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| TIME | SPEAKER | TEXT |
|---|---|---|
| 00:00:57 |
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THE COMMITTEE WILL PLEASE COME TO ORDER. TODAY WE ARE HOLDING OUR SECOND DAY OF HEARINGS ON THE FINANCIAL... |
| 00:13:21 |
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THANK YOU, MR. CHAIRMAN. TODAY WE CONSIDER THE CASE OF THE AMERICAN INTERNATIONAL GROUP, AIG, A GLOBAL... |
| 00:19:00 |
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THANK YOU VERY MUCH. FOR OUR FIRST PANEL, WE'LL HEAR FROM BE LYNN TURNER WHO SERVED AS CHIEF ACCOUNTANT... |
| 00:21:00 |
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THANK YOU, CHAIRMAN. IT'S AN HONOR TO BE HERE. I'M HERE TO TRY TO EXPLAIN FROM OUR PERSPECTIVE A LITTLE... |
| 00:29:05 |
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THANK YOU. |
| 00:29:09 |
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THANK YOU, CHAIRMAN, WAX MAN, COMMITTEE MEMBERS. I THINK THIS IS A VERY IMPORTANT HEARING IN LIGHT... |
| 00:29:32 |
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COULD YOU PULL THE MIC CLOSER TO YOU? THERE IS A BUT ON KNOW ON THE |
| 00:29:34 |
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IT'S ON. |
| 00:29:36 |
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YES. |
| 00:29:37 |
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I'M SORRY. BUT IN THE WORST L.WORDS OF GEORGE SANTANA, THOSE THAT CANNOT REMEMBER THE PAST ARE CONDEMNED... |
| 00:36:18 |
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THANK YOU VERY MUCH. WE'LL NOW RECOGNIZE MEMBERS FOR 5 MINUTES EACH TO ASK THE TWO OF YOU QUESTIONS... |
| 00:36:29 |
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THANK YOU. AND I'D LIKE TO WELCOME OUR PANELISTS AND THANK THEM FOR THEIR PUBLIC SERVICE, PARTICULARLY... |
| 00:38:52 |
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WELL, I GUESS WE'LL FIND ON OUT. I HOPE NOT. BUT I WILL SAY THAT THE DISTINCTION BETWEEN CREDIT DEFAULT... |
| 00:40:21 |
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SO ARE THESE PRODUCTS JUST GAMBLING? |
| 00:40:24 |
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THE GOVERNOR CALLED THEM GAMBLING. I THINK, IF IT WERE -- |
| 00:40:30 |
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WE BANNED IT IN NEW YORK STATE. |
| 00:40:32 |
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AND THE COMMODITIES USURRENDER OUR POSITION AND DO YOU THINK -- |
| 00:40:35 |
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WE DID BAN IT. IN 1909, AFTER THE CRASH OF 1907, WE BANNED THIS KIND OF ACTIVITY THEY USED TO BE DONE... |
| 00:41:44 |
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THANK YOU. |
| 00:41:48 |
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FIRST OF ALL, LET ME SAY THAT I'M PLEASED THAT WE MAY BE LOOKING AT FANNIE MAE AND SOME OF ITS RESPONSEIBILITY... |
| 00:43:57 |
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I HAVE ACTUALLY DONE WORK ON BEHALF OF OFAO AT BOTH FANNY AND FREDDIE. |
| 00:44:03 |
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THEN I DON'T WANT TO HEAR -- |
| 00:44:07 |
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BUT, LET ME JUST SAY THAT I SEE GREAT SIMILARITIES BETWEEN BOTH OF THOSE INSTITUTIONS AND AIG AND... |
| 00:44:19 |
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MORE THAN APPLAUD. IF THIS COMMITTEE ISN'T GOING TO INVESTIGATE -- I INTEND TO ASK -- NOW, THE SPECIAL... |
| 00:45:12 |
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I THINK THE REPEAL OF GLASS SEEINGEL WAS A CONTRIBUTING FACTOR HERE. |
| 00:45:17 |
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MR. COMMISSIONER? |
| 00:45:18 |
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I AGREE. |
| 00:45:22 |
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AND ONE OF THE INTERESTING THINGS, TOO IS NEW YORK IS IN MOST CASES, THE STATES WERE PRETTY GOOD REGULATORS... |
| 00:45:31 |
