Herb Allison, whom the Bush administration installed as the head of Fannie Mae in September, is now expected to be tapped to replace Neel Kashkari as the head of the Troubled Asset Relief Program, the Journal reported this morning. This seems like a smart choice. Although skeptics will doubtless have bones to pick with the specifics of Allison's career, the man, at the very least, knows a lot more about bailouts than 35-year-old Kashkari. Ten years ago, when he was president of Merrill Lynch, Allison was the primary architect behind the bailout of hedge fund Long-Term Capital Management. In his book about the hedge fund's collapse, Roger Lowenstein describes him thus:

"Allison, a fifty-five-year-old investment banker, was a rarity among top executives at Merrill, most of whom had been plucked from the firm's legions of stockbrokers. The prototypical Merrill man was Komansky, a personable, heavyset former broker who had never gotten a college diploma but had started in sales. Allison, a philosophy major at Yale with an MBA from Stanford, was far more bookish. Wispy, balding, and bespectacled, he was more a detail man than a rainmaker and — despite his ambition — a consummate number two. Undeniably smart, he had a talent for deconstructing a deal and fitting the parts into working order."

Seems Allison proved him wrong about him not being a No. 1 type. Let's just hope he was right about the smart, detail-oriented stuff.

Bank Vet Pegged to Run Bailout [WSJ]