Wednesday, November 11, 2015


Little Paulie Krugman had a kitten today.  Read his, don't waste your time, I'll tell about what he's mad.

It seems that the Minneapolis Fed needed a new President and they selected Neel T. Kashkari to fill the roll.You remember Kashkari; he was the whiz kid in the Treasury who oversaw the TARP program in both the Bush and Obama administrations before moving on to other adventures at PIMCO and in the governor's race for the State of California...which he lost.  By all reports he is one hell of a bright young guy (42) and extremely capable.  Unfortunately, he is a heretic from Little Paulie's standpoint; he is a guy who actually spoke out against QE II as being worthless and at one point told the Japanese that QE was like morphine--it makes you feel good but cures nothing.  (As an aside, Germany's Group of Economic Advisers--the "Wise Men--absolutely blasted the concept of another round of QE today).  On top of all that he's not an economist but an engineer with a masters degree fro the University of Illinois which means he probably has a practical approach to things unlike Paulie who can't spell practical.  Engineers build things that tend to fall down if built incorrectly; Paulie postulates and moves on.  Paulie perceives a threat.  Paulie throws a fit.  Paulie is having a really bad day between Midwest engineers and German Economists.  It's such fun to watch.

But...and there always seems to be a but in these things these addition to the U of I and PIMCO, Mr. Kashkari carries on his resume a stint at Goldman Sachs as a vice president in the San Francisco office.  Now a V.P. at Goldie is generally just another smart guy making a couple of million dollars a year who is really not in a position to do any real harm. So why the "But?'

In the past six months Mr. Kashkari is the third refugee from Goldman Sachs to be appointed the Head of a Regional Federal Reserve Bank; Patrick Harker in Philadelphia and Bob Kaplan at Dallas.  We of course have Billy the Dud in New York and a few other alumni on the Big Board as well.  We have talked about the reputational difficulties facing the Fed in the eyes of the public and especially in the eyes of Congress.  We have talked of the decline in stature among global central banks which the Fed is suffering and we all know that there is probably one financial institution in the world about whom if one expresses distrust, dislike or even hatred, it is Goldman Sachs. Envy plays a roll, but it is more than envy and some of it--or a good deal of it perhaps--is with justification.  It is therefore really quite stupid to allow this sort of inbreeding to occur in an institution of such importance and I must question the leadership that allows this to happen.  Trust can be lost in many ways and once lost it is difficult for it to be regained.  These guys are around for a long time...and so will be the questions.  What a shame and what a blow I am afraid to the institution's global leadership.

Went to the Eye Guy today and was told I need a laser tune-up tomorrow in one eye and another next week.  I'm out of action probably until Monday.  This is getting to be a pain.

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