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YES, I THINK THE RECORD WOULD SUPPORT THAT. |
| 00:45:34 |
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THE DEFAULT SWAP IS REALLY OUT OF YOUR PURVIEW BUT EVEN REGULATION OF FANNIE MAE AND WHAT THEY WERE... |
| 00:46:14 |
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IT WAS ACTUALLY -- CONGRESSMAN FRANK, MUCH TO HIS CREDIT, DID INTRODUCE LEGISLATION THAT GOT PASSED... |
| 00:46:21 |
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BUT IT WAS BLOCKED IN THE SENATE. |
| 00:46:23 |
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IT WAS NOT PASSED IN THE SENATE AND THAT WAS GREATLY UNFORTUNATE. |
| 00:46:30 |
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I VOTED AGAINST IT. NOW GLASS SPIEGEL, WE VOTED AGAINST NOT TO REPEAL THAT. WE VOTED IN THE AUTOPSY... |
| 00:46:52 |
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THE RESPONSIBILITY OF THE STATE REGULATORS, WHICH EXECUTED ON EXTREMELY WELL HERE -- |
| 00:46:58 |
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YOU COULDN'T CONTROL THE SITUATION, CORRECT? |
| 00:47:02 |
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TO PROTECT POLICY HOLDERS AND PROTECT THE INVOLVENCEY -- |
| 00:47:05 |
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IT WAS THE RESPONSIBILITY OF THE CONGRESS OF THE UNITED STATES AND ALSO THE RESPONSIBILITY OF THE... |
| 00:47:26 |
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GENTLEMAN'S TIME EXPIRED. |
| 00:47:29 |
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THANK YOU VERY MUCH, MR. MR. CHAIRMAN. TO THE WITNESSES, I WANT TO THANK YOU FOR BEING HERE. AND... |
| 00:49:34 |
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I HAVE BEEN A BUSINESS EXECUTIVE MYSELF AND I TELL YOU WHEN OUR COMPANY, WHEN THINGS GOT TOUGH, YOU... |
| 00:50:13 |
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AND IF A COMPANY IS DROWNING, THEN YOU'RE GOING TO GO AND SPEND THAT KIND OF MONY? IT'S CRAZY. I... |
| 00:51:19 |
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I THINK THERE ARE SOME REGRETTABLE HEADLINES IN THAT BUT I WILL SAY ONE THING, HAVING BEEN AT LARGE... |
| 00:52:14 |
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I WOULD TEND TO DISAGREE WITH YOU WHEN IT COMES TO PEDICURES, FACIALS, MANICURES, THE AMERICAN PEOPLE... |
| 00:52:21 |
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I AGREE. |
| 00:52:23 |
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THEY ARE VERY UPSET. |
| 00:52:25 |
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I SAID THEY ARE REGRETTABLE AND WRONG HEADLINES IN THAT. BUT THE IDEA OF MAKING SURE THAT YOU CAN... |
| 00:52:38 |
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THAT'S THE WAY TO GET THE GAMEPLAN BACK ON TRACK. |
| 00:52:41 |
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I AGREE. |
| 00:52:43 |
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GENTLEMAN'S TIME EXPIRED. |
| 00:52:44 |
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THANK YOU. MR. CHAIRMAN, LET ME SAY THANK YOU VERY MUCH FOR COMMITTING TO DO A HEARING ON THE FREDY... |
| 00:54:24 |
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YES. WHAT I WOULD HAVE DONE IS I WOULD HAVE SAID EACH ACTIVITY HAD TO GET SOME KIND OF AN EXEMPTION... |
| 00:54:57 |
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MR. CHAIRMAN, THIS IS THE TYPE OF LINE THAT I WISH, INSTEAD OF JUST US MEETING, AND MAYBE WE OUGHT... |
| 00:55:42 |
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I WOULD FIRST REVISIT THE CFMA ON ITS CREDIT DEFAULT SWAP DECISIONS THAT IT IS COMPLETELY UNREGULATED... |
| 00:57:29 |
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WE NEED A SET OF HEARINGS THAT IDENTIFY WERE EACH OF THE ISSUES AND PROBLEMS ARE, AND IT SHOULD BE... |
| 00:58:59 |
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GOT BACK FROM MY DISTRICT, AND THE OUTRAGE IS NOT THAT WE THREW MONEY AT THE PROBLEM, BUT THAT WE... |
| 00:59:23 |
