The $600bn man

Josh Frost.pngIn October 2008, the blog featured the US Treasury official responsible for running the $700bn TARP rescue fund. He was 35 years old, and just 6 years out of business school.
Apparently there was nobody available with more experience to take on the role of “choosing which US financial institutions live, and which die“, during the financial Crisis.
Now, the same policymakers are making the same mistake again.
According to the New York Times, the senior trader responsible for the US Fed’s new QE2 $600bn Lifeboat programme is just 34 years old, and supported by 3 junior traders who are only 26 and 29 years old.
He is apparently in charge because his boss, who runs the Fed’s markets group, once wrote an academic paper on the subject with current Fed Chairman Ben Bernanke. This supposedly qualifies him to trade on equal terms with Goldman Sachs and the other 17 primary dealers. But the blog rather doubts they will be putting similarly inexperienced traders on the job.
This further example of the Fed’s naivety when dealing with Wall Street may, therefore, be at least part of the reason why US interest rates have risen, not fallen, since it began the QE2 programme in November.

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