Postcard from New York (edited)

Postcard from New York
– Meeting Jamie Dimon, chairman JPMorgan Chase
– Buying a RTW air ticket these days
– Was Singapore’s GIC right in buying into Citi and UBS?
– Mike Denoma, Steve Bertamini and StanChart
– The US Democratic party elections and
– heartlanders in Pittsburgh

Today I am in New York, and I just met Jamie Dimon, yes the chairman and CEO of JP Morgan, the man himself at his office! No kidding. He had 10 full minutes for me. There are a few people in my career whom I instinctively look up to professionally because of something of quality about them. Jamie Dimon is one of them. Meeting him personally and at his office was a thrill. I had come around to congratulate him on being recognised as the most admired bank CEO outside of Asia, according to our leadership survey earlier this year. He told me that he had to postpone at least five possible trips to Asia recently, and if he did, it would appear that Asia is somewhere there on his mind, after the current deal he is doing to acquire Bear Sterns. You know, the cool thing about Bear Sterns is that their offices is like right next door. He can see their building from his 8th floor room on 270 Park Avenue!

I don’t know how to use the content of these meetings for my blog, and sometimes if I even should because these are not editorial meetings, but they do go into some of the observations I make. I was thinking about finding an angle and putting it in but can’t find one right now.

You bet I enjoy these access that I am given to people like Jamie in their home ground. If The Asian Banker and things Asian seem to gain mind share in places like New York, I like to think that we at The Asian Banker work hard to be world class ourselves to deserve that access. We are taken seriously here by the people who are important to us, even as the major Asian players and “Dubai” are gaining attention here as you can imagine.

My problem in writing more often into this blog is time. I am now on a three week trip that involves this week in the US, next week a conference in Athens where I am a speaker, then to Jordan for the Islamic Financial Services Board (IFSB) annual meeting to support the secretary general, my dear friend Prof Rifaat, and then to Bangkok for our own Excellence in Retail Financial Services meeting and then to Kuala Lumpur for the benchmarking training that I have designed. I have a half dozen blog ideas on my mind. One on “China on the eve of the Olympics”. Another one on how to purchase round-the-world (RTW) tickets. I used to purchase RTW tickets on Singapore Airlines before from countries like Sri Lanka where a first class ticket used to be the price of a business class ticket.

But you can’t do that anymore because premium fare tickets in emerging countries now cost as much if not more than those in cities like Singapore. Also, there is an increasing number of very decent airlines with just business class service that are becoming available online, so that it is becoming more sensible to purchase tickets as you travel, which is what I am doing in this trip. Airlines are putting the best fares on the internet. Also, RTW tickets these days are tied to their respective alliances, whether Star Alliance or One World, which makes it more rigid in routing sensibly. For example, what is the cheapest way to get from Miami to Athens? The answer is to take what I call the “Spanish-speaking gulf stream” between Miami and Madrid and then on to Athens. If you take a German or British or even US airline, you will pay more with more stopovers. So, I am traveling on Iberia (One World) on this sector. I came into New York on ANA (Star Alliance), which worked well. Then from Athens to Bangkok, the most sensible choice is to travel on Jordanian Airline (One World).

From conversations I am having in New York, it looks like some people here think that the foreign SWFs pouring money into the Wall Street banks “act more in blind faith than in substance, if we took the medium term view”. The people here are saying that in raising so much capital, these mega banks have been destroying their valuations, so that we don’t know what the sustainable levels would be when the market recovers. The performance guarantees and put options in place will make the price discovery that much more opaque. Technically, Citi can’t afford to pay the dividends it does at the moment.

All this makes what is happening now a much more complicated world than when Prince Alwaheed bought into Citi in the good old days. Also, Prince Alwaheed knows the players very well and is an active shareholder in the New York scene, almost like management, even if he is not. Very different story with Singapore’s GIC, which keeps promising that they do not have any interest in a board seat. In this town, you can be a player without having a board seat and you can be a non-player even if you had several board seats.

