Janet Tavakoli Retracts Her Apology To Goldman Sachs, Calls For More Regulation Of The Government Backstopped Hedge Fund

Submitted by Janet Tavakoli of Tavakoli Structured Finance

I Retract My Apology and Call for More Regulation of Goldman Sachs

TSF – Opinion Commentary – November 22, 2009 (see also Apology)

According to SIGTARP¹, both the Federal Reserve and Treasury agreed that an AIG failure posed unacceptable risk to the global financial system and the U.S. economy. On March 24, 2009, Fed Chairman Ben Bernanke testified before the House Financial Services Committee [P.9]:

[C]onceivably, its failure could have resulted in a 1930’s-style global financial and economic meltdown, with catastrophic implication[s].

From July 2007, AIG’s financial situation deteriorated while so-called “AAA” collateralized debt obligations (CDOs) dropped in value. AIG sold credit default swaps (CDSs) on these CDOs and had to post more collateral, as the prices plummeted.

Goldman Sachs was AIGFP’s (UK-based AIG Financial Products) largest CDS counterparty with around $22.1 billion, or about one-third of the problematic trades. Goldman underwrote some of the CDOs underlying its own CDSs, and also underwrote a large portion of the CDOs against which French banks SocGen, Calyon, Bank of Montreal, and Wachovia bought CDS protection. Goldman provided pricing on these CDOs to SocGen and Calyon. Goldman was a key contributor to AIG’s liquidity strain and the resulting systemic risk. (See “Goldman’s Undisclosed Role in AIG’s Distress”)

Apocalypse AIG

By mid September 2008, AIG’s long-term credit rating was downgraded, its stock price plummeted, and AIG couldn’t meet its borrowing needs in the short-term credit markets. According to SIGTARP, “without outside intervention, the company faced bankruptcy, as it simply did not have the cash that was required to provide to AIGFP’s counterparties as collateral.” [P.9] The Federal Reserve Board with Treasury’s encouragement authorized a bailout. ²

The Federal Reserve Bank of New York (FRBNY) extended an $85 billion revolving credit facility, so AIG could make its collateral payments to Goldman and some of its CDO buyers. AIG also met other obligations, such as payments under its securities lending programs owed to Goldman and some of its CDO buyers. (See also: “AIG Discloses Counterparties to CDS, GIA, and Securities Lending Transactions.”)

Goldman “Would Have Realized a Loss”

Fed Chairman Bernanke said AIG’s crisis put the world at risk for a global financial meltdown. Goldman purchased little credit default protection3 against an AIG collapse. Even if Goldman escaped a collateral clawback of the billions it held from AIG4, the underlying CDOs posed substantial market value risk (SIGTARP P. 17). As for systemic risk, Goldman CEO Lloyd Blankfein worried about untold billions in losses. (Too Big to Fail, P. 382.)

On September 16, 2008, as the FRBNY arranged AIG’s $85 billion credit line, Goldman CFO David Viniar said whatever the outcome, he would expect the direct impact of credit exposure to be “immaterial to [Goldman’s] results.” The CDOs’ ($22.1 billion) value was down around $10 billion, and AIG still owed Goldman $2.5 billion in collateral (hedged and partly collateralized by CDSs on AIG). SIGTARP shows the CDOs’ value fell another $2.5 billion in two months, and AIG’s new credit line provided more collateral. The CDOs were losing market value. If AIG had collapsed, the value drop would have been swift and brutal with new protection either unavailable or too expensive, if past CDS market mayhem provided any information. As the Wall Street Journal put it, SIGTARP “throws cold water on [Goldman’s] claim.”

Before September 16, 2008, AIG tried to negotiate a settlement for forty cents on the dollar. Other insurers have negotiated even deeper discounts to settle their CDS contracts on CDOs. The SIGTARP report shows that the FRBNY’s decision to pay 100 cents on the dollar to resolve $13.9 billion (part of Goldman’s $22.1 billion) of credit default swaps by purchasing the underlying CDOs in Maiden Lane III was important to Goldman Sachs. “Goldman Sachs…did not agree to concessions, because it would have realized a loss if it had.” [P.16]

Treasury Secretary Timothy Geithner, then President of FRBNY, is revealed in this New York Times article with apparent Stockholm syndrome rivaled only by Patty Hearst. He seems to echo Goldman’s talking points after discussions with Goldman’s CFO. In the fall of 2008, Henry (“Hank”) Paulson was Treasury Secretary. Paulson was formerly CEO of Goldman Sachs and held that role when Goldman executed its trades with AIG. Stephen Friedman, a former Goldman Sachs co-chairman, was Chairman of FRBNY. Friedman owned shares of Goldman Sachs, and was a member of Goldman’s board, while he held his influential Fed position. He resigned the Fed position in May 2009, but not before purchasing 50,000 shares of Goldman Sachs, when the public was still in the dark about the terms of the bailout.