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THANK YOU VERY MUCH, MR. BILBRAY. MR. KUCINICH. |
| 00:59:29 |
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THANK YOU VERY MUCH, MR. CHAIRMAN. TO MR. DINALLO, TREASURY SECRETARY PAULSON IS THAT THE FORMER... |
| 01:00:15 |
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YES. |
| 01:00:18 |
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COULD YOU SPEAK INTO THE MICROPHONE? |
| 01:00:20 |
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YES. |
| 01:00:25 |
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WAS SECRETARY PAULSON AT ANY OF THOSE MEETINGS? |
| 01:00:28 |
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AND THAT I WAS PRESENT AT. -- C-SPAN.ORNONE THAT I WAS PRESENT AT. I AM NOT TRY TO AVOID THE ANSWER,... |
| 01:00:42 |
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DID YOU HAVE KNOWLEDGE THAT HE WAS THE FORMER CEO OF GOLDMAN SACHS? |
| 01:00:47 |
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OH, ABSOLUTELY. I AM HAPPY TO TALK TO ABOUT THIS. YOU ARE ASKING YES OR NO QUESTIONS AND I AM FINDING... |
| 01:00:57 |
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BEFORE THE BAILOUT, DID SECRETARY PAULSON AND OTHERS RAISED CONCERN ABOUT THE IMPACT IT WOULD HAVE... |
| 01:01:09 |
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YES, BUT NOT ONLY GOLDMAN SACHS. I ADMIRE THE PRESIDENT OF THE FEDERAL RESERVE. HE HAS TAUGHT ME VARIOUS... |
| 01:01:21 |
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I AM NOT REALLY ASKING ABOUT HIM. |
| 01:01:25 |
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PLEASE, SIR, I PROMISE -- |
| 01:01:29 |
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I WANT YOU TO ANSWER MY QUESTION. THE HEAD OF GLOBAL COMMERCE FOR LEHMAN BROTHERS SENT AN E-MAIL ON... |
| 01:03:11 |
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FOR WHAT I WITNESSED IN THE FOUR DAYS AND FIVE DAYS OF WHAT I WAS EXPOSED TO, BASED ON MY PERSONAL... |
| 01:03:25 |
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YOUR ANSWER IS YOU DO NOT KNOW. |
| 01:03:29 |
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I DO NOT FEEL I HAVE A BASIS TO ANSWER THE QUESTION ASKED. |
| 01:03:36 |
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MR. CHAIRMAN -- THANK YOU, MR. CHAIRMAN. |
| 01:03:41 |
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THE GENTLEMAN YIELD BACK THIS TIME. |
| 01:03:51 |
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THIS UNBRIDLED GREED, THIS CALLOUS ABUSE OF TRUST, OF HARD- WORKING AMERICANS' SAVINGS, IT IS JUST... |
| 01:05:00 |
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THE SYSTEM WORKED WELL, BECAUSE THERE IS A STRONG REGULATORY MODE AROUND ALL OF THE COMPANIES. THERE... |
| 01:05:31 |
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THOSE ASSETS ARE WALLED OFF AND CANNOT BE USED, AND ARE OF THE PROBLEM IS THAT THEY DISCOVERED THAT... |
| 01:05:45 |
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THAT IS A VERY SOPHISTICATED STATEMENT. THERE IS SOME TRUTH TO -- I DON'T KNOW, BECAUSE I'M NOT IN... |
| 01:06:08 |
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I MET WITH ONE COMPANY THAT IS IN DANGER OF GOING UNDER, AN INSURANCE COMPANY, BECAUSE THEY HAD TOO... |
| 01:06:32 |
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WE DO CONSTANTLY 7 EXAMINATIONS OF THE COMPANY. THERE ARE FAIRLY STRICT RULES AND ACCOUNTING STANDARDS,... |
| 01:07:14 |
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DO YOU HAVE A BAD LIGHT OF NEW YORK FOR FANNIE MAE? -- THE GUIDELINE OF NEW YORK FOR FANNIE MAE? DO... |
| 01:07:40 |
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YOU ARE BEING VERY HELPFUL, THANK YOU. WE HAVE WHAT IS CALLED A GUARANTEED FUND, YES. |
| 01:07:48 |
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ONE OF THE DEBATE IS WHETHER THE STATE CAN DO THIS AS OPPOSED TO THE FEDERAL. IT LOOKS LIKE OTHER EXPOSURES... |
| 01:08:27 |