The problem, however, for large investors like the GIC is that there are very few deals globally where they can park such large funds. Even in the $3-10 billion bracket, the sovereign wealth funds (SWFs) compete with portfolio investors, who compete with private equity funds, institutional investors and acquirers, all looking to expand their portfolios. The competition for access is fierce here, so a player like GIC enters the market first and deals later. Jamie Dimon is personally pushing for the Bear Sterns deal and it takes up all his time. The fact that he even had 10 minutes for me was a miracle. He is a no-nonsense kind of guy, and very much a New Yorker. My meeting with him was set up by Craig Weeks, a managing director in Global Trade Services at JP Morgan Chase and he was in the room with me. He is a hard nosed New Yorker. After being introduced to me, Jamie looks at Craig and asks him “who are you?” and that is how the fast paced conversation went. It is guys like him whom the GIC is up against, so when an opportunity comes its way, the thing to do is to really take it first and become a player later.

Having said that, I am not sure that investing in these global banks provides good value these days. Much like investing in US airlines, at a time when they just can’t figure out how to make money. The world is changing on them and we cannot assess them with the same rules that we did in the 1990s. These players can’t feed their loan books with just mom-and-pop loans anymore, given their size. Even the US domestic economy is not large enough for them. The people who built the consumer banking, cash management and payments plumbing that made Citi great in the 1990s may not realise it, but they can’t rebuild their bank in the same way today as they did then. It is not even the same bank.

More than half of Citi’s profits these days are trading related. Maybe that is why the board chose to appoint a trader to be CEO rather than a franchise builder. Even Deutsche Bank, which in the past five years had built a powerful structured finance franchise was hit this week, not by its exposures to that business but by write downs of loans to traders.

Although structured finance is technically a lending business, it involves skill, teamwork, consulting capability and a strong global corporate customer base. It’s still a franchise-based business. But lending to markets, either by investing in CDOs or helping hedge funds and other investors leverage on their investments is a different ball game altogether. It’s much larger, and more importantly, it is a world where credit risk and market risk come together. In almost all cases, none of these banks in New York, even understand the risks that they are lending to.

We like to think there is considerable intelligence in this unfolding business, with quants (mathematicians with PhDs paid ridiculous salaries) and risk experts calculating ad infinitum. Anyone with serendipity in New York will realise that actually, it is a business defined by incredibly self-serving salesmen, both on the buy and sell side, with an eye on their annual bonuses. Some of the “synthetic” instruments that they come up with are 3-4 times removed from the underlying assets that their clients have no clue what they are buying anymore. The best thing to be in this business is “stupid”. If you don’t understand it, it is not worth the risk.

When Temasek started focusing on investing in commercial banks, they focused on banks that required building all the “plumbing” to succeed in their domestic markets. Commercial banks. Temasek also invested in its own internal skills to oversee this business. Even as minority investors to the larger banks in China, such as Bank of China and China Construction Bank, it was possible to say that they understood the business, even if it was a highly risky proposition.

But the global banks are now a very different animal. A HSBC or a JPMorgan Chase are no longer just large commercial banks. They morph into trading houses and expose their balance sheets to incredible risks that their management, let alone board, have never seen before. In fact structurally, these risks are no longer business or portfolio risks.

Even after the sub-prime triggered crisis blows over, these banks will have to go right back into looking for market instruments of the size, if not larger, than the leveraged investors they lent to in the past, just because large portfolios of mom-and-pop loans no longer satisfy the kind of ROEs that these banks need to deliver to satisfy their investors.

The choice of Vikram Pandit, the trader, to be CEO of Citi is very telling. What do you think they discussed in the board room of Citi when they narrowed down their options of who should be CEO? (I heard here that Shaukat Aziz, former Citibanker and until recently prime minister of Pakistan was also considered, but he had no experience in the markets. I was surprised that John Thain was not.) The first question any board would ask would be “what is our greatest threat in the business today?”

If I was looking at Citi from behind a 1990s pair of glasses, I would assume that the greatest issue was in internal controls (which was what Chuck Prince was made CEO to deal with). But somewhere between 1999 and today, Citi had morphed into a self dealing treasury business even as the world was assessing it as if it were still a global commercial bank. Even as a global commercial bank, it was no longer able to deliver the 30 percent CARG on its business lines at the country levels and the 20 percent ROE at the enterprise level. Sure, there are a number of business level issues that Mr Pandit is scarcely qualified to fix, but the board probably reckoned that they are secondary to the most important menace.

Whether Pandit is able to pull it off, nobody would even dare to guess, and the prognosis is frankly not great here in New York. But I think that this time, Citi did get the definition of the problem right.