Goldman’s Turn to Apologize

In light of the SIGTARP report, I withdraw my earlier apology to Goldman. Public commitments to AIG are currently around $182 billion. If you wonder what Goldman CEO Lloyd Blankfein meant when he said: “[Goldman Sachs] participated in things that were clearly wrong and we have reason to regret and we apologize for them,” think of Goldman’s role in AIG’s crisis, Goldman’s bailout, and Goldman’s ongoing heavy taxpayer subsidies. That way, one of you will be genuinely sorry about it.

---

1 The November 17, 2009 report of the Office of the Special Inspector General for the Troubled Asset Relief Programs, “Factors Affecting Efforts to Limit Payments to AIG Counterparties.” The report does not address the risk of collateral clawbacks by authorities on behalf of AIG or the public, and it does not address the relative size of Goldman’s CDS positions and CDO underwriting activity related to AIG’s CDSs mentioned in the above commentary.

2 Fed and Treasury officials thought AIG’s derivatives were “more risky and unbalanced than Lehman’s.” They were concerned about loss of confidence in AIG’s subsidiaries, AIG’s failure to perform on annuities and wraps, losses to state and local governments, global banks and investment banks, losses to 401k plans, and the credit markets. The Reserve Primary Fund had fallen below $1.00 per share after it wrote off Lehman’s debt causing a run on the fund, and officials worried about an AIG failure causing further “breaking-of-the-buck.” (P. 10)

3 SIGTARP says Goldman would have trouble collecting on the credit default protection it bought to protect against an AIG collapse—which by deduction seems to only be around $2.5 billion. It is usual to have mark-to-market collateral, but it is unlikely this position was 100% collateralized. In November 2008, it seems $1.2 billion of this hedge was allocated for Maiden Lane III assets and $1.1 billion to another $8.2 billion position leaving an apparent slight excess notional amount. But even if it were 100% collateralized, that seeming advantage could quickly disappear in a volatile market when pricing discounted illiquid assets that lack transparency. [P. 16, 17]

4 According to SIGTARP, private participants felt AIG’s financial condition was so tenuous that on September 15, they refused to fund AIG making the Fed’s bailout necessary. Their analysis showed AIG’s liquidity needs exceeded the value of the company’s assets. [P.8] Goldman’s status in the event of an AIG collapse would have been that of a credit default swap counterparty during a global crisis with very special circumstances. Goldman thought it would get to keep the billions in dollars it received from AIG, if AIG collapsed. That would normally be the case, but these would have been extraordinary circumstances inflamed by value-destroying CDOs over which Goldman had pricing power, and Goldman had underwritten some of the CDOs. Authorities charged with resolving a collapse of AIG may have clawed back a substantial portion of the collateral.

***

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based consulting firm to financial institutions and institutional investors. She is the author of a book on the cause global financial meltdown: Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (Wiley, 2009), Structured Finance & Collateralized Debt Obligations (Wiley 2003, 2008), and Credit Derivatives & Synthetic Structures (Wiley 1999 and 2001).

Comments

[Missing_Link]

/applause

[Jim B]

+22.1 billion

What corruption?

[Rainman]

The greatest conspiratorial fleecing of the American taxpayer EVER. And that's saying something !!

A Pecora-type Commission would take years unwinding the lies, frauds and counter-frauds. A tangled web of deceit like this cannot be allowed to stand uninvestigated in what's left of our " FREE REPUBLIC ".

[mberry8870]

Ever? I think not. Not bad though.

[Hephasteus]

A god's righteousness usually involves nothing more than creating the necessary deceptions to make you wrong.

[D.O.D.]

LOL! +100!

[Mark Beck]

AIGs un-pricable CDOs backed by unregulated CDSs = look ma no reserves needed = very high insolvency risk.

