http://www.reuters.com/…

U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency.

A major goal of Geithner’s maiden visit to China as Treasury chief is to allay concerns that Washington’s bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.

China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China’s total U.S. dollar-denominated investments could be twice as high.

“Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

Next time may I recommend a rotten tomato or two? Just for theatrics. Don’t hit the man. He’s sad enough.

http://www.bloomberg.com/…

The following table details how the Fed and the government have committed the money on behalf of American taxpayers over the past 20 months, according to data compiled by Bloomberg.

===========================================================
                                  --- Amounts (Billions)---
                                   Limit          Current
===========================================================
Total                            $12,798.14     $4,169.71
-----------------------------------------------------------
 Federal Reserve Total            $7,765.64     $1,678.71
  Primary Credit Discount           $110.74        $61.31
  Secondary Credit                    $0.19         $1.00
  Primary dealer and others         $147.00        $20.18
  ABCP Liquidity                    $152.11         $6.85
  AIG Credit                         $60.00        $43.19
  Net Portfolio CP Funding        $1,800.00       $241.31
  Maiden Lane (Bear Stearns)         $29.50        $28.82
  Maiden Lane II  (AIG)              $22.50        $18.54
  Maiden Lane III (AIG)              $30.00        $24.04
  Term Securities Lending           $250.00        $88.55
  Term Auction Facility             $900.00       $468.59
  Securities lending overnight       $10.00         $4.41
  Term Asset-Backed Loan Facility   $900.00         $4.71
  Currency Swaps/Other Assets       $606.00       $377.87
  MMIFF                             $540.00         $0.00
  GSE Debt Purchases                $600.00        $50.39
  GSE Mortgage-Backed Securities  $1,000.00       $236.16
  Citigroup Bailout Fed Portion     $220.40         $0.00
  Bank of America Bailout            $87.20         $0.00
  Commitment to Buy Treasuries      $300.00         $7.50
-----------------------------------------------------------
  FDIC Total                      $2,038.50       $357.50
   Public-Private Investment*       $500.00          0.00
   FDIC Liquidity Guarantees      $1,400.00       $316.50
   GE                               $126.00        $41.00
   Citigroup Bailout FDIC            $10.00         $0.00
   Bank of America Bailout FDIC       $2.50         $0.00
-----------------------------------------------------------
 Treasury Total                   $2,694.00     $1,833.50
  TARP                              $700.00       $599.50
  Tax Break for Banks                $29.00        $29.00
  Stimulus Package (Bush)           $168.00       $168.00
  Stimulus II (Obama)               $787.00       $787.00
  Treasury Exchange Stabilization    $50.00        $50.00
  Student Loan Purchases             $60.00         $0.00
  Support for Fannie/Freddie        $400.00       $200.00
  Line of Credit for FDIC*          $500.00         $0.00
-----------------------------------------------------------
HUD Total                           $300.00       $300.00
  Hope for Homeowners FHA           $300.00       $300.00
-----------------------------------------------------------
The FDIC’s commitment to guarantee lending under the
Legacy Loan Program and the Legacy Asset Program includes a $500
billion line of credit from the U.S. Treasury.

Awesome. And Krugman says they aren’t spending enough. I guess we need to catch up to Japan with their debt being 170% GDP. Obama’s going to have to do better than $10 trillion deficit over the next 8 years to pull this off.

I missed this part. Too bad she moved on with her first question. I think hammering them for a few minutes would have been far more powerful.

I watched this live and cracked up when he said this. I was just amazed by his arrogance or perhaps delusion. I’m not the only one.

Geithner’s Arrogance Knows No Bounds

Inquiring minds are listening to Geithner explain to Congress how his plan works. Here is a transcript of a conversation between Rep Gresham Barrett and Treasury Secretary Geithner.

Rep Gresham Barrett: “The last question I have guys, which is the $64 million question or I guess I should say $64 trillion question is: What’s the backup plan? If everything fails what do we do? Where do we go from here?”

Treasury Secretary Geithner: “Congressman this plan will work. This plan because of the authority provided not just by Congress but the treasury and the Fed gives us broad ability to do what you need to do to get through a financial crisis like this. It just requires will; It’s not about ability. We just need to keep at it. We just need to work with Congress to make sure we do this on a scale that will make it work.

Someone needs to get this Jon Stewart on the Daily show. I think he will have a field day with “It [The Plan] just requires will; It’s not about ability.” Unfortunately, Geithner’s attitude is more scary than it is funny.

http://finance.yahoo.com/…

Citigroup’s chief economist is being tapped for a job at the short-staffed Treasury Department, which is at the center of the Obama administration’s efforts to battle the financial crisis.

Lewis Alexander will become a counselor to Treasury Secretary Timothy Geithner, according to a government official who spoke on condition of anonymity because a formal announcement has not been made. Alexander will work on domestic finance matters, the official said.

Alexander had worked at the Federal Reserve and also served as the Commerce Department’s chief economist in the 1990s.

Geithner so far has battled the crisis with no key deputies in place. That’s made for a rocky start for the man President Barack Obama put on the front lines of the financial crisis.

Treasury’s handling of a $700 billion financial bailout fund has drawn fierce criticism from Congress and the American public. The government has put up hundreds of billions of taxpayers’ dollars to rescue troubled financial companies, including American International Group, Bank of America and Lewis Alexander’s own Citigroup Inc.

In late February, the government said it will exchange up to $25 billion in emergency bailout money it provided Citigroup for as much as a 36 percent ownership stake in the struggling bank, a move that could put taxpayers at greater risk. The deal represented the third rescue attempt for Citigroup in the past five months. It’s contingent on private investors agreeing to a similar swap.

As a Wall Street insider from a bank that has been one of the largest recipients of government rescue funds, Alexander’s appointment could raise some eyebrows. In December 2007, he was quoted as saying that while he believed the housing market would remain weak well into 2008, it was more likely that the economy would keep growing than head into recession, adding that the housing bubble was “correcting on its own.”

The same Citigroup which is now partially nationalized? The one that made lots of bad business decisions on his watch? He’s now going to work for an institution with even more economic power?

And yet people are pissed over some AIG bonuses?