Summers and Geithner

Will Lawrence Summers resign or be sacked as as Director of the National Economic Council in 2010?

Will Timothy Geithner depart as Secretary of the Treasury in 2010?

Will both depart this year?

Lots of speculation on a Summers resignation...

And more speculation.

I think Summers will go, just a matter of timing - as was the case with JG Brown.

Two down, two to go.

Romer gone makes Summers more likely to stay, not less.

I think a lot will depend on November.
Summers has already stayed longer than most do in these roles.

At the current pricing I think its worth a punt.

Stronger renewed calls for their dismissal from both Republicans and Democrats:

[blogs.wsj.com]
[voices.washingtonpost.com]
[www.mynews4.com]
[www.reuters.com]

..And Summers is done.



Edited 1 time(s). Last edit at 09/21/2010 10:37PM by defaultswap.

Just gotta get Geithner out now

Since Summers resignation - Intrade has Geithner to depart at 15% likely now. ipredict around 8%

Had worried about close date issues on Summers, but anything up to first working day in January works by contract definition, so this seems done.

I think Geithner will stay. His public image seems to have improved, if anything his role is broadening.

I think we need a new stock for US economics related personalities. Perhaps something that could cover Tim Geithner v Elizabeth Warren over the consumer protection bureau.

Background

Ok, we'll close this once there is clarity on timing. The contract is judged on when Mr Summers' departure takes effect.

admin Wrote:
-------------------------------------------------------
> Ok, we'll close this once there is clarity on
> timing. The contract is judged on when Mr Summers'
> departure takes effect.


The white house press release says he is leaving at the end of the year, which means the contract should be able to close.

"At the end of the year" is pretty vague. It would suck to close this now only to find that he actually departs mid-January, which is when he's due to be back at Harvard (I believe).

If everyone was of the opinion that this is ready to close, then wouldn't SUMMERS.RESIGN be trading at 0.9999 or close to it?

I think the fact that it is at 0.9427 / 0.9462 means that the 'voting users' (as weighted by their involvement in the market) say keep it open.

Alan.

PS: I am just about cleared out myself - I have minus 1 of US.BOTH.RESIGN and none of SUMMERS.RESIGN right now, so not really 'interested' in that respect.

defaultswap Wrote:
-------------------------------------------------------
> "At the end of the year" is pretty vague. It
> would suck to close this now only to find that he
> actually departs mid-January, which is when he's
> due to be back at Harvard (I believe).


If it was going to be mid-Jan they would have said early next year.

I don't think the price is showing the probability anymore only the time value of money if this doesn't close until December. (and lots of people trying to take profit)

[www.observer.com]

Suggestions that if the democrats lose either house that Geithner will be the fall guy for the recent economic problems.

intrade has geithner to depart at 0.40, iPredict seems pretty underpriced

Sssshhh

[www.cnbc.com]

Yes I saw this one earlier in the week... I was trying to buy up while the price stayed low

Remember it's by the end of 2010. I imagine the hand-over period could be substantial.

Contracts on who will replace Summers?

Summers speaks on successor

Lots of names going round, fmr CEO of Xerox sounds likely or maybe one of the heads of PIMCO

Happy to take suggestions. Or steal borrow them from Intrade.

Having just read the rather long discussion on the Australian dollar I am more convinced this should close now.

I think the test must be the reporting/announcement of when he leaves:

This contract will close at $1 on Mr Summers' resignation, sacking, or permanent departure due to any reason.

This contract will be judged based on when Mr Summers' departure takes effect

It has been reported by the white house that he will be going to Harvard at the end of this year:

Dr. Lawrence H. Summers, Director of the National Economic Council, to Return to Harvard University at the End of the Year

that statement is very clear about when he will leave and the test is therefore satisfied. also other contracts like MP.ANDERTON.2010 were able to be closed on this type of announcement.

The MP.ANDERTON 'test' was whether Anderton would announce he will not stand. The SUMMERS.RESIGN test is whether or not Summers will actually depart by 3 January. Summers has not yet departed, so this contract is still in play - as the current price attests to.

defaultswap Wrote:
-------------------------------------------------------
> The MP.ANDERTON 'test' was whether Anderton would
> announce he will not stand. The SUMMERS.RESIGN
> test is whether or not Summers will actually
> depart by 3 January. Summers has not yet
> departed, so this contract is still in play - as
> the current price attests to.


I disagree that it is about his actual departure, its about an announcement of a date. I think it is unlikely the media will show him walking out the door on his last day because his departure is already widely understood.

This seems actually more debatable than the OzDollar contract, going by the judging criteria:

”to measure the likelihood of LS surviving 2010” - debatable whether he has survived 2010 or fallen during 2010.

“Departure must be announced” - clearly met.

“This contract will close at $1 on Mr Summers' resignation...” - Clearly met

“This contract will be judged based on when Mr Summers' departure takes effect.” - Hmmmm...

Interesting. Gotta love contract law.

”Judging Criteria“
”The purpose of this contract is to measure the likelihood of Lawrence Summers surviving 2010 as US Director of the US National Economic Council.
Departure must be announced or widely understood to be permanent. This contract will not close, for example, due to sick leave, or due to an Acting Director being appointed while Mr Summers is overseas or on holiday or temporarily stood down.
This contract will close at $1 on Mr Summers' resignation, sacking, or permanent departure due to any reason.
This contract will be judged based on when Mr Summers' departure takes effect
Note: this contract will close at $1 for a departure up to and including departure on Monday 3 January 2011 US Eastern Standard Time, the first working day of the year.“

Seems pretty obvious to me.

This contract will be judged based on when Mr Summers' departure takes effect....

Not complicated