An observation I have come to make about traders is that the best ones are basically gamblers, and become too successful to be motivated by work. The worst ones we don’t even want to know. But there is a category of traders in between the two who are not necessarily great as traders, but tend to appreciate the conceptual ramifications of their business. I know some of these who subsequently become consultants and even bankers. I respect the application of their knowledge to everyday business risks. I do wonder if Pandit belongs to this category, not spectacular as traders, but knowledgable enough to apply their skills in everyday business. Everybody wants to give him the benefit of the doubt, but th first few issues he faced as CEO was not convincing.

I have been saying for a year now that even in mainstreet Asia, many banks that boast to us about their franchise building skills in retail banking and so on are probably making more money from their proprietary trading and treasury operations today. These forgive a thousand sins in the organic part of their business and we really need to start evaluating them in this way.

I hope that CDOs don’t go away after the current crisis blows over. I hope that investors do not become allergic to them, because they are instruments that we now understand well. Very simply, the discipline in how the underlying assets come about must be tightened. If an institution calls itself a bank, then very simply it must have very healthy asset and liability sides to its business. It cannot borrow from the market to generate those large portfolios indiscriminately. I think Jamie Dimon understands this very well. He is a franchise builder, and his incredible experience in all three areas of the industry when he worked with Sandy Weill – banking, securities and especially insurance – stands him in good stead as he steers his own complex organisation into this new realm. My opinion is that people with insurance industry experience are especially well equipped to succeed in businesses where taking indeterminate market risks are instincts they must have.

If Singapore’s GIC’s intention is to invest in the future of the United States or in banking in its strictest sense, then they would have been better looking at the main street players like Washington Mutual (in California), Suntrust (in Atlanta) or PNC (eastern corridor and incidentally also owner of Blackrock, the hedge fund). These are the real bank players in the US. The time to build relationships and gain a foothold in this segment of the industry is also now, when bank stock valuations are down, but not that beaten down as the Wall Street players. The people are also nicer.

I think that the GIC, missed some of the opportunities that Temasek invested in after the 1997 Asian crisis. There is some healthy rivalry between specific people in these two organisations, as one ridicules some of the positions that the other has taken. But in the end, it appears as if the GIC is now trying to make up for lost time by investing heavily in the high seas. The question to ask about the GIC is not whether it is going to lose money because that is seriously a question nobody can answer today. Will they make their money back in 10 years? Why not. Also, I do think they are well diversified, so on a balance, they should be fine.

The question we should ask its managers and debate in a healthy manner is: what is their world view of the future of the banking industry? How would they describe a UBS or a Citi or even JP Morgan Chase as businesses today projected into the future? If they describe these banks in linear terms as if they are the same kind of institutions that Prince Alwaheed invested in the 1990s, and therefore will generate great profits when the market returns, then it is my opinion that the GIC will be in for a rude shock.

What is their game plan? If they have an exit plan, what is the time frame within which they think it will take place and under what scenarios. From reading the online Singapore newspapers from here, GIC has one other problem. Temasek, with its annual report and the fact that it seeks ratings for its debt, opens itself up to scrutiny and dialogue. The GIC does not.

I think that taking a defensive stance that “of course we will make money!” is not helpful to its ultimate stakeholders, the people of Singapore. The more appropriate stance would to say “we really don’t know where this will take us, but this is our view of how the industry will play out.” If they did not have a view that they are already articulating internally, or if that view is an assumption that we will make money in the same way that Prince Alwaheed did 20 years ago, then I would say there is cause for concern.

There is no need to take a defensive posturing because the Singapore government has been proven to be right more than they have been wrong, conservative as they are. You would think that they operate on some hidden wisdom that the layman is not privy to. I am here in New York, with god access to some players, and I don’t see no hidden wisdom anywhere in the financial markets. With engagement, even if they are wrong at least they will be able to recalibrate their views and their stakeholders (the people of Spore) will be at the very least treated as adults, and not children to be talked down to.

The other question to ask is if GIC can build on this access they have secured in New York and Zurich? The thing that is needed to succeed in New York is not money, even if you have loads of it. It is personality and loads of it. That’s what makes someone like Prince Alwaheed a player here. I keep mentioning his name, because I truly suspect that some of the investors entering the market at this stage are doing so in the belief that they will be able to profit the way he did before.