AIG should have been reorganized in bankruptcy, with debtor-in-possession funding from the Government (as a last resort) to temporally keep operations going until it could be split up and wound down. Obviously, this would have made a lot of counter parties very unhappy.

[Anonymous]

Class action lawsuit against New York Federal Reserve and Goldman Sachs on behalf of all tax payers. Seek punitive damages on top of reclaiming bail out funds.

[Anonymous]

Read Between the Jewish Lines
04 Feb 2009 at 5:26 AM

Increasingly nervous economic Jew Robert Reich writes – with me filling in what he is really thinking when he speaks of “populism”…

Typical [non-Jewish] Americans are hurting very badly right now. They resent [the Jewish] people who appear to be living high off a [Jew-corrupted] system dominated by [Jewish] insiders with the right [Jewish] connections. They [non-Jews] have become increasingly suspicious of the [Jewish] conflicts of interest, cozy [Jewish] relationships, and [Jewish] payoffs that seem to pervade not only official [Jewish] Washington but our biggest [Jewish] banks and [Jewish] corporations. In short, many [non-Jewish] Americans who have worked hard, saved as much as they can, bought a home, obeyed the law, and paid every cent of taxes that were due [to the Jewish-dominated IRS and FED] are beginning to feel like chumps. Their jobs are disappearing, their savings are disappearing, their homes are worth far less than they thought they were, their [Jewish levied] tax bills are as high as ever if not higher.

Meanwhile, [the Jewish] people at the top seem to be living far different lives in a different [Jewish only] universe. They’re the [Jewish] executives and [Jewish] traders on Wall Street who have lived like [Jewish] kings for years off a [Jewish] bubble of their own [Jewish] making while ripping off small [non-Jewish] investors, the [Jewish] financial louts who are now taking hundreds of billions of taxpayer [i.e., non-Jewish] bailout money while awarding themselves huge [Jewish-only] bonuses and throwing lavish [Jewish only] parties, the corporate [Jewish] CEOs who are earning seven figures while laying off thousands of [non-Jewish] workers, the [Jewish] billionaire hedge-fund and [Jewish] private-equity managers who are paying a marginal tax rate of 15 percent on what they say are capital gains while [non-Jewish] people who earn a fraction of that are paying a higher rate, and, not the least, the [Jewish] Washington insiders who have served on the Hill or in an administration and then gone on to pocket millions as [Jewish] lobbyists for the same [Jewish] companies they once regulated or subsidized. To the [non-Jewish] American who’s outside the [Jewish] power centers—the places of [Jewish] entitlement and I’ll-scratch-your-[Jewish]-back-while-you-scratch-mine [Jewish] deal making—the entire [Jewish] system seems rotten.

- http://robertreich.blogspot.com/2009/02 ... evolt.html

[Anonymous]

Read Between the Raciest Lines
04 Feb 2009 at 5:26 AM
Increasingly nervous economic Raciest Robert Reich writes – with me filling in what he is really thinking when he speaks of “populism”…
Typical [non-Raciest] Americans are hurting very badly right now. They resent [the Raciest] people who appear to be living high off a [Raciest -corrupted] system dominated by [Raciest] insiders with the right [Raciest] connections. They [non- Raciest] have become increasingly suspicious of the [Raciest] conflicts of interest, cozy [Raciest] relationships, and [Raciest] payoffs that seem to pervade not only official [Raciest] Washington but our biggest [Raciest] banks and [Raciest] corporations. In short, many [non- Raciest] Americans who have worked hard, saved as much as they can, bought a home, obeyed the law, and paid every cent of taxes that were due [to the Raciest -dominated IRS and FED] are beginning to feel like chumps. Their jobs are disappearing, their savings are disappearing, their homes are worth far less than they thought they were, their [Raciest levied] tax bills are as high as ever if not higher.
Meanwhile, [the Raciest] people at the top seem to be living far different lives in a different [Raciest only] universe. They’re the [Raciest] executives and [Raciest] traders on Wall Street who have lived like [Raciest] kings for years off a [Raciest] bubble of their own [Raciest] making while ripping off small [non- Raciest] investors, the [Raciest] financial louts who are now taking hundreds of billions of taxpayer [i.e., non- Raciest] bailout money while awarding themselves huge [Raciest -only] bonuses and throwing lavish [Raciest only] parties, the corporate [Raciest] CEOs who are earning seven figures while laying off thousands of [non- Raciest] workers, the [Raciest] billionaire hedge-fund and [Raciest] private-equity managers who are paying a marginal tax rate of 15 percent on what they say are capital gains while [non- Raciest] people who earn a fraction of that are paying a higher rate, and, not the least, the [Raciest] Washington insiders who have served on the Hill or in an administration and then gone on to pocket millions as [Raciest] lobbyists for the same [Raciest] companies they once regulated or subsidized. To the [non-Jewish] American who’s outside the [Jewish] power centers—the places of [Raciest] entitlement and I’ll-scratch-your-[ Raciest]-back-while-you-scratch-mine [Raciest] deal making—the entire [Raciest] system seems rotten.
- http://robertreich.blogspot.com/2009/02 ... evolt.html

