Tuesday, February 10, 2009


On November 21, when Barack Obama announced that he was nominating Tim Geithner to be his Treasury secretary, the Dow rose 494 points and broke through the 8,000 barrier. On February 10, when Geithner gave his first major speech as Treasury secretary, the Dow fell 273 points and broke through the 8,000 barrier.
Two great lines from Felix Salmon. I would like to believe in the efficient markets hypothesis but the fact that inTrade does not have a prediction market for when Gaithner will resign casts doubt, at least on the strong version of the emh. It was not just the markets that were disappointed in Gaithner's performance, yesterday members of Congress were not impressed either.

Gaithner's tax evasion - yes, I use that term and not tax avoidance - was reason enough to oppose his nomination. But instead we were told that his nomination was too important to be held up over some trivial mistakes made years ago. We were told that with his experience at the NY Fed he would be able to hit the ground running. Instead, after much time to prepare, we got a statement that they were considering their options, they had some good ideas, and that in general they would get back to us soon. And they delayed his press conference by a day to bring us this news. So where's that prediction market?

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