I was just walking today past the Trump Center in downtown Manhattan where they film “The Apprentice”. Around the corner was a memorial plaque on the pedestrian walkway to Harry Helmsley, another real estate personality. Michael Bloomberg is everywhere both as mayor as well as owner of the market information business. These guys make sure they are in your face. Incidentally, so does the tea lady in the 8th floor of JP Morgan Chase’s chairman’s offices. She runs the 8th floor like her little fiefdom. “You’re here to see Jamie, are you?” she asks, in a heavy Brooklyn accent.

I think it is shortsighted for the GIC to think, even if it says so, that it does not want management access to Citi and UBS. Yeah sure. Be treated like a doormat and be called upon every time there is a rights issue. I don’t think New Yorkers like their investors that way. This is a city where the players play to an end-game even if it destroys them. Everyone wants to know what your endgame is. In 2000, on the day that the Citi board decided to choose Sandy Weill over John Reed as CEO, Reed just went downstairs and travelled aimlessly on the subway for the rest of the day. Anyone who lives here knows what that is like. He played to the end, lost and felt like a nobody for the rest of the day. Donald Trump recounted in one of his books that when he was about $600 million in the red and nearly went bankrupt in the 1980s, he walked past a beggar and thought to himself that even if the beggar had no money on him, he was $600 million wealthier than him. This is how these guys think.

Even if the GIC has a put option on a performance guarantee written into its investment, really, what can the management of either Citi or UBS really guarantee any investor, given the exposures to the market they have on their books? The only logical purpose of making an investment in a Citi or whatever, is to plug into the rest of Wall Street and using that as a launching pad to become a focused investor in global financial institutions. I think the notion of being an “opportunistic investor” is very dangerous in the banking industry today because these institutions are way too large, way too controlled by the folks down in DC and way too much of a closed community for any outsider to succeed by just throwing money at them. The fundamental question for the GIC is what is the game plan? Such a game plan can only be driven by a personality who can articulate what he or she wants to achieve, and not a bunch of fund managers gazing at yesterday’s balance sheets.

Meanwhile back in Singapore, as Mike Denoma sets to leave his post at the reputable British emerging market bank, I have no clue where he is going to, although he is doing some very “busy things” even on the eve of his departure from StanChart. I can’t elaborate. A friend from London wrote me an email today saying that Mervyn Davies told him that Mike was a “devil to manage”. I think we get the picture.

As for Steve Bertamini, this StanChart job is a big huge break for him, bringing him from the outside of banking into a respectable position he has craved for all his consumer finance career. GE Money, for all the work it does, does not even begin to smell like a bank internally. It has staff who are more at home with manufacturing business processes than they are with risk management and capital allocation. Just look at any of their ugly credit cards in Thailand, Indonesia – they were designed by an industrial designer who manages their financial services brand with rules from the manufacturing industry. They don’t even have a good marketing guy managing the brand of their financial assets. The consumer finance business they cobbled together in the aftermath of the Thai financial crisis appears great to the outsider, but is run more like an engineering process than a financial portfolio, which is not wrong entirely. They have been learning banking fast, to be sure, but they did not start that way. Like all things American, they did it big.

Will Bertamini do a good job at StanChart? Well, let’s just say that he is an absolute outsider to the incestuous world of relationships in StanChart’s consumer banking world. From all accounts he is achievement oriented, very hard core US multi-national culture that is very numbers focused. Not everyone in StanChart responds to that well, given the groupie environment there.

He will have to spend some time adjusting to earn the regard of the very entrenched people inside StanChart, because not all are going to change for him. Some, who are already A type achievers might find him refreshing. None of the do-good stuff that Mike Denoma was famous for. But a good number of people in StanChart (eg in China) hold together because of people like Mike and even Wilson Chia. If these guys go, the magic of working in StanChart is gone and someone like Bertamini will have to re-create a number of teams around himself, which is not bad if he has 10 years in front of him to do it.

The single biggest culture shock in StanChart for Bertamini would be the proportion of women executives he will have t deal with and mobilise. GE is unmistakably a he-man’s world. In StanChart, even if he limits himself to the pockets of guys around, he will find that there are armies of women lurking around somewhere demanding to be taken seriously. People like Mike Denoma, Peter Favila and Wilson Chia handle their women subordinates very well. I don’t know about this GE-bred Texan.