[Cistercian]

 Classic.I have been waiting for this!

[knukles]

Such apparent or alleged misappropriation of taxpayer monies is likely of historically monumental proportions, so why one asks has there been no investigation of such initiated by Congress?  A few hearty solid souls there could well make names for themselves in the political arena, playing on populist anger and ammending wrongs.  The lack of action might logically lead one to somehow ask if there is a conflict of interest amongst Washington and the Financila community. 

And what might that conflict then be?  Ones imagination runs wild speculating on such.  A wonderful fictional plot that could be made into a smash movie at this time might include a big investment bank as politicians bag man and sundry off shore accounts, eh?  Deep mystery, action, intrigue, ending with a heroic, noble rectification of wrongs, purging of dubious characters. 

[lizzy36]

hmmm in the absence of Megan Fox, Vampires and 2012 special effects, one wonders what American would actually see this movie. 

The populist movement in the US, seems to be coagulating around Sarah Palin.  I seriously doubt she could tell you where Geithner worked before he became Treasury Secretary, let alone explain the conflicts of interest involved in the decision to bail out AIG's couterparties, at 100 cents on the dollar, last fall (frankly i am not sure she could define counterparty in this context). 

[Anonymous]

It's not just SP, even look at the "liberal" University of Ca student protest over 32% student fee hikes. It's not that hard for the students to connect that we bailed out GS while leaving so many other groups out in the cold. 2010 will be the year of the populist for the left right and center. GS will hang us all no matter our political affiliation.

Side note, i think the administration is trying to get HCR passed before the dogs are let loose on the banks. The Pres has always alluded to HCR being his top legacy priority. After that, it seems like we are set up for more populist rhetoric against wall st. Besides, he was supposed to be a social justice president, and not a financial savior president. I think populist rhetoric against the bank is his only play to save the democrats in 2010, or else.....lots of red will be splattered on a lot of that blue area of the country. Seems like something big is going to happen march or may in 2010.

[SWRichmond]

The republican party has deliberately pushed Palin out so that she can be the "coagulator" of the resistance, thus keeping the revolution within the walls of the prison.  Many suspect Beck et al in a similar vein.  Embrace, extend and extinguish.  I am not fooled.

[delacroix]

ending in executions for treason

[RockyRacoon]

You mean after a fair trial, of course!  Just keeping you on Marla's good side:

The Fifth Rule Of Zero Hedge Is...

[Hephasteus]

But then how's he going to learn anything?

[RockyRacoon]

You're right.  I gotta give up this codependent life-style.  It wears me out.

[Anonymous]

C'mon, cut Blankfiend some slack; he's just doing the Big Boss' work.

This is the Boss' very own memo:

"Then it shall come about when the LORD your God brings you into the land which He swore to your fathers, Abraham, Isaac and Jacob, to give you, great and splendid cities which you did not build,and houses full of all good things which you did not fill, and hewn cisterns which you did not dig, vineyards and olive trees which you did not plant, and you eat and are satisfied,then watch yourself, that you do not forget the LORD who brought you from the land of Egypt, out of the house of slavery." (deuteronomy 6:10-12)

[GoldmanSux]

In God we Trust

[dot_bust]

"Fed Chairman Bernanke said AIG’s crisis put the world at risk for a global financial meltdown."

Translation: The rich would have lost money. That's what they mean when they say "systemic risk." They're talking about the system that belongs to the rich, not to the middle class and the poor. 

