My mother always warned me not to be such a big man that I cannot apologize, so I apologize to Treasury Secretary Timothy Geithner.
I have long held the belief the economy was on a slow but sustainable path to recovery, unless we have another "heart attack," which will happen in the financial sector when (not if) there is a major derivatives failure. I was very critical of the Obama Adminstration, especially the Treasury Secretary, for pushing re-regulation of everything else in financial services, except one of the primary causes of the last financial crisis, i.e., derivatives. (In fairness, I was also very critical of Congress for largely ignoring this nagging cancer of the body of our economy during the Dodd-Frank debate last year.)
Yesterday in Atlanta, Mr. Geithner finally took a stand by calling for global standards in derivatives contracts, in order to prevent a global "race to the bottom." So, I apologize for saying he didn't understand this complex problem.
However, while he did stand up at last, he may have done it for the wrong reason, i.e., to protect the large U.S. banks who make billions of dollars structuring derivatives, rather than to protect the whole U.S. financial system. Yet, it is a step in the right direction.
Again, there are good derivatives and bad derivatives. But, we don't how much of either are out there, nor the terms. It is a giant black hole of worry for me! As a result, I generally don't like holding stocks of companies in the financial sector.
Of course, I know Secretary Geithner doesn't care if I apologized or not . . . but my mother would!
