Tim Geithner Told Us What The Next Financial Doom Machine Will Look Like
It's a look back. So when Business Insider spoke with Geithner on Wednesday, we asked him to look forward to the next financial doom machine - the next product, the next policy that will systematically churn out economic ruin and spread itself around the world.
We asked him to describe what that next doom machine might look like.
It didn't take him much time at all to respond.
"It will have this feature of guarantee with no risk," he said.
Geithner described it as a product, an innovation that will be sold to consumers as a guarantee. Once financial institutions get their hands on it, however, they'll use it to buy something risky.
He made it sound like a very contagious, latent virus.
The mortgage crisis was exactly like that, it spread everywhere before many people knew how dangerous it was. It had the features he described above, but also some of its own distinct properties. That's what made it so hard to cure.
Geithner told us there was a sort-of Doomsday manual for crisis at the New York Federal Reserve, where he was once President.
When he cracked its covers, Geithner said "It sounded cool, hopeful even." At least there was a solution.
But by December 2007, they had run through all the options.
The question after that was - now what?
"There's no chance of vindication," he said, referring to his book's reception.
He just wants you all to understand what he was dealing with.