[Problem Is]

Dot_bust can you please take your anal rape with dignity and just sob in the corner...

[Ned Zeppelin]

Exactly - what I have been saying since October 2008.  "Systemic risk" is code for "losses by the oligarchal rich."

[Anonymous]

ZH, somebody fed your site's IP to Kaspersky's Internet Security databank of fishing/attack threats.

After prompting some nasty warning, Kaspersky filters all googleads routed through ZH. Somebody seems to want to reduce your ad revenues.

The experience I had with Kaspersky before is that an email can solve the issue.

Having said that, kudos for the best financial blog/news aggregator in English. More power to your team, ZH.

[Miyagi_san]

That chick is HOT...Meridith NOT

[Careless Whisper]

"I Retract My Apology and Call for More Regulation Of Goldman Sachs."

Your apology was weak and your retraction is pathetic. You should be calling for a break up of Goldie not more regulation. 

[Daedal]

+1

It has been painfully obvious for some time now the extent to which GS and our Government are in cahoots. At this point, new details serve to support the revelations we already know.

Hey Blankfein, after you're done taking my material possessions to line your pockets under the guise of saving me from myself, will you donate some of my (soon to be your) assets toward education on ethical behavior? Thanks, bud!

[Anonymous]

A Pecora-type Commission would take years unwinding the lies, frauds and counter-frauds. A tangled web of deceit like this cannot be allowed to stand uninvestigated in what's left of our " FREE REPUBLIC ".

Yes it is a "free Republic" free for the bankers to loot and the rest of the people are free to pay the bill of horrendous taxes for 3 or 4 generations if the debits can be ever paid.
"trickel down economy" right the only thing that trickels down is the corruption into state and local goverment and the regulatory bodies that were to keep the game honest what price a congressman or a judge now how much is the fee to avoid being tasored for a cops musment

[Fish Gone Bad]

+10 Tavakoli does her homework, and then some.

[waterdog]

There is going to be one hell of a bar-b-que in 2010.

[Ned Zeppelin]

She owed no apology to begin with, and I had assumed she was threatened with litigation. Story about SIGTARP appeared again yesterday in the New York Times.

http://www.nytimes.com/2009/11/22/business/22gret.html?_r=1&ref=business

and don't miss this - required reading

http://www.nytimes.com/2009/11/22/business/22gretside.html Goldman's misleading non-response.

I'll stop complaining as soon as Geithner is gone and prosecuted for this, same for Hank Paulson, GS pays back every penny of the AIG money, and GS is no longer the issuer of FDIC guaranteed debt, and is no longer a "bank holding company." 

[deadhead]

Standing Ovation!

I would like to reiterate Ned's point on FDIC guaranteed debt e.g. the Term Loan Guarantee Program.

Goldman has at least $22 billion out in this easy money and Blankfein has said that he wishes in retrospect that the amount was zero per his WSJ interview several weeks ago. 

The fact that this money is still out there and has not been paid off is just another small piece of proof that Blankfein is a hypocrite.  Blankfein is now big on the apology mantra and the we regret that we did things that are wrong spin but they are still sucking on the government mammory.

MR. BLANKFEIN: Pay back the FDIC TLGP money now or retract your WSJ interview words.  You are a complete hypocrite. 

The American people are on to Goldman's bullshit and the tide is turning fast. 

[Careless Whisper]

@Ned Z    I'm not a lawyer so maybe you can help me out with a few legal concepts.  If an entity receives $1.00 for something that is clearly worth .60 is that called unjust enrichment?  Now, if two or more people scheme to use taxpayer money for that unjust enrichment, would that be called criminal conspiracy to defraud?

Just wondering.

[Ned Zeppelin]

You'd think a simple concept like justice for all work would work just like that, but alas, it has been twisted into something unrecognizable.  The pols gets off as immune, and the rest say we were following orders. 

[Anonymous]

"She owed no apology to begin with, and I had assumed she was threatened with litigation."

+1: Exactly!

[Anonymous]

Goldman is in absolutely NO shape whatsoever to threaten anyone here with litigation.

If this went to court, all of their internal documents would be open for review by the defense. Somehow, I think that that would be very bad for Goldman. So bad, that they'd pay a significant amount of money to keep it hidden.

This is a case of the Emperor having no clothes.

Goldman is completely bluffing, and I think Ms. Tavakoli has just figured it out.

