Thursday, October 16, 2008

David Weidner Asks The Big Questions And Makes The Key Points

David Weidner writes:

If [Neel] Kashkari [formerly of Goldman Sachs] is on the job, does anyone think Treasury will be driving a hard bargain with Goldman on its mortgage assets? And while we're on the subject of Goldman, under what criteria did Goldman and Morgan Stanley qualify as two of the nation's nine strongest financial institutions? Just wondering...

It's no wonder that the world is scratching its head. Congress approved a bailout of bad assets and the Treasury Department has used it to buy stakes in preferred banks. Some of those banks, J.P. Morgan Chase & Co. and Bank of New York Mellon, look to be in decent shape. Others, such as Morgan Stanley and Goldman are highly leveraged firms that, regardless of what kind of charters they hold, are not too far from hedge funds... many investors and citizens, Neel Kashkari is just another Wall Street insider who has close ties to the Treasury chief. Kashkari joins Paulson, Josh Bolton, Steve Shafran, Ken Wilson, Dan Jester as former Goldman bankers who now saturate the administration's team handling the crisis...

Kashkari came from humble beginnings, but he studied hard. You can guess the rest of the resume: Wharton Business School, homes on both coasts, he met Paulson and got his job by knowing the right people. He stayed up all night working on the bailout proposal even though the document, at a total of three pages, was politically inept and borderline unconstitutional.... In short, he's really part of the elite that brought you The Biggest Financial Crisis Since The Great Depression.

No comments:

Post a Comment