Tags: Fink | Geithner | diary | spoke

FT: BlackRock CEO Is Geithner’s Go-To Guy

Friday, 12 Oct 2012 10:38 AM

Laurence Fink, CEO of asset management giant BlackRock, is U.S. Treasury Secretary Tim Geithner’s go-to guy when it comes to getting the scoop on the markets and how the markets are reacting to government policy, a Financial Times review of Treasury records reveals.

Fink appeared more frequently in Geithner’s diary over an 18-month period than any other corporate executive, the Times found, adding Geithner and Fink spoke on at least 49 separate occasions, an average of about once every 11 days.

In second place among corporate executives, Robert Rubin, himself a former Treasury Secretary, met with Geithner 33 times during the same period.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

The Treasury Secretary’s records are open to the public.

“The secretary routinely speaks with a broad range of stakeholders and market participants regarding domestic and international economic matters,” the Treasury said in a statement to the newspaper.

Geithner is seen stepping down after President Barack Obama’s first term and if the president is re-elected, Fink is on a short-list of those outside the administration to fill the spot, The Wall Street Journal reported.

Other names being floated include Roger Altman, chairman at Evercore Partners and former Deputy Treasury Secretary, and Daniel Doctoroff, chief executive of Bloomberg.

Those closer to the administration who could replace Geithner include White House Chief of Staff Jacob Lew and Clinton administration Chief of Staff Erskine Bowles, The Journal added.

Whoever takes the job will begin work battling the fiscal cliff, a combination of expiring tax breaks and inbound cuts to government spending that converge at the end of this year.

The nonpartisan Congressional Budget Office has said that failure to deal with the fiscal cliff could send the country into a recession next year.

A BlackRock report, meanwhile, finds that markets aren’t paying enough attention to the fast-approaching fiscal cliff, assuming lawmakers will strike a deal at the last minute to stave off disaster.

Stocks have been rising due to Federal Reserve monetary stimulus tools.

The Federal Reserve recently announced plans to buy $40 billion in mortgage-backed securities held by banks every month until the economy and labor market improve, a monetary policy tool known as quantitative easing, dubbed QE3 by the markets since it represents the third time the Fed has juiced the economy with liquidity to push low interest rates even lower.

“The S&P 500 index is close to record highs and volatility is eerily low. Markets have not priced in the fiscal cliff and assume QE Infinity [the third round of quantitative easing] will drown out other factors,” BlackRock said in a new report.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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