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WE HAVE OVER 1000 COMPANIES. I CANNOT SIT HERE AND TELL YOU WHAT THE NUMBERS ARE. WE HAVE IN PLACE... |
| 01:09:34 |
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MR. TIERNEY. |
| 01:09:39 |
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THAT FOLLOW ON MR. DINALLO, -- LET ME FOLLOW UP ON MR. DINALLO. MASSACHUSETTS WAS QUICK TO SHARE ... |
| 01:10:36 |
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THEY COULD HAVE CHOSEN US. |
| 01:10:40 |
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THEY COULD HAVE CHOSEN A REGULATORY AGENCY THAT WOULD HAVE BEEN MORE DIFFICULT TO DEAL WITH. THE... |
| 01:12:23 |
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I WOULD VIEW THOSE AS A SERIOUS ALLEGATIONS, YES. |
| 01:12:27 |
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IT ALSO SAYS THAT PRICE WATERHOUSE COOPER HAD REPORTED THE SAME CRITICISMS OVER LACK OF TRANSPARENCY... |
| 01:12:48 |
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I DO NOT KNOW WHERE THEY DOWNGRADED IT FROM AND TO, BUT IT IS THAT THEY HAD SOME CREDIT ENTERPRISE... |
| 01:13:05 |
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YOU INDICATED THAT WE OUGHT TO BE LOOKING AT WHAT WENT WRONG HERE, AND I AGREE. WHAT IS YOUR REACTION... |
| 01:13:26 |
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BITTERLY SINCE THE BEGINNING OF THE DECADE THEY HAVE SAID THEY -- LITERALLY SINCE THE BEGINNING OF... |
| 01:14:04 |
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WHEN THE TWO NEXT WITNESSES TAKE THE STAND AND TELL US IT IS ALL ABOUT MARK TO MARKET, IN FACT, MANAGEMENT... |
| 01:14:14 |
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I WOULD TOTALLY AGREE WITH THAT. |
| 01:14:17 |
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THANK YOU VERY MUCH. |
| 01:14:21 |
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THANK YOU VERY MUCH, MR. TIERNEY. MR. CARTER. -- TURNER. |
| 01:14:32 |
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THIS IS ARE HELPFUL, NOT JUST FOR THE AMERICAN PEOPLE, BUT FOR ALL OF US. IN LOOKING AT YOUR WRITTEN... |
| 01:18:27 |
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I WOULD AMEND ONE OF MY EARLIER ANSWERS. ONE OF THE THINGS THAT HAVE THE FINANCIAL SERVICES COMMITTEE... |
| 01:19:53 |
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I AGREE WITH ERIC ON THIS. YOU GOT PAID HANDSOMELY FOR DOING THOSE TYPES OF DEALS. IT IS A MAJOR CONTRA... |
| 01:21:29 |
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MOST OF THOSE LOANS THAT WENT INTO DEFAULT WERE REFINANCED. SOMEONE WENT BACK AND SOLD THEM AS A PRODUCT... |
| 01:21:38 |
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THANK YOU VERY MUCH, MR. TURNER. MR. HIGGINS? |
| 01:21:44 |
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GENTLEMAN, I WOULD LIKE TO TALK TO YOU ABOUT INTERNAL AUDITS OF INDEPENDENT AIG AUDITORS ADVISING... |
| 01:24:50 |
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IF YOU LOOK AT THE THIRD QUARTER FILING FOR THE PERIOD, YOU DO NOT SEE ANY NOTION OF THE FACT THAT... |
| 01:26:55 |
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THANK YOU, MR. CHAIRMAN. IN THE CHAIRMAN'S OPENING STATEMENT, HE SAID WE ARE GOING TO ASK QUESTIONS... |
| 01:28:21 |
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I AM A BELIEVER THAT IF A COMPANY HAS PERFORMED WELL, THE EXECUTIVES SHOULD BE COMPENSATED WELL FOR... |
| 01:30:04 |
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IN THE NEXT QUARTER, THE LOSS WAS ALMOST $8 BILLION, $13 BILLION LOSS IN TWO QUARTERS. AT POINT, THEY... |
| 01:30:33 |
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WHEN EVER YOU ARE PAYING SOMEBODY FOR WALKING AWAY FROM THE COMPANY, THAT IS NOT IN THE BEST INTEREST... |
| 01:30:46 |
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I HAVE A QUESTION OF THESE SWAPS THAT I WOULD LIKE TO GET AN ANSWER ON. YOU DROP THE NUMBER, 62 TRILLION... |
| 01:31:22 |
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- OWED? |
| 01:31:25 |
