Kashkari hasn't missed a beat. He might be chopping wood and reading Thoreau in the mountains near Tahoe, but his Wall Street bailout sales pitch hasn't lost any shine. The fear-mongering is never far from the surface. More vague allusion to super-galactic devastation and destruction that was avoided through righteous and swift Treasury action.
I just puked. Kashkari is the embodiment of Washington political capture.
Among the insights shared:
Comment: throwing trillions of borrowed money at every leaky financial faucet is an excellent fail-safe plan, unless of course you're around when the bill is due. And just to make sure there aren't any further problems, put extreme pressure on FASB to change the accounting rules to encourage fantasy mark-ups. Then create a taxpayer-funded program, PPIP, to buy toxic assets at inflated prices, which will allow even more mis-marking of asset values on bank balance sheets, as 'the market' is deemed to have spoken with a new, higher price.
Give me a freaking break. There was a right way to stabilize the system last Fall and an irresponsible way: where incentives wouldn't change, new regulation would be forgotten, and the guilty would remain in power.
The responsible path would also have included fair taxpayer terms for all components of a rescue given to any financial institution --this means compensation for FDIC debt guarantees, AIG back-door payments, and Federal Reserve asset dumping of unknown proportion (collateral swaps with the Fed where junk is left and Treasuries are received in exchange (HR 1207, we would like passage please, and soon.).
In the case of Goldman Sachs (GS), and it wasn't just Goldman, there were also scores of European Banks who exploited regulatory construct (they broke the law) and used AIG to insure their way out of capital requirements -- yet like Goldman they were paid at par for their contracts, (Lehman counterparties got 11 cents and Chrysler's got 29 cents for comparison), and they were not asked to surrender any shares to the government in exchange. No matter how you dice it, that's a lousy deal for someone, and just so happens that someone does not work on Wall Street.
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Video Interview: Neel Kashkari with CNBC's John Harwood Broadcast October 20, (7:22).
Former TARP chief Neel Kashkari discusses the government program and whether he believes it's been a success, with CNBC's John Harwood (20:08).