances?

In addition, the Senate Finance Committee found other violations by Geithner, including his use of a "child's time at overnight camps to calculate dependent-care tax deductions", which is not allowed. And that he employed an immigrant whose work eligibility had lapsed as a household employee.

That's three counts of incompetence so far and the guy hasn't even started his job yet.

Barack Obama has called this an "embarrassment", there are plenty of people in the US who are calling it a lot more, and there other people in the US who wish it would just all go away. But will it? And should it?

The Editor of the Des Moines Register has said : "It arouses suspicion that Geithner thought he could get away with these oversights to save some money, not the sort of integrity that the president-elect has sought for his administration." The comment on his site are even more disparaging. Stormin for example wrote "The trouble is he will get confirmed cause the crooks are operating the bank and the lunatics are running the asylum."

Senators are being urged to get to the bottom of what Geithner did, but whether they will is another matter. I suspect the whole matter will be brushed under the carpet just like in the good old days before Saint Barack everything changed.

[Update : 5 weeks after taking office President Obama and Tim Geithner still have not come up with a detailed economic recovery plan - the markets have fallen around 1200 points a a result and look likely to continue falling - all the way down to 6000 on the DOW if Glodman Sachs are to be believed]


Million Dollar Traders BBC Show

Investing Online - Stock Market for Beginners - Million Dollar Traders BBC TV Show

As a beginner in the stockmarket I was interested to see the new reality TV show on the BBC - Million Dollar Traders.

The stock market for beginners idea behind the show is that eight 'ordinary' people (i.e. people who know very little about the stockmarket and share trading) are given two weeks intensive training, then let loose on the stock market to buy stocks for two months with 500,000 quid of someone else's money to partake in a spot of online stock trading. What would Warren Buffett make of all this? Can they do better than the so-called experts? You know those people who came up with CDOs and sub-prime mortgages and who ruined the world economy and are now being bailed out right, left and centre by taxpayer money, or even non-existent money, which the Royal Mint is now busy printing?

The 'someone else' providing the money is hedge fund manager Lex van Dam : his aim is to see if 'ordinary' people (why all these references in the BBC blurb to 'ordinary' people is the implication that city traders are 'extraordinary' people ?) can beat the professionals, he also expects to make a profit - ha ha the guy is clearly an expert.

Lex Van Dam despite working in the world of high finance seems quite rational, saying : “What’s become clear over the past year is that the experts don’t know. If you just do what the experts tell you it’s probably the quickest way of losing your money."

“And if something looks too good to be true it probably isn’t true – like the Madoff fraud. You can’t trust the Government, and you can’t trust companies.”

Mr Van Dam believes passionately that you don't need a business education to be a successful trader. “When I worked at Goldman Sachs I went through a training programme and most people there had MBAs and the view was that you need lots of education to be a good trader but I don’t think so. It’s not that complicated, you just need to stick to a few rules.”

However, "no-one foresees the financial crisis that lies ahead" - that's straight from the BBC blurb and it is revealing as it is a tacit admission that none of the 'extraordinary' professionals had a clue that the world stockmarkets were heading into their worst bear market since 1929.

The eight novice traders were selected in spring 2008 and are :-
  • an environmentalist
  • a soldier
  • a cage fighting promoter
  • an entrepreneur
  • a retired IT consultant
  • a vet
  • a student
  • a shopkeeper.
Needless to say, they struggle - let's face it they are being launched with just two weeks training into the biggest financial meltdown in modern times. The BBC must have been overjoyed at the result, but there is no suggestion that the eight novices actually caused the financial meltdown.
The first episode was great fun and we look forward to more financial fannying about over the coming weeks!

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