What would you prefer they do, help the badly run banks?
This is what you do in a banking crisis and it is what J.P. Morgan did to stop the 1907 panic. You figure out which banks can survive and you help them and you figure out which ones are beyond saving and you put them to sleep.
MEET THE ENEMY: NEEL KASHKARI: BORG BASTARD AND PAULSON’S ERRAND BOY
October 10, 2008, 9:34 am
Neel Kashkari: A Portrait of the $700 Billion Man as a Young Banker
Posted by Heidi N. Moore
Who is Neel Kashkari?
Well get to that in a second. Here is who he is not: Neel Kashkari is not a wunderkind. Hes not an evil genius. Hes not a mastermind.
Kashkari, the 35-year-old interim head of the Office of Financial Stability, has been the source of great worry. Many fear hes too young and too inexperienced to handle the task of rebuilding the nations financial system.
Getty Images
Of course, Kashkari may just have the job for a few months. Paulson made clear he will appoint somebody and try to get the new person confirmed in November, and that person would transition into the next administration.
Forty-five days isnt a long period in normal times, but in this crisis its an age. To get a better understanding of him, Deal Journal spoke to people who knew Kashkari well in his childhood and during his time at Goldman Sachs to find out the character and working style of the man who is managing the nations bailout.
Heres the portrait that emerged: Kashkari is smart, dutiful, detail-oriented, and takes orders well. In the parlance of investment banking, he is a good execution guy: He leaves strategy to the bigwigs. But if you give him a project, he will prioritize, delegate and finish it.
These people report he has an amiable manner and is a good, intent listener. He doesnt make waves and never dominates a discussion; he thinks before he speaks and he lets people express themselves. He is particularly good at presenting complicated ideas and leading team projects that depend on gaining cooperation from others. Those include the Sunrayce project to build a solar car as well as his work on the space telescope. Neel is just plain good, with a high standard of ethics, said Dr. Surinder Bhardwaj, a Hindu community priest who is a close family friend to the Kashkaris in Ohio. This is a responsibility that requires the interest of the nation as a whole, and requires a very strong base of morality, which he has.
Kashkari comes from a small, tight-knit community of Indian Hindus in Ohio, where his parents had a high profile in the local community. His mother, a pathologist, was known as a community resource. Shes a good listener and helps guide people out of stressful situations, said Dr. Bhardwaj. They are very compassionate people, his parents, and maybe thats where hes getting his value system from. Kashkaris father is a retired engineer with a bent to public service, particularly in West Africa, where he spearheaded efforts to bring electricity and clean water to poor villages. Kashkari met his wife, Minal, in college at the University of Illinois Urbana-Champaign. They were married in a traditional Indian ceremony in Chicago where participants remember the bride being carried in on a festive palanquin and Kashkari, busy even then, taking the time to put each guest at ease.
Kashkari first worked at Goldman Sachs during the summer between his two years at Wharton, and impressed well enough to get a full time job after graduation. Academically, Kashkari was not outstanding, said a person familiar with the matter, but he appealed to Goldmans recruiters because, as a former engineer, he was different than the usual aspiring investment banker. Kashkaris head shaved bald even then also differentiated him from the reigning Goldman aesthetic, sometimes mockingly referred to as The Borg by rivals. Everyone at Goldman has a full head of hair and went to prep school and Dartmouth and played lacrosse. Thats not Neel, said an investment banker who knew him.
Goldmans investment bankers were most impressed by Kashkaris science background. His experience working on the James Webb Space Telescope for NASA contractor TRW gave him a comfort with technological jargon that would help Kashkari communicate with technology-company executives. Kashkari also spoke passionately of his entry in a car competition, the 1997 Sunrayce event in which Kashkaris team built and raced a solar-powered car. His team didnt win, but it did earn kudos. While other bankers at Goldman would often discuss their project du jour or details of a presentation even in their off-time, Kashkari often discussed cars and the Sunrayce experience.
When Kashkari returned to Goldman Sachs after business school, he worked with senior bankers advising companies in the software sector. As a junior banker, he did not have many responsibilities of his own; it was his job to prioritize and execute on the tasks given to him by others. (In many ways, that has also been Kashkaris job at Treasury, where the strategy has been set by Hank Paulson.)
Kashkari did well enough that his bosses gave him an obscure sector to research and cover : information technology software, which included antivirus-program makers. The sector included many tiny companies that rarely hired or needed investment bankers, and Goldman Sachs did not have meaningful relationships with the leading companies. Kashkari impressed colleagues with his technical skill. Much of his job, however, was building relationships, a task that, in the world of investment banking, takes years. Although a few mergers and financings emerged from his work, many were not publicly disclosed because of their small size.
After Kashkari had spent only a couple of years covering IT software, the head of Goldman Sachss technology group, George Lee, recommended him to Paulson, who had then moved to Treasury.
I never thought Id see him in government, said one banker who knew him. He enjoyed being a banker and the respect that was conferred on him as being a Goldman banker.
The rest, as they say, is history.
Sounds bad to me. Like they are giving up on the weaker banks and just trying to save a few of the stronger banks.