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YOU RAISE AN INTERESTING QUESTION, BECAUSE NOBODY KNOWS WHAT THE REAL EXPOSURE IS. THAT IS THE NOMINAL... |
| 01:32:28 |
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THIS IS AN OVERLY SIMPLISTIC STATEMENT THAT WILL NOT HOLD IN PRACTICE, BUT THERE IS AN ARGUMENT THAT... |
| 01:33:23 |
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THIS IS ONE CORP., IN THIS CASE, AIG, BETTING AGAINST ANOTHER CORPORATION ON A VALUE THAT DOES NOT... |
| 01:33:45 |
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I WILL CORRECT YOU TO THE EXTENT THAT IT MAY GO THE OTHER WAY. THEY SOLD PRODUCTION AS A AAA OR AA-RATED... |
| 01:34:45 |
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MR. DINALLO, I WANT TO START WITH YOU. 25 YEARS AGO, I WAS A RESEARCH ASSISTANT TO UPDATING THE BASIC... |
| 01:35:43 |
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THERE IS A STRONG INTENTION BETWEEN POLICY WILL ADDRESS AND SHAREHOLDER INTERESTS. -- THE POLICYHOLDERS'... |
| 01:36:05 |
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A FIDUCIARY OBLIGATION TO POLICYHOLDERS. |
| 01:36:09 |
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THERE IS SOME DEBATE, ACTUALLY, BECAUSE THEY HAVE BEEN SO TRAINED UNDER OUR OLD LAW, AND AFTER ENRON... |
| 01:36:32 |
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AIG WAS NOT STRICTLY AN INSURANCE COMPANY, AND THAT IS ONE OF THE BIG PROBLEMS. INTEREST ON THESE... |
| 01:37:25 |
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I WISH I COULD HAVE SAID SO CLEARLY. I DO NOT KNOW HOW WE GOT HERE. WE THOUGHT IT WAS IMPORTANT TO... |
| 01:38:18 |
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REAL ESTATE, INSURANCE, BANKING, OTHER LENDING INSTITUTIONS, AND HOW YOU HOLD ACCOUNTABILITY WHEN... |
| 01:38:56 |
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EARLIER, I SAID I WOULD RECOMMEND EVERY VISITATION OF GRAMM LEACH BLILEY, AND THE CONCEPT OF THE SUPERMARKETS,... |
| 01:39:41 |
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YOU AGREE THAT MOST STATE INSURANCE LAWS PROVIDE A CAP ON THOSE GUARANTEED FUNDS, TYPICALLY IN THE... |
| 01:39:59 |
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NEW YORK IS ONE OF THE BIGGEST GUARANTY FUNDS. THE NUMBERS TO DESCRIBE OUR NEW YORK NUMBERS. -- THE... |
| 01:40:19 |
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MR. DAVIS? |
| 01:40:25 |
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DO YOU THINK ANYBODY OUGHT TO GO TO JAIL OVER THIS? |
| 01:40:32 |
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TO WHOM IS A QUESTION DIRECTED? |
| 01:40:36 |
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BOTH OF YOU. I AM NOT ASKING YOU TO NAME ANYBODY OR BUILD A CASE, BUT LOOKING AT AND RESULTS OF PUBLIC... |
| 01:40:51 |
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I DO NOT HAVE SUFFICIENT EVIDENCE TO HAVE AN OPINION ON THAT. AS A REGULATORY SOCIETY, SO TO SPEAK... |
| 01:41:47 |
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MR. TURNER, DO YOU HAVE THOUGHTS ON THAT? |
| 01:41:53 |
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YES, CONGRESSMAN, I DO NOT THINK YOU SEND PEOPLE TO JAIL FOR MAKING BAD BUSINESS DECISIONS. |
| 01:41:57 |
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I AGREE. |
| 01:42:01 |
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THAT HAPPENS DAY IN AND DAY OUT AND PEOPLE SHOULD NOT BE PROSECUTED FOR THAT. ON THE OTHER HAND, IF... |
| 01:42:26 |
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HOW ABOUT PEOPLE WRITING THE MORTGAGES? HE TALKED ABOUT THE FIRST TIER AND SECOND-TIER AND HOW IT... |
| 01:42:38 |
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NO INCOME, NO JOB, NO ASSETS. IT IS UNBELIEVABLE. WE WERE HARVESTING MORTGAGES AT A RATE THAT I THINK... |
| 01:42:56 |
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AIG GOT CAUGHT UP IN THIS. THEIR COMPETITORS WERE DOING IT. THEY STARTED A NEW LINE THAT THEY HAD... |
| 01:43:08 |
