"Sheila's from Kansas. We're not loaded with rich people, just a lot of hard-working farmers and small-businessmen eking out a living. So she understands that people need help fixing their problems...With Sheila it's not just, 'somebody lost their home, isn't that a shame?' She's been saying, 'How can we prevent it or delay it?...That's compassionate conservatism. How can people be critical of that?"Good question we're happy to answer! Back in October, as Wachovia was collapsing under the weight of toxic synthetic mortgages and the like, Bair was in the final stages of engineering a last-ditch deal for Citigroup to buy most of the bank, with government help, for two billion dollars, when Wells Fargo offered more money to take over the entire bank without public assistance. Bair steered Wachovia to the better deal, since that was the bank's fiduciary responsibility to its shareholders and Bair's civic duty to us taxpayers, but Citigroup, where Bob Rubin was still on the payroll and the payroll was not yet being financed by his old protege Tim Geithner, was royally pissed.
But since then Bair has made friends with the likes of Barney Frank, Chris Dodd, Ben Bernanke and Caroline Kennedy, who just bestowed upon Bair -- along with a colleague from her days at the Commodity Futures Trading Commission named Brooksley Born, whose repeated and strenuous attempts to regulate derivatives in 1998 were blocked by the aforementioned Bob Rubin -- a "Profile In Courage" award for her public service.
And now Tim Geithner, down to his last fifty billion dollars in TARP funds, may find himself befriending Bair as well -- because it's the FDIC's $500 billion lending facility with the Federal Reserve he needs to draw on to offer the non-recourse "Legacy Loans" to money managers as incentive to buy up some of those toxic assets. That means Bair will in effect be charged with insuring the loans extended to said money managers -- and like most insurers not named AIG, she believes in conducting due diligence before handing out guarantees. The agency is now publicly seeking advice from the financial community on how best to execute the program, and earlier this week there was even talk that she might be next in line for Geithner's job.
Bair has started to gain support, even from those who once considered unseating her, sources said.You gotta wonder at this point if "sources" = Geithner.