[Anonymous]

this is getting boring...

[Ned Zeppelin]

Nothing good on TV, Lloyd?

[Ruth]

And this is why I love Janet!  Thanks ZH for featuring such an outstanding person always trying to do the right thing!  Janet for RISK CZAR!  Wake up Washington, what is wrong with you!  Can you not see good people that can help in this crises, if not I suggest you put the mirror down, you've admired yourself enough, get over it, believe it or not banksters are not always the smartest in the room.  Sorry Janet I don't mean to disgrace you by associating your name with politics.....IT'S JUST WE NEED SOME TRUTH!

[deadhead]

I would love to see Janet as an advisor to Obama.

[Anonymous]

Can TimmyBenHank be tried for treason? I mean, we are in a time of war of sorts and the slush money that went to Goldman couldve bought a lot of Kevlar jackets.

[Anonymous]

they may not be triable for treason but they
could be tried for high crimes and misdemeanors
as should barry....

but since congress is a paid whore of gs the
chances are very negligible....

[Anonymous]

Article 3 Section 3 - the question becomes whether or not looting the US into failure can be defined as "levying war"
That and finding two witnesses of the same act to testify.

[Kayman]

Thank you Janet and Tyler:

But... remember a (financial) pig does not go easily to the slaughter. 

Best you get a food tester and bodyguards.  If you "accidently" slip in the shower and break your neck(s) it could trigger another Hank Paulson style public address (a lie so big you listen in stunned disbelief) by a GS owned politician about how outraged that another voice of truth has been silenced.  A "prompt investigation" will take place...blah, blah, blah...

The GS cartel buys politicians because political influence is so cheap to procure (cheaper by the dozen and to hell with the voters).  Now, after the GS cartel has bought all the politicians- including Obama and Bush- they are starting to believe their own press clippings.  

So arrogant they drink their own bathwater, these princes are trying to stare down the public.  They will lose and so will their bought and paid for politicians.

I hope this will not require riots in the streets and the shedding of blood. 

American capitalism, once rooted in free enterprise and competition, has morphed into cartel and monopolistic monsters.

Is there one uncorrupted politician? Or are they all rotten to the core?

[Anonymous]

The Good the Bad and the Ugly = The Taxpayers the Goldman Sachs and the Federal Reserve/The Treasury

ttime

[Anonymous]

Somehow Goldman executives know they are in trouble. So they are paying themselves bonuses etc. By the time justice gets to them the Goldman won't have anything left on its balance sheet to pay back the taxpayers.

[time123]

Most of the large banks have passed a good portion of their bad bets to the Fed and the government over the last months. Now the taxpayers will be called to pay up for it.

The Treasury Secretaries, acting on behalf of the U.S. taxpayers, allowed that to happen in order to save the financial system, which among others helped the taxpayers as well.

However, now that the emergency has apparently returned to better conditions, they should start passing it back on to these banks, but slowly, as the system has been saved and the banks are recovering.

time123

htp://invetrics.com

[Stuart]

No on really could be shocked anymore by this.   The skeptic in me says nothing is going to change.

[Duke of Con Dao]

Zero Hedge was one of the best sites to follow as the information came out on Goldman's machinations. The site I usually visit Calculated Risk was spotty at best in their GS coverage. Nothing about dark pools, HFT, Goldman in bed with the FED, etc. Luckily, I found your site and the information I gleaned from it I passed along to a friend that has a program on NPR and also writes a column for New York magazine.

For the CR crowd I tossed together a vid mash-up of the Korean film Old Boy where he goes up against the evil Goldman squid with heroic results. I hope the Zero Hedge crowd enjoys it. (I didn't know what dark pools were until I visited ZH)

http://www.youtube.com/watch?v=T9yvSmSGjNg

Duke

[Anonymous]

Ms. Tavakoli seems to be avoiding any criticism of Warren Buffett's especially good deal investment in Goldman in September 2008. There is documented contact between Goldman, Paulson and Buffett during this time of turmoil. Buffett gets preferred shares with 10 percent interest plus GS warrants at $115 for his investment; what the did the US Gov get for its investment? I think it tests us to think Buffett didn't get a nod and a wink about the Gov support of AIG and Goldman. I think Janet needs to turn her attention to this issue. But will she? She seems to have a love-fest going with Saint Warren.