Wold I be excited about Bertamini? Well, let’s just say he has that helicopter view of the buiness. He’s okay, but more from a marketing angle. I tend not to be so enamoured by the marketing types because consumer banking is gritty stuff these days, tactical warefare every single day. So, you need someone with strong hands-on skills.

Mike works well with the execution type people in banks like StanChart who look up to him for direction, they need that. Bertamini, I don’t know. He is a marketing man. People like him shine in their careers in Asia because of our continuing colonial mindset, we let them. If we had our own version of Jamie Dimon, I would be elated, regardless of whether he is white or black or blue. But I don’t think that I am seeing that here.

But nobody has stepped on to the plate recently and I symphatize with StanChart’s inability to find one. Whether Indian, Chinese, Filipino or even white – and there are some very good ones already in this region – I really think that consumer banking needs people who grew from the ground up, understand how to rally the troops around them, make tactical decisions and build a franchise. I don’t think that Bertamini is one of them, although I will give some slack for him to be able to learn those skills.

One thing I am curious to see is where Bertamini will locate himself. In my mental inventory of these Texan types whom I know, living in Asia is very difficult for them. They will do anything to move the family to Hawaii or as Bertamini did, to Australia, even if they ran an Asian operation. He might agree to live in Singapore for a while and then slowly justify moving to a western country for comfort. So I am curious to see if Bertamini might move to London within a year. Let’s see if I am right. I have seen it happen several times now with others. Even if he says he will be based in Singapore, it will be interesting to see where the rest of his family will live. GE is a no-nonsense company and very results oriented, but StanChart and the bosses in London may be more accommodating of him. Whatever it is, from running GE Australia to running StanChart globally is a step up for him.

Good nite. I will be flying to Pittsburg tomorrow. Spending two days there, enroute to Miami. So interesting to learn so much about Pittsburgh in this few weeks as Pennsylvania prepared for the Democratic primary and chose Hillary Clinton instead of Barrack Obama. Whenever I travel to Washington DC from New York, which I am not doing this trip, I always take the train because it leaves from downtown to downtown and is less of a hassle than flying. Besides, I like trains.

The train always passes Philadelphia station, which is one of the most beautifully restored train stations in the world, by my standards. It is also where you would get off if you were going to Wharton where the liberal academics are. Well, Pittsburg belongs to the same state, Pennsylvania, but is located way out there in the western end of the state, where the people are supposed to be a little bit more red necked and disenfranchised than their countrymen in the eastern seaboard. Obama said to his determinant that they are bitter because of job losses, and so have turned to traditions like guns, religion and anti-immigrant sentiment.

Yesterday, his ex-pastor gave a terribly inflammatory speech that is being aired on every TV channel and was in the New York Post on the streets today. Did Obama no favours. The New York Times and Wall Street Journal have been very supportive of Obama and tried to wish the problem away in their editorials. Strange to find such support from the business media in a city that really prefers Clinton.

For all the good things that are to be said about Obama, his misreading of his former pastor, Rev Wright, points to his inability to read people judgmentally and correctly. I think in politics or any form of leadership this is a critical survival tool.

Having said that, Obama’s March 18 speech on “A more perfect union” (see youtube http://www.youtube.com/watch?v=pWe7wTVbLUU ) does highlight his incredible ability to rise above the fray, and make him one of the most inspiration leaders since JFK. Which makes the current situation with Rev Wright very sad indeed.

I am following the twists and turns of this election so very carefully, and how leaders can be severely tested. There is nowhere to hide, whether it is Hillary Clinton, Obama or McCain. I think the demands they put on their future president are unreal. Any potential leader in any other country would not be able to survive the American election process. But having said that, it is not that they end up selecting the best candidate anyway.

The Singapore government has impeccable relationships with people in the Republican party in the US. Two of the previous Singapore ambassadors are well liked and have many friends in DC. Almost every congressman or senator who has met with visiting Singaporean ministers have very high opinions of them. I just made a mental note from my various encounters that they tend to be Republican rather than Democrat, even if I am sure the Singapore embassy here cultivates both (Kishore, correct me if I am wrong). Strangely enough, the ex-congressmen, senators and regulators I have come to know over the years tended to be Democrats rather than Republicans. I don’t plan it that way, it just happens. My closest American friends however, are almost always Republicans, not that I choose them that way. This is the strange quality about the American way, things just fall where they fall, in a simple way. Certain types of people attract certain types of people, and they are able to hang an entire political and even social system on this premise.

