Prof. Krugman VS Tim Geithner, to whom will be right? (Part I)

Prof. Krugman VS Tim Geithner, to whom will be right? (Part I)\r\n \r\n To Geithner’plan , Prof. Krugman asserted that he will fail all the programs. It is totally permissive and out of evidence, a kind of assertion only could by made by HK academics………..please see Part II \r\n\r\n\r\n\r\n\r\n\r\n\r\n

Prof. Krugman VS Tim Geithner, to whom will be right? (Part I) First I would like to thank the young, hungry and innocent Mr. Geithner to stay on the most pressured job, Treasury Secretary. Young, for a 40+, he is young and not has very much experience in risk management. Hungry, who does not want to be TS? Innocent, he thinks he can handle the cunning and old Washington Politicians and the dogged media! Result, Mr. Geithner appeared lost 5 to 15 pounds because the pressure and hard work drove him loss weight. Buddy! You’d better taken Tai Chi exercise to clam down your stress and anxiety. And I hope Mr. Geithner is not Wall Street Trojan horse. Otherwise, I will "grass-mud-horse!( Chinese Joke!") (However, I suspect his predecessor may be either a Trojan horse of Wall Street or GS. Ask Lehman Brothers’ Richard Fuld , he may tell you!) Now comes to Prof. Paul Krugman. Same old words: I love Prof. Krugman, but I would love the truth more. The truth is that, Prof. Krugman criticized Geithner’s Public-Private Investment Program in his column, on March 23, 2009 NYT with his prediction in black and white Financial Policy Despair: It (Geithner’s plan) almost surely will fail! To my surprise, Prof. Krugman even didn’t wait to see the original copy came out, he concluded his prediction based on the leaked from The Times and other newspaper editions. During the 1998 Hong Kong Economic storm, I had seen and heard so many this kinds of "assertions!" No data , without any statistics and even not his specialty, the HK U very famous (in HKU famous not mean he is good!), economics major Professor Cheung XX predicted: If Hong Kong Government purchased stocks with tax payer’s money, Hong Kong will be dead because the governmental intervention! Result: He was dead wrong, HK survived! In hindsight, even his mentor, the late Milton Friedman admitted that: Economy is not science; HK Government may be right to intervene the market in an extraordinally time! Academics are always wrong, especially in the extraordinally time. Readers should take note: most Economy Schools in HK are not very high standard as US, So, does the Economy professor. Former economics Prof. Cheung XX of HKU made such silly assertion, not a bit of surprise to me. Difference, form most HK Economic Professors and Prof. Friedman. Prof. Krugman and I both support the intervention. Prudent is risk, waiting is danger! We both agree Big and Quick ferderal intervention. To my surprise Prof. Krugman still insists Swedish model to nationalize the bank (I oppose). Readers should read the article: Self-assembly Solution of March, 17 ,2009 of Financial Time about the bail out Swedish model. Here I quote some lines from it : "Contrary to the myth that surrounds the Swedish model, the Authorities nationalized only two banks- Nork Banken and Gota Banken ( This Author noted, Gota already in bankruptcy when it was nationalized!) The Authorities admitted that they were small banks not as big as City or Bank of America! And Sweden was not in recession like US kind at that time and they said: "May be we are successful, we will never know!" FT summarized this kind of feeling: Disconcerting! I doubt Prof. Krugman red this article! Now comes another truth of Mr. Geithner’s Public-Private Investment Program, to my understand, it has two key parts, "The two key elements of the plan are: • Legacy Loans Program: a program to combine an FDIC guarantee of debt financing with equity capital from the private sector and the Treasury to support the purchase of troubled loans from insured depository institutions. • Legacy Securities Program: a program to combine financing from the Federal Reserve and Treasury through the Term Asset-Backed Securities Loan Facility ("TALF") with equity capital from the private sector and the Treasury to address the problem of troubled securities." (Quoted from the Treasury white paper) To Geithner’plan , Prof. Krugman asserted that he will fail all the programs. It is totally permissive and out of evidence, a kind of assertion only could by made by HK academics………..please see Part II

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