A Bear Too Far

If everyone is entitled to only one truly brilliant insight during his or her career, the New York Fed‘s President Tim Geithner may be pushing his luck.

Geithner is a career civil-servant who took over at the New York Fed in 2003. A few years ago he made banks standardize their credit default swaps. The result was spectacular. The growth of these swaps has allowed banks to diversify, selling their risk to parties who want it, like hedge funds or others.

Some say that the Fed’s arranged takeover of Bear Stearns was Geithner’s idea. Unlike standardizing swap language, it’s pretty controversial. For example, it encourages investors to relax when they do business with a big dealer. After all, if the Fed is the backstop, why worry?

Tim’s rise has been meteoric. The 46-year old Asian Studies major is now one of the Masters of the Universe. Here’s hoping that his big Bear deal doesn’t prove to be a bridge too far.


Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2017-07-17T12:35:25+00:00 March 31st, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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