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As Sigmund Freud famously said, “Sometimes a cigar is a just cigar.” Indeed. And sometimes an investment bank is just an investment bank. In this case, sometimes the Secretary of the Treasury is just an investment banker.

We have major issues with Secretary Paulson, the former CEO of investment banking firm Goldman Sachs, appointing Goldman alum, Neel T. Kashari, to head the $700BN bailout effort. We had previously suggested that former Federal Reserve Chairman Volcker would be the ideal person for this role, but Paulson clearly has a different view of the importance of this function and by inserting a “Yes man”, he is indicating to the market that this role is of little importance or value.

Paulson’s new “Yes man”, Neel T. Kashari, is likely a good guy and no doubt smart, but is he qualified to lead the $700 billion bailout of the U.S. financial system? He has a total of six years experience in business and government. His four years of experience in business were in San Francisco where he worked as a junior investment banker for technology companies. According to the New York Times this morning, Bradford Koenig, who ran Goldman’s technology bank group while Kashari was employed there, said, “they had relatively little contact because Mr. Kashkari was a junior banker.”

We have no doubt Kashari’s powerpoint and excel skills are second to none after four years preparing presentations for the senior bankers at Goldman, but we are not sure how that translates into the experience and management skills that will be required to lead this bailout. If Hank needs qualified candidates, we would recommend that he contact our good friend Hank Higdon over at Higdon Partners, one of the top executive search firms in the world. Mr. Higdon was also a standout Ivy League Football player and is man who can find the right person for a job.

As for our new nickname for Secretary Paulson, “Hank the Tank”, it actually has nothing to do with his football prowess at Dartmouth. This new moniker is actually based on the reaction from the market whenever he speaks publicly. As we outline in our intraday chart from yesterday pasted below, it tanks.

Tomorrow at 6:45pm eastern “Hank the Tank” will speaking on the global credit crisis. Thankfully, the market will be closed on Saturday morning.

Daryl G. Jones
Managing Director