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Geithner better for investors than Rubin, but lags Paulson

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U.S. Treasury Secretary Timothy Geithner testifies before the Senate Budget Committee.

By msnbc.com staff

Treasury Secretary Timothy F. Geithner has done a better job for bond investors than his predecessor Robert Rubin, but not as well as the previous head of the Treasury Department Henry Paulson, according to an analysis by Bloomberg News.

Geithner took over at Treasury during the worst financial crisis since the Great Depression, and under his watch the nation has lost its AAA credit rating and seen its public debt almost double, rising from $5.75 trillion to $10 trillion.

Still, since Geithner assumed his office, in January 2009, returns on Treasuries have exceeded the bonds of other countries by 0.3 percentage point on an annualized rate, Bloomberg said, citing Bank of America Merrill Lynch index data. That return is less than Paulson’s 7.5 percentage points, but better than Rubin’s record. Under his leadership Treasuries lagged behind foreign issues by 1.6 points, Bloomberg said.

Geithner said recently he will not be asked to remain in his post if President Barack Obama wins this November’s election.

Geithner’s Treasury has kept bond yields near record lows and has held demand for government securities at all-time highs.

Geithner’s lengthening of the average maturity of U.S. debt to 62.8 months, the longest since 2002 under former Treasury Secretary Paul O’Neill, may shore up credit quality and depress yields amid contained inflation, according to the Bloomberg report.