Geithner Is Not Going Anywhere

Treasury Secretary Geithner “has been a lightning rod for the Obama administration even longer than he's formally held his position,” says the Washington Post. The story traces through Geithner’s history with Obama and the department and notes with some alarm the latest breakdown of comity in Washington: Geithner’s treatment at the hands of House Republicans this past week. Even some conservative Democrats have refused to support the secretary, but, because he has the full support of the administration, calling him ‘embattled’ seems completely incorrect. Geithner, as the article notes, was given credit for defending himself and the president, saying, in one case, that Republicans in the House "gave this president an economy falling off the cliff."

Ohio is going after the credit-ratings agencies in court, suing Moody’s, Standard & Poor’s, and Fitch, says the New York Times. Specifically, the state claims it lost $457 million from its pension and retirement funds thanks to the agencies being in cahoots with the issuers and banks behind much of the bad debt responsible for the losses. The case is not a slam-dunk—if the courts find issuing ratings to be protected free speech, things could get messy. The agencies have long claimed their work is more like journalism than consulting, despite the quasi-official status and importance that the grades have on Wall Street. The California pension fund Calpers is also suing, but the ratings agencies are famous for an almost completely unblemished court record dealing with these kinds of charges.

The massive but conservatively managed Hershey (HSY) is deciding whether it wants to let Kraft (KFT) have an uncontested shot at acquiring British chocolate maker Cadbury (CBY), as has been the case. “Kraft has so far emerged as the only suitor for Cadbury, and were it to succeed it would become an international food giant that could threaten Hershey’s expansion prospects,” says the paper. But it turns out that Cadbury execs don’t really fancy working for the food conglomerate, providing an opening for another interested company. Hershey, meanwhile, has little debt, making an acquisition possible, but little cash, making it harder. Complicating the issue is that Hershey is 79 percent owned by a trust that serves the town of Hershey, Penn., workers, a local school, and other charitable institutions. A previous decision by the trust to buy Wrigley completely fell apart and led to mass resignations by members, and criticism from elected and judicial officials. Hershey executives seem to be acutely afraid of making the same mistake again but still sense an opportunity to steal Cadbury from Kraft controlling shareholder Warren Buffett, whose $16.7 billion bid would have to be trumped by at least $300 million to be considered.

Speaking of $300 million, that’s how much a Florida jury has awarded to “a former smoker who says she needs a lung transplant.” An expert tells the paper that the ruling, against Philip Morris, “would be the nation’s largest award of damages to an individual suing a tobacco company and could encourage thousands of plaintiffs who have filed similar cases in Florida.” Her lawyer said, “She’ll get paid, I would hope, within a year or two. The question is will she live long enough.”

The Japanese “lost decade” meme is re-entering discussions, with the latest comparisons being made to Britain, reports the Times. In fact, analysts have thrown out American comparisons and say Britain, for a variety of reasons detailed in the article, represents the greater risk. It was Adam Posen, an American, who gave a speech at the Bank of England on the similarities, which are recounted at length. Although Posen stresses the views are his alone, the klaxon appears to have been sounded.

Finally, a recent survey says the stimulus was “a worthy step.” The Times interviews experts from the many fields the wide-ranging package dealt with, and the consensus seemed to be that even if the stimulus wasn’t perfect, things are still far better because of it. Most conservatives, meanwhile, remained skeptical.