Treasury/Fed: All Goldman Sachs, All the Time，Treasury to take first step in bail-out
by Barry Ritholtz - January 17th, 2009, 6:43am

Yes, another Fed slot is soon to be filled, with another Goldman Sachs alum.

I never bought into the conspiracy that Goldman is taking over the financial world, but the lack of diversity of thought and the risk of groupthink is increasingly becoming a concern . . .

William Dudley, who runs the markets desk at the Federal Reserve Bank of New York, is the likely front-runner to become next president of the bank after another leading candidate for the job, Fed governor Kevin Warsh, withdrew from the race.

New York Fed board members interviewed several candidates for the job last Saturday and have met again this week. Once they make a final choice, the Federal Reserve Board in Washington needs to sign off on the decision, which it is expected to do quickly. The process has been slowed by the uncertain status of outgoing New York Fed president, Timothy Geithner.

Mr. Dudley has helped to design and implement many of the new facilities that the Fed has launched in recent months, giving him an intimate inside knowledge of the changes the institution has gone through and the problems plaguing markets. He is a career economist, who spent a long stint as the chief U.S. economist for Goldman Sachs and who earned a PhD in economics at the University of California at Berkeley.

Source:
New York Fed Nears Pick
JOANN S. LUBLIN and JON HILSENRATH
WSJ, JANUARY 17, 2009

http://online.wsj.com/article/SB123214927903091873.html

Category: Corporate Management, Federal Reserve

Treasury to take first step in bail-out
by

The US Treasury could as early as today take the first big step towards the implementation of its $700bn plan to buy troubled assets from ailing financial companies by outlining the guidelines for the selection of a handful of private asset managers to run the programme.
After securing congressional approval for the rescue plan on Friday afternoon, Hank Paulson, Treasury secretary, vowed to “move rapidly to implement the new authorities, but also methodically” and insisted that “transparency” would be important throughout the process.

Over the weekend, Treasury officials have been working on the release early this week of criteria for the hiring of several large asset management groups that will be charged with managing the portfolio of assets purchased by the government.

Firms interested in the high-profile mandate will be expected to turn round their applications quickly so the Treasury will be in a position to start evaluating the proposals by the end of the week. The Treasury will also be releasing guidelines for the hiring of more than 20 accountants, lawyers and financial advisers to oversee the programme from within the department.

The core of the Treasury plan – a reverse-auction mechanism for the acquisition of the troubled assets from a range of financial institutions – will not be up and running until next month at the earliest.


The Treasury has also been given broad authority to step in and purchase bad assets from individual institutions but US officials yesterday downplayed suggestions that it would quickly move to use these powers in the coming weeks and said the “system-wide and market-based” process embodied in the reverse auction remained the main vehicle for intervention.