Indian-American at centre stage as US markets dive (Lead)October 7th, 2008 - 10:40 am ICT by IANS
Washington, Oct 7 (IANS) As global markets reeled and Dow Jones index plunged below 10,000 for the first time in four years, Neel Kashkari, a 35-year old Indian American, was put at centre stage of US efforts to rescue the economy from a deepening crisis.US Treasury Secretary Henry Paulson Monday named his key aide Kashkari, a former executive at Goldman Sachs, as the interim head for its new Office of Financial Stability, including the Troubled Asset Relief Programme.
Currently the assistant treasury secretary for international economics and development, the son of migrants from Jammu and Kashmir, will manage the centrepiece of the $700 billion financial rescue plan he helped Paulson draft as he negotiated with the Congress.
Kashkari’s appointment came as the Dow Jones Industrial Average, which was off 800 points at its intraday low, ended down 369.88 points, or 3.6 percent at 9955.50, hurt by declines in all 30 of its blue-chip components.
The Dow finished below 10000 for the first time since late October 2004. It has now slid 12.8 percent since the meltdown of Lehman Brothers Holdings threw Wall Street into crisis in mid-September.
“The Man With the $700 Billion Wallet”, as the Wall Street Journal dubbed Kashkari, joined the Treasury Department in July 2006 and worked on several of its initiatives in response to the housing crisis - including the formation of the mortgage industry alliance Hope Now.
Kashkari has a bachelor’s degree in engineering from the University of Illinois at Urbana-Champaign (birthplace of the original Internet browser Mosaic) and went to earn a master’s degree in aerospace engineering to initially take up a career in sciences.
He worked as the R&D Principal Investigator at the company TRW in Redondo Beach, California, where he developed technology for NASA space science missions such as James Webb Space Telescope, the replacement for Hubble, which is scheduled for launch in 2013.
Then leaping from rocket science to the world of finance Kashkari enrolled for an MBA at Wharton School of the University of Pennsylvania. Graduating in 1997, he joined Goldman Sachs in San Francisco, where he led the firm’s IT security investment banking practice.
Moving to New York, he worked closely with then chairman and CEO Henry Paulson, who immediately drafted Kashkari as his senior advisor when he was named Treasury Secretary.
Neel was born in Akron, Ohio, to Chaman and Sheila Kashkari, Indian immigrants originally from J&K, who took the well-trodden academic route to the United States.
Chaman Kashkari, who taught at the University of Akron, is now a retired professor of engineering, and Sheila Kashkari is a pathologist. Neel’s wife Minal works for defence contractor Lockheed Martin.
Meanwhile, the President’s Working Group on Financial Markets, which includes Paulson and Federal Reserve Chairman Ben Bernanke, said it would move “with substantial force on a number of fronts” to implement the expanded authorities granted to the government when Congress passed the emergency rescue package last Friday.
President Bush’s top economic advisers also vowed to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.
In a fresh effort to loosen dangerous credit clogs, the Federal Reserve said it will significantly expand its loan programme to squeezed banks, increasing one programme to as much as $900 billion by the end of this year.
The Fed also said it will begin paying interest on commercial banks’ reserves, another way to expand the Fed’s resources to battle the worst credit crisis in decades.
The statement from the president’s working group laid out a number of initiatives that the Treasury, the Fed and other government regulators including the Federal Deposit Insurance Corp. would be undertaking.