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Bailout or Sellout: 2 - Karrying-the-Kash and some FAQs

By: Santosh :+: Under: Desi Please
On: ⋅ October 7, 2008 ⋅  Email this post ⋅  Print this post ⋅ Post a comment
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The man carrying carrying the cash worth $700 billion is former Goldman’s employee and Paulson-protege, ………………… [WSJ Blogs] (tip Sidhu and Runa via email)

Both are former Goldman Sachs bankers, though Kashkari, at 35 years old, is much younger and was just a vice president-level banker in Goldman’s San Francisco technology banking effort when Paulson tapped him to join Treasury.

rocket scientist, …………..

Kashkari didn’t take a conventional route into banking. He started out as an aerospace engineer at TRW, developing technology for NASA projects like the James Webb Space Telescope, the replacement to Hubble, which is scheduled to launch in 2013.

…………….. Indian-American, Neel Kashkari, whose last name coincidentally pronounced in a heartland American accent would say “Cash Carry”. Neel also had an MBA from Wharton and, surprise, a stint in Silicon Valley.

As you can see Neel is a true protege of Paulson down to the chrome domes.

Emperor Paulson and Darth Kashkari
img: via WSJ blogs

Neel’s appointment is by no terms a long-term one considering the fact that the current Bush administration whom Paulson is a part of is only in office till January but Neel has the enviable (or unenvible, depending on your perspective) task of distributing some of the $700 billion “Kash”.

As The Wall Street Journal’s Deborah Solomon reported today, Treasury Secretary Hank Paulson is promoting Neel Kashkari, the Treasury’s assistant secretary for international affairs, to be the point man overseeing the $700 billion financial bailout as the interim head of Paulson’s Office of Financial Stability. The full appointment would need Senate confirmation, which is unlikely to come given the short remaining tenure in this Administration.

Irrespective of how this plays out, Neel is currently holding the reins to the world’s largest economy in the middle of the perhaps one of the biggest financial crisis of our times. No pressure there, Neel.

As for the money Neel will be handling, the New York Times has an informative FAQ on the bailout plan. [NYT]

Here’s a quick summary:
- The total sum of this bailout plan could be close to a whopping $1 trillion dollars

$700 billion is in addition to an $85 billion agreement on a bailout of the insurance giant American International Group, plus $29 billion in support that the government pledged in the marriage of Bear Stearns and JPMorgan Chase. On top of all that, the Congressional Budget Office says the federal bailout of the mortgage finance companies Fannie Mae and Freddie Mac could cost $25 billion.

-You, the taxpayer (if you’re one) will foot this $1 trillion bill

So it would not be correct to think of the federal government as simply writing a check for $700 billion. It is just committing itself to spend that much, if necessary. But the bottom line is, yes, this bailout could cost American taxpayers a lot of money.

For more revelations like these, read the [NYT FAQ]

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