Wall Street Folly

Federal Reserve Chairman Ben S. Bernanke juggled an interest-rate meeting with phone calls to senators as he rolled up more support for a confirmation vote Majority Leader Harry Reid said may occur tomorrow or Jan. 29.

“He has the votes to be confirmed,” Senator Judd Gregg, a New Hampshire Republican, told reporters in Washington. “He is the right guy for the job.” Late yesterday, Reid moved to limit debate and prevent senators from blocking a vote on confirmation. A procedural vote was set for tomorrow.

Senator Amy Klobuchar, a Minnesota Democrat, said she spoke with Bernanke yesterday and would vote yes. Republican Bob Corker of Tennessee, who had been leaning in Bernanke’s favor, also spoke with the Fed chief and said he would back him unless “something drops out of the skies.”….

U.S. Treasury Secretary Timothy Geithner denied any role in disclosures about American International Group’s payments to banks and defended his decisions as New York Federal Reserve chief to pay full price to retire AIG credit default swaps.

Geithner, in prepared testimony for a much-anticipated congressional hearing on Wednesday, said protracted demands for concessions from banks in late 2008 could have triggered devastating credit rating downgrades and brought AIG down, with “catastrophic” consequences for the U.S. economy….

Treasury Secretary Tim Geithner and his predecessor Hank Paulson will head to Capitol Hill today to defend their roles in the government’s controversial $182 billion rescue of insurance giant AIG, a deal that lawmakers on both sides of the aisle have denounced as “a backdoor bailout.”….

New York University Professor Nouriel Roubini said he’s never been more pessimistic about the future of European monetary union, saying Spain poses a looming threat to the euro region holding together.

“Down the line, not this year or two years from now, we could have a breakup of the monetary union,” Roubini said in a Bloomberg Radio interview from the World Economic Forum’s annual meeting in Davos, Switzerland. “It’s a rising risk.”…..

Carlyle Group LP co-founder David Rubenstein said it’s a “pretty attractive” time to invest, telling New York University Professor Nouriel Roubini that his pessimism about the economic outlook is misplaced.

“There are a lot of great opportunities we see in the United States and abroad,” Rubenstein said today at the World Economic Forum’s annual meeting in Davos, Switzerland. “Sometimes generals fight the last war, economists fight the last recession.”……

“There is now a debate about the shape of this recovery,” Roubini, who predicted the crisis a year before it began in 2007, told the opening panel before Rubenstein challenged him. “I see a faltering of growth in the U.S., Europe and Japan.”…..

- Robert Diamond, president of Barclays Plc, urged governments to coordinate bank regulation and resist the temptation to act in isolation before elections in the U.K. and the U.S….

“Isolated actions in the U.S. and U.K. aren’t beneficial when compared with the opportunity we have to work constructively through the G-20,” Diamond said during a panel discussion at the World Economic Forum in Davos. “The one thing I ask for is that regulation is connected between the major economies around the world.”……

Speakers at the World Economic Forum in Davos on Wednesday forecast that the global recovery would face many bumps in the road before it was secure.

At the opening session on the global economy – the debate that often sets the the tone at the annual forum – the panel expressed relief that the dire predictions of last year had not not materialised but predicted that the recovery from the recession would be far from smooth…..

Tags: Barclays, Ben Bernanke, Bob Diamon, Carlyle Group, David Rubinstein, Fed, Henry Paulson, Nouriel Roubini, Tim Geithner, U.S. Treasury