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THIS IS WHAT I WAS TRYING TO SAY BEFORE. WE RELY ON HISTORICAL DEFAULT RATES IN HOUSING THAT DURING... |
| 01:43:40 |
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IT WAS SIGNED JUST ON THE EVE OF THE 2000 ELECTION. IT PASSED CONGRESS. UNFORTUNATELY, I DID NOT ... |
| 01:44:21 |
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HAT ABOUT THE REAUTHORIZATION? THAT WAS REALIZED THIS YEAR. -- WE AUTHORIZED THIS YEAR. THE ATTACHED... |
| 01:44:59 |
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YES, BUT HAVE LEARNED A LOT THROUGH THIS PROCESS. |
| 01:45:04 |
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SHOULD THE SEC AND PROMISED AT STEP IN A LOT EARLIER TO DEAL WITH THE MARK TO MARKET RULES? |
| 01:45:13 |
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I DID MR. TURNER WOULD BE BETTER QUALIFIED TO ANSWER THAT -- I THINK THAT MR. TURNER WOULD BE BETTER... |
| 01:45:23 |
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MR. TURNER, DID YOU HAVE THOUGHTS ON THAT? |
| 01:45:27 |
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NO, I DO NOT THINK THAT CONGRESS SHOULD STEP INTO THAT. THE GAO FOUND -- ACTUALLY SUPPORTED GOING... |
| 01:45:59 |
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THANK YOU. CAN I ASK THAT UNANIMOUS MEMBERS OF THE ASKED TO SUBMIT STATEMENTS FOR THE RECORD? -- UNANIMOUS... |
| 01:46:16 |
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WITHOUT OBJECTION. |
| 01:46:22 |
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MR. TURNER -- I HAVE IT ON. CAN YOU HEAR IT NOW? THANK YOU. MR. TURNER, MR. TO ALLOWDINALLO, AIG... |
| 01:48:35 |
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AS YOU GO THROUGH THESE PILINGS, AND YOU LOOK AT THE -- GO THROUGH THESE FILINGS AND LOOK AT THE DISCLOSURES... |
| 01:50:41 |
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I AM NOT INFORMED ENOUGH ON THE COMPANY LEVEL TO HAVE A POSITION ON THIS. I DID SAY EARLIER THAT I... |
| 01:52:05 |
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PEOPLE WERE GAMBLING, NOT INVESTING WITH THE DOLLAR'S THESE INVESTORS HAD. |
| 01:52:11 |
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MR. VAN HOLLEN. |
| 01:52:15 |
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THANK YOU BOTH FOR YOUR TESTIMONY TODAY. MR. TURNER, I WANT TO FOLLOW ON MY COLLEAGUE'S QUESTIONS.... |
| 01:54:54 |
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THAT IS THE WAY I WOULD READ THAT. |
| 01:54:58 |
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THIS COMES ON THE HEELS OF THE FIGURE. 28 AIG POSTING OF LOSSES OF $5.3 BILLION -- THE FEBRUARY 28... |
| 01:56:05 |
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AS SOMEONE WHO HAS FOLLOWED GOVERNANCE AND READ MANY OF THESE TYPES OF PLANTSS, WHAT I WAS RUNNING... |
| 01:57:31 |
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WHEN WE INVEST IN THE U.K., WHEN WE INVEST IN THE NETHERLANDS, BUT WHEN WE INVEST IN THE U.S., WE... |
| 01:57:54 |
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THANK YOU, MR. TURNER. |
| 01:57:58 |
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A LOT OF WALL STREET AND TRADERS, AND AIGFP IS ANALOGOUS TO THIS IS PAID ON THIS BASIS. YOU CAN CREATE... |
| 01:58:23 |
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THANK YOU. |
| 01:58:29 |
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THANK YOU, MR. CHAIRMAN. I'M TRYING TO UNDERSTAND THIS IN THE CONTEXT OR TERMS OF HOW WE GOT ALL THESE... |
| 02:00:37 |
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THEY WERE ARGUABLY AT THE END OF A CHAIN OF EXCEEDINGLY OPTIMISM ABOUT THE VALUE OF THESE MORTGAGES.... |
| 02:01:54 |
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TWO THINGS WERE HAPPENING. A BUNCH OF PEOPLE ALONG THE WAY COULD KEEP OFFLOADING THE RISK DOWN THE... |
| 02:03:04 |
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I THINK WE'RE MIXING THE TERM INSURANCE POLICY. YOU MEAN PEOPLE WITH PROPERTY -- THE COMMON MAN AND... |
