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 1990s, 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 more 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.
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 1990s, 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 more 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.
Author -
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 this book as a distinguished fellow at the Council on Foreign Relations.
I imagine most ratings will reflect their predisposition to the actions taken by the Fed and Treasury during the crisis. I did not come here to debate those.
I merely came to state that the book is an honest account of how Tim and the rest of us thought during the events described. This is what he believed, and what we believed. I cannot comment on the accounts from Treasury, though they correspond with what I annecdotally heard at the time.
SAMPLE CUSTOMER REVIEWS –
1) An honest account - I worked with Geithner at the NY Fed. I was a bit player present at many of the meetings and calls described.
I imagine most ratings will reflect their predisposition to the actions taken by the Fed and Treasury during the crisis. I did not come here to debate those.
I merely came to state that the book is an honest account of how Tim and the rest of us thought during the events described. This is what he believed, and what we believed. I cannot comment on the accounts from Treasury, though they correspond with what I annecdotally heard at the time.
By Brian L Peters on May 14, 2014
2) Beaten like a red haired stepchild - And, Geithner still seems shell shocked. He does a much better job framing the crisis in the book than in real time. But he still doesn't do an a sufficient job of conveying the crushing impact of market panic. It was the kind of fear that you can smell.
His major error is not emphasizing just how small the differences are between market based traditional bankruptcy, bailouts, and nationalization. With nationalization, the owners/shareholders are wiped out as well as some of the bondholders. In traditional bankruptcy, the owners/shareholders are wiped out and bondholders are usually wiped out or take a serious haircut. With partial nationalization (bailouts) including TARP and other guarantee programs, shareholders were either totally wiped out or lost 90% of their investment in the weakest banks. The shareholders of the stronger banks suffered dilution of their ownership through TARP fees, mandatory warrants, and Treasury imposed capital raises.
1/4 to 1/3 of the largest financial firms were effectively nationalized. The owners/shareholders were wiped out. The ONLY difference was the treatment of bond holders, who did better under the TARP and other backstop programs. And these bondholders weren't hedge funds or investment bankers. Hedge funds wouldn't touch low yield bank debt. It was owned by Pension Funds, bond mutual funds, ordinary people and institutions that look more like the president of your local branch bank then anyone on Wall Street.
Partial nationalization. If you don't believe it, ask Ralph Nader. "Nader has been arguing the government needs to recognize the rights of shareholders, instead of sending all the profits of the GSEs to the Treasury, aside from minimal capital buffers." Yes Fannie Mae and Freddy Mac were bailed out. But the owners/shareholders weren't bailed out. Nader complains that all the profits were sent to the taxpayer. Per Nader, "... they sensed that this would help keep the deficit down -- that this huge Niagara of profits would --and they were right on that." That 'huge Niagara went to the TAXPAYERS.
Geithner was beaten like a red haired stepchild. And he plays defense in this book.
The story he didn't spell out in 18 point type is:
1. TARP had a positive return of $billions. Which went to the taxpayer.
2. A huge portion of the financial system WAS effectively nationalized Bear Sterns, WaMu, Wachovia, Fannie Mae, Freddie Mac, 80% of Citi, 92% of AIG and small chunks of the institutions that were required to increase capital by Geithner's stress test.
3. When the Fed and Treasury acted, markets that had been worshiped since the breakup of the USSR -- failed. For a market system to work, markets need to be relatively efficient, liquid and deep. These characteristics, which were plausible prior to panic, were proven to be illusory.
4. The greed of the prior decade was reversed and replaced by the ice cold sweat of fear. Financial markets were frozen and our economy went into free fall.
5. Geithner won. The Fed, Treasury, and both Bush and Obama saved the country from Great Depression 2.0.
The misnamed bailout didn't bail out the owners of weak financial firms. It bailed out the rest of the country, including iconic American brands like Harley Davidson. Harley (ticker symbol HOG) is the only brand in history whose most loyal customers get tattooed with the brand name permanently and prominently. In early 2009, it was simply unable to finance sales to customers with good credit. It was choking on loans that couldn't be sold into frozen markets. Geithner's TALF broke that logjam and prevented businesses from disintegrating. Anyone that doesn't believe this should simply look it up.
Yes Geithner said it.
But he should have said it more like this. With conviction.
By Generic Guy on May 19, 2014
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