- The Washington Times - Saturday, November 22, 2008

Reports that Federal Reserve Bank of New York President Tim Geithner will be named Treasury secretary sparked a massive rally on Wall Street Friday, as markets responded jubilantly to President-elect Barack Obama’s expected choice.

News of other major appointments also broke late Friday, with New Mexico Gov. Bill Richardson expected to become commerce secretary and retired Marine Gen. James L. Jones Jr., a highly decorated commander, appearing to be the top choice for national security adviser.

Meanwhile, Sen. Hillary Rodham Clinton on Friday said reports that she has agreed to serve as secretary of state for Mr. Obama are premature.

“We’re still in discussions, which are very much on track,” said Phillipe Reines, a senior adviser to Mrs. Clinton. “Any reports beyond that are premature.”

Mr. Geithner’s choice was first reported by NBC News’ Andrea Mitchell, who is married to former longtime Federal Reserve Chairman Alan Greenspan and has many sources in the financial world.

Mrs. Mitchell reported the news around 3 p.m., one hour before the closing bell on the New York Stock Exchange, that Mr. Geithner and the rest of Mr. Obama’s economic team will be announced Monday. The indexes had fallen by 50 percent or more from their highs a year ago, and many analysts said they were due for a rally. The leak about Mr. Geithner appeared well-timed to set off a buying frenzy.

The Dow Jones Industrial Average rose 494 points in its final hour of trading, a jump of 6.5 percent, after fluctuating modestly for most of the day and following another week of significant losses amid continued fears of a global recession or depression.

The two other major U.S. indexes, which like the Dow have lost about 50 percent of their value in the past year, also soared during the last hour. The S&P; 500 rose 6.3 percent, and the Nasdaq Composite Index gained 5.1 percent.

Also Friday, first-lady-to-be Michelle Obama made the most important family decision of the transition, announcing that daughters, Malia, 10, and Sasha, 7, will attend the Sidwell Friends School, a private Quaker institution in Northwest Washington that Chelsea Clinton also attended when her father, Bill Clinton, became president.

“A number of great schools were considered. In the end, the Obamas selected the school that was the best fit for what their daughters need right now,” said Katie McCormick Lelyveld, a spokeswoman for Mrs. Obama.

The Obama transition office had confirmed to reporters Thursday that Mrs. Clinton, New York Democrat and former first lady, was “on track” to be named secretary of state after Thanksgiving. But Clinton confidants told the New York Times on Friday that the senator had decided she will take the job.

Though she has not officially accepted, Mrs. Clinton’s decision would mean that Mr. Obama’s main foe during the Democratic presidential primaries season will now be representing him to the rest of the world.

Mr. Obama’s choice of Mr. Geithner was not a total surprise, but former Treasury Secretary Lawrence Summers and former Federal Reserve Chairman Paul Volcker had been thought to be serious contenders for the job as well.

According to Bloomberg News, Mr. Summers will join the Obama White House in some other formal capacity, but will have a wide-ranging portfolio, a major role in developing Mr. Obama’s economic plan, and a possible springboard to succeed Federal Reserve Chairman Ben S. Bernanke as chairman of the Federal Reserve in 2010.

The former Harvard University president will be part of Monday’s announcement, a Democratic aide told Bloomberg News.

Mr. Geithner, 47, is two weeks younger than the president-elect but has served in top Treasury and Federal Reserve positions since the late 1980s. Along with Treasury Secretary Henry M. Paulson Jr. and Mr. Bernanke, he has helped oversee the Bush administration’s effort to contain the crises in the world’s credit and financial markets.

Mr. Obama’s choice for Treasury secretary is one of his most important first decisions. The economy is declining, financial confidence is in tatters, and the Bush administration’s $700 billion rescue plan is barely off the ground.

Mr. Geithner’s familiarity with the details of the crisis, but also with what has transpired in private meetings with Mr. Paulson and Mr. Bernanke, will be invaluable as he takes responsibility for the problem. His lack of a Wall Street background also may prove a point in his favor, given the popular backlash against the financial industry.

The Obama transition office did not deny reports that Gen. Jones, 64, will oversee the National Security Council at the White House when the president-elect takes office.

Gen. Jones is the former commander of U.S. European Command who also served as supreme allied commander of NATO forces from 2003 to 2006. In 2007, he headed a congressional committee that examined the capabilities of Iraq’s security forces.

Susan E. Rice, a former NSC official in the Clinton White House who also served as an undersecretary of state and was seen earlier this week at the White House, had also been mentioned as a possible choice for national security adviser.

The Obama transition office also released a list of other names that will fill White House staff positions:

• Patrick Gaspard, who has worked for the Service Employees International Union over the past few years, will direct the White House Office of Political Affairs.

• Cynthia Hogan, a longtime legal aide to Vice President-elect Joseph R. Biden Jr. in the Senate, will become his legal counsel.

• Jackie Norris, a former scheduler for former Vice President Al Gore, will serve as chief of staff to the first lady.

• Moises (Moe) V. Vela, Jr., a former adviser to Mr. Gore, will oversee administration in Mr. Biden’s office.

Mr. Obama spent his day at transition headquarters in Chicago, where he met with staff and made a call to Attorney General Michael B. Mukasey, wishing him well. Mr. Mukasey fainted while giving a speech in Washington on Thursday evening, and was rushed to a hospital. He was released Friday around noontime.

Mr. Obama’s only public appearance was a midday stop at Manny’s Cafeteria and Deli for lunch.

The president-elect and Valerie Jarrett, a longtime friend and adviser who will follow him to the White House, ordered corned beef sandwiches for themselves and for Rep. Rahm Emanuel, who will serve as White House chief of staff. They also bought two cherry pies.

Mr. Obama paid the $48.34 bill with cash and spent several minutes shaking hands and taking pictures with a swarm of admirers who abandoned their lunches inside the diner to be near him or hug him.

“I love you,” said one person.

“I love you back,” Mr. Obama said.

Mr. Obama also appeared in Istanbul by taped video. He delivered a message to the European Olympic Committee on behalf of Chicago’s bid to host the 2016 Olympics.

“As president-elect, I see the Olympic and Paralympic games as an opportunity for our nation to reach out, welcome the world to our shores, and strengthen our friendships across the globe,” Mr. Obama said in the video.

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