| 02:03:15 |
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NO, I'M TALKING ABOUT THE INSURANCE PRODUCTS. IT BEGAN THAT WAY. |
| 02:03:23 |
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MY UNDERSTANDING WAS THAT IT WAS ALWAYS OUT OF FINANCIAL PRODUCTS. |
| 02:03:28 |
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IT BEGAN AS A LEGITIMATE HEDGING AGAINST THE DOWNSIDE RISK OF THIS PARTICULAR SECURITY THAT YOU HOLD.... |
| 02:03:54 |
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AT AIG, MOST OF THE ACTIVITY IN CDS WAS COVERED NON-NAKED. DESERT TRADERS THAT WANTED TO FALL PROTECTION... |
| 02:04:38 |
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THANK YOU, MR. SARBANES. |
| 02:04:42 |
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THANK YOU VERY MUCH. I REALLY APPRECIATE YOUR TESTIMONY. MR. TURNER, A THING TO SAID THAT THE SEC... |
| 02:05:04 |
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YES, WHEN THAT GENTLEMAN WENT HOME AT NIGHT, HE COULD TURN THE LIGHTS OUT. WE HAVE GOTTEN DOWN TO ONE... |
| 02:05:15 |
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THAT INCLUDED THE 62 TRILLION DOLLARS CREDIT DEFAULT SWAPS? |
| 02:05:20 |
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THAT IS CORRECT. |
| 02:05:23 |
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HOW DID HE DO? |
| 02:05:27 |
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I SUPPOSE HE THOUGHT THE LIGHTS TURNED OUT, BUT DID NOT GIVE THE PROBLEMS TAKING CARE OF. |
| 02:05:33 |
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WE HAD A HEARING EARLIER ON ABOUT THESE TAINTED TOYS. KIDS WERE GETTING TOYS WITH LEAD PAINT. IT... |
| 02:05:51 |
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IN ALL FAIRNESS TO THE SEC, THE STAFF OVER THERE THAT I HAVE DEALT WITH OVER THE YEARS HAVE BEEN EXCELLENT.... |
| 02:06:14 |
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WAS THEIR SYSTEMATIC DEPOPULATED OF THE REGULATORY FORCE SO THAT IT WAS IMPOSSIBLE FOR REGULATION... |
| 02:06:39 |
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I THINK THERE HAS BEEN A SYSTEMATIC GUTTING OF THE AGENCY AND ITS CAPABILITY THROUGH CUTTING BACK... |
| 02:07:09 |
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YOUR TESTIMONY WAS REALLY SUPPORTED BY ERIC DINALLO, IDENTIFIED A NUMBER OF THINGS THAT HAVE CONTRIBUTED.... |
| 02:08:05 |
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UNEQUIVOCALLY, YES. I SUSPECT THAT IT FALLS SHORT. IF YOU REALLY WANT THE SEC TO DO THE JOB AND YOU... |
| 02:08:32 |
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THAT IS PAID FOR BY THE SEC TRANSACTION FEE. |
| 02:08:36 |
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YES, AND THE SEC COLLECTS MORE IN TRANSACTION FEES, SUBSTANTIALLY MORE IN TRANSACTION FEES, FROM ... |
| 02:08:48 |
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SOME OF US HAVE SUGGESTED THAT THERE BE AN SEC TRANSACTION FEE THAT WOULD GO INTO AN ESCROW ACCOUNT... |
| 02:09:05 |
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FROM A FUNDING PERSPECTIVE, I BELIEVE THE SEC SHOULD BE TREATED AS AN INDEPENDENT AGENCY, AND THAT... |
| 02:09:32 |
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MR. DINALLO, HOW ABOUT YOU ON THIS QUESTION OF GETTING THE PEOPLE TO GET THE JOB DONE? |
| 02:09:39 |
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I'M OBVIOUSLY A BIG FAN OF HIRING REGULATORS. THERE ARE HUNDREDS OF PEOPLE WHO DO WHAT THEY DO AT... |
| 02:10:08 |
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THANK YOU. AND NUMBER OF COMPANIES WILL PARTICIPATE IN THIS BAILOUT PROGRAM. DO YOU BELIEVE IT WOULD... |
| 02:10:37 |
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THE PROVISIONS BETTER IN THE LEGISLATION DOES, UNDER WHAT I WOULD CONSIDER, LIMITED SITUATIONS, ALLOW... |
| 02:10:56 |
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DO WE HAVE ANOTHER CRACK AT THIS? THIS WAS A GUN AT OUR HEAD PIECE OF LEGISLATION TO AVERT A CATASTROPHE.... |
