Speaking Ill Of A Dead Man (Walking)

As I was saying yesterday, a really, really good sign that you're in trouble inside the Beltway is not that people are calling for you to get fired, but that people are actively discussing who your replacement will be.  That applies to Michael Steele over at the RNC certainly, but that definitely applies to Obama's Treasury Secretary, Tim Geithner as well.

Just as this week revealed how much trouble Steele is in, the bigger story may be the new information this week about how much trouble Timmy is in.

Rep. Edolphus Towns (D-NY) said he plans to hold a hearing on the AIG bailouts sometime in January and plans to ask Sec. Timothy Geithner to testify about why the New York Federal Reserve told AIG to hide massive payments to banks, according to a published report.

"More than one year after the first federal bailout of AIG, the American people continue to question where their tax dollars were really sent when the government rescued this company," Towns said in a statement, The Washington Post reported. "I continue to believe that a comprehensive review of the rise and fall of AIG and the involvement of counterparties can provide a useful vehicle to understanding how inadequate regulations, cheap money, risky business deals, and in some instances, corruption led to the current economic crisis."

In the aftermath of its near collapse, AIG was told by the New York Federal Reserve to keep off the books its planned over-payments to other banks that had agreed to purchase its toxic assets, most notably Goldman Sachs. The move was revealed in a series of e-mails unearthed by Congressional investigators working for the Troubled Asset Relief Program inspector general.

"After the firm was given a taxpayer-funded backstop, one of its most controversial acts was to repay banks at 100 cents on the dollar for what was by that point nearly worthless insurance the banks had bought from AIG, known as credit-default swaps," The Huffington Post noted. "A brutal report issued in November by a government watchdog disclosed that AIG had actually been trying to negotiate better terms with the banks until - guess what? -- the New York Fed stepped in. The report held Geithner personally responsible, and led to renewed questions about his fitness for the job."

Those questions were echoed by MSNBC's liberal host Ed Schultz, who wondered aloud on Thursday night whether the scandal would be "the end" of Geithner.

"If there's anybody out there who's still harboring any doubt that the fix is in, I mean that most of this government has become a government of the bankers, by the bankers and for the bankers, this story has got to put an end to that and it's also got to put an end to Tim Geithner," Huffington editor Roy Sekoff opined to Schultz.

White House Press Secretary Robert Gibbs defended the embattled Treasury secretary on Friday, telling reporters that Geithner had recused himself from the AIG negotiations and "wasn't party to the decision" to have AIG hide its payments.

Rep. Barney Frank (D-MA), who chairs the House Financial Services Committee, said Friday that he is "troubled" by reports of the NY Fed's actions and plans to hold a hearing on the matter, according to Politico.

That's a big-ass list of people who seem to think Timmy's headed for circular file cabinet, and Gibbs is not exactly defending Timmy there.  I predicted Timmy would be gone by 2010.  I was wrong...but it's looking like I may have been only wrong about the when part...and not by much, either.  Two separate House committees are looking to hold hearings on this about possibly withholding damning info from oversight...not a good sign at all if it's your own administration's party doing it during an election year.  Also, note that the Senate Banking Committee is laying low on this one.  That makes sense if the chair of that committee, Chris Dodd, is in line for the job.

I'm strongly leaning towards believing Mr. Geithner's days are quite numbered.  They're going to want this done fast.  And enough Republicans have come out against Geithner (and Bernanke for that matter) that this will probably happen soon.