But cultivating political relationships in Washington DC and banking relationships in New York are two very different things completely. The Singaporeans are a pro in one and new to the other. Strangely enough I seem to think that the Arabs, who in New York can be more in your face, have a greater chance of surviving New York then the Singaporeans. There is a lot of talk about Dubai here right now. The failure of Dubai Ports to acquire US ports set afire a lot of soul searching about Arab money in New York. I think when the time is right, the Arab’s relationship with Wall Street will develop positively, if only because they are working at it. But when it comes to even trying to introduce road pricing (which the New Yorkers rejected recently), the name Singapore is not even mentioned as the city that started it all, although London is.

Travelling to Pittsburgh brings me closer to what the Americans would call “ground zero”, where the ideas that shape the leaders are tested against the receptivity of the American heartlanders. I have now been to so many small US cities for a variety of reasons, that I truly feel at home in this country, although still, it is not my country.

Even if this country can be so very messy and third world sometimes (the internet connection at the Westin New York was down all of yesterday and the lady on the other end of the phone just said “I can’t do anything about it” and hung up), I enjoy every minute I am here. In it’s own way, it is a great country.


Comments

  1. hey, neck long long

  2. 3 months without a post????

    your public awaits

  3. emmanuel,

    since you know the guy, whats your assessment of Caruana?

    caruana and trichet seems to be the last central bankers with any credibility left now that knight has resigned.

    bernanke and king messed up big time. you can argue that their predecessors did most of the damage, but the Fed and BOE today are now inextricably viewed as incompetent nonetheless. the BOJ is a one trick pony, and the others are either too small (canada, australia) or too emerging (russia, china, india) to take the leadership role.

    bad news is of course, caruana has consistently been forecasting $1 trillion in total writedowns which means there's a long road ahead yet.

  4. 'Why did the Fed buy $29 billion of the most toxic securities, and essentially bail out JPMorgan Chase (JPM), which bought Bear Stearns?''

    good question asked by Nouriel Roubini and many others. What do you think? Was that a bailout of Bear or of JPM?

  5. http://biz.yahoo.com/barrons/080804/sb121763156934206007_id.html?.v=1

    'I estimate this financial crisis will lead to credit losses of at least $1 trillion and most likely closer to $2 trillion. When I made this analysis in February everybody thought I was a lunatic. But a few weeks later the International Monetary Fund came out with an estimate of $945 billion, Goldman Sachs (GS) estimated $1.1 trillion and UBS (UBS) $1 trillion. Hedge-fund manager John Paulson recently estimated the losses would be $1.3 trillion, and late last month Bridgewater Associates came up with an estimate of $1.6 trillion. So, at this point $1 trillion isn't a ceiling, it's a floor. And the banks, as I've said, have written down only about $300 billion of subprime debt.'

  6. hi guys, sorry for the delay. I am still drafting a blog entry on my strategy as I invest in US bank shares during this crisis period. I must say that bottom fishing, my US banks shares are now out-performing my other Asian investments.
    Jamie Caruana is one of the moe thoughtful ex-central bankers, coming as he does from a country that did not allow its domestic banks to be over-exposed to the global capital market. His number and the IMF numbers are in all likelihood from the same analyst pool at the IMF, who were probably more generous because they have no vested interest in the US investment banks and they were probably thinking about the broader market, and not just the aggregate losses on the books of specific institutions. hedge fund estimates would take into consideration marked to market losses. As I will explain in my blog later, I am so uncomfortable with everything that Hank Paulson is doing – I keep saying he is an investment banker in regulator's clothes!!!

  7. Actually, when the Fed threw $29b at the Bear's trading book, they were throwing a tear drop into the ocean of trading debt. There was no way in the world to put a number to the total value of the universe of
    opaque counter-party trades they were attempting to save, because there was no transparent price discovery mechanism in the derivatives and credit swap markets. Everyone goes by hearsay. The paradigm in the US was “let's save the trading positions of the investment banks” and the markets will heal itself. The government should have saved its direct constituents – the public utilities, countys and corporates who were tricked into issuing the securities in the first place and then buying the credit default swaps to insure them. At least at that level, they would have a definite idea of size of the exposure of the primary issuers, and they would have been saving thousands of innocent people whose lives were being affected by this malaise.

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