| 02:11:16 |
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YES, THE CLOCK BACK PROVISION, THE SEVERANCE PROVISION, AND COMPENSATION. THEY COULD ALL BE MUCH STRONGER... |
| 02:11:25 |
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MR. DINALLO. |
| 02:11:29 |
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I THOUGHT, AS DID A GOOD JOB THE FIRST TIME AROUND. I WOULD HAVE TO SEE SOME KIND OF PROPOSAL. |
| 02:11:35 |
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THANK YOU. |
| 02:11:37 |
|
THANK YOU. |
| 02:11:44 |
|
MR. DINALLO, I'M ONE OF THOSE THAT POLICE THE REGULATION OF INSURANCE COMPANIES SHOULD BE AT THE STATE... |
| 02:12:26 |
|
YES. |
| 02:12:30 |
|
THE TAXPAYERS KNOW OWN AIG. THE GOLDEN BOY OF THE CASINO IN LONDON HAD HIS COMPENSATION VERY ATTRACTIVELY... |
| 02:14:11 |
|
YES. IT IS $1 MILLION A MONTH. |
| 02:14:17 |
|
EXCUSE ME. THANK YOU FOR THAT CLARIFICATION. |
| 02:14:24 |
|
IF THE CONTRACTS WERE AN OPERATING COMPANY THAT WE'VE BROUGHT INTO REHABILITATION, WE WOULD HAVE AN... |
| 02:14:42 |
|
THE FANCY CONFERENCE IN CALIFORNIA COULD HAVE BEEN STOPPED UNDER THOSE CIRCUMSTANCES. |
| 02:14:50 |
|
YES, ALTHOUGH WE ARE TALKING ABOUT A HOLDING COMPANY ACTIVITY. |
| 02:14:59 |
|
MR. TURNER, KNOWING WHAT WE KNOW, KNOWING THAT THE HEAD OF THE COMPANY IS GETTING $1 MILLION A MONTH... |
| 02:15:17 |
|
THERE'S ALWAYS THE LEGAL QUESTION OF WHEN YOU CAN OR CANNOT DO. UNFORTUNATELY, ONE OF OUR PROBLEMS... |
| 02:16:18 |
|
ONE LAST QUESTION TO YOU, MR. DINALLO. YOU DETERMINED TO TAKE $20 BILLION FROM THE INSURANCE COMPANY... |
| 02:16:36 |
|
WE DID NOT ACTUALLY DO IT, BUT WE OFFERED TO DO IT AS PART OF THE HOLISTIC SOLUTION. WE DID BELIEVE... |
| 02:17:50 |
|
THANK YOU. |
| 02:17:55 |
|
MS. WATSON. |
| 02:18:00 |
|
MR. CHAIRMAN, THANK YOU FOR THIS OPPORTUNITY TO HAVE THE PUBLIC LISTEN IN AS WE TRY TO UNSCRAMBLE... |
| 02:19:02 |
|
YES. |
| 02:19:06 |
|
AS PART OF THE COMMITTEE'S INVESTIGATION, WE REVIEWED INTERNAL MINUTES FROM AIG'S AUDIT COMMITTEE... |
| 02:21:19 |
|
YES, GOING BACK INTO 2007, THERE'S OBVIOUSLY SOME QUESTIONS ABOUT WHETHER THE COMPANY AT A TIME IT... |
| 02:23:21 |
|
I WOULD LIKE TO MR. DINALLO. |
| 02:23:30 |
|
I THINK THAT WOULD CERTAINLY GET MY ATTENTION. WHETHER THEY WERE RECTIFIED OR NOT, I CANNOT SAY. I... |
| 02:23:50 |
|
THANK YOU VERY MUCH. |
| 02:23:51 |
|
THANK YOU. |
| 02:23:54 |
|
MR. SHAYS. |
| 02:23:59 |
|
MR. TURNER, FANNIE MAE HAD ASSETS DRINKING AT #TWO. ONLY CITIGROUP HAD A LARGER ASSET RANKING. FREDDIE... |
| 02:24:40 |
|
I THINK IT WAS FLAT OUT WRONG. SOMEONE WHO IS SELLING THAT MUCH IN THE SECURITIES MARKET AND IN TRADING,... |
| 02:24:59 |
|
WOULD YOU TAKE ISSUE WITH FEDERAL CHAIRMAN GREENSPAN'S WARNING ABOUT THE GROWTH OF FANNIE MAE AND... |
| 02:25:23 |
|
AT THE BEGINNING OF 2007, I THINK THESE TWO INSTITUTIONS WERE DOING 35% OF THE TOTAL MORTGAGE LOANS... |
| 02:26:05 |
|
AND WE HAD A WEAK REGULATOR. THE FEDERAL HOUSING REGULATORY FORMAT IN 2005 UNDER THE PREVIOUS CONGRESS... |
| 02:27:20 |
|
THE QUESTION IS THEFAIR. FIRST OF ALL, I GO BACK TO WHAT CONGRESSWOMAN MALONEY SAID THE BEGINNING.... |
| 02:28:08 |
|
IN THE BILL THAT WE SENT TO THE SENATE, WE HAD A CLAWBACK PROVISION TO BE A WILL TO GO BACK AFTER... |
| 02:28:21 |
|
I'M A BIG SUPPORTER OF THE CLAWBACK. WHAT WAS IN THE BILL WAS EXCEEDINGLY BLEAK TO THE EXTENT THAT... |
| 02:28:46 |
|
THANK YOU, MR. TURNER. |
| 02:28:50 |
|
THE GENTLEMAN YIELD BACK THE BALANCE OF HIS TIME. I AGREE THAT THIS SHOULD NOT BE A PARTISAN ISSUE.... |
| 02:31:40 |
|
WILL THE GENTLEMAN YIELD FOR A QUESTION? |
| 02:31:44 |
|
YES, SIR. |
| 02:31:48 |
|
I WANT TO COMPLIMENT THIS COMMITTEE FOR THE WAY THEY HAVE ASKED THE QUESTIONS. WHAT IS TROUBLING TO... |
| 02:32:22 |
|
WE WILL HAVE TO LOOK OF THE SCHEDULE. WE HAVE THE HEARING YESTERDAY ON LEHMAN, WHICH MANY PEOPLE SAY... |
| 02:33:25 |
|
WE LOOK FORWARD TO WORKING WITH YOU ON THAT. I THINK FANNIE MAE AND FREDDIE MAC ARE HUGE PIECES OF... |
| 02:33:48 |
|
THANK YOU. ONE OF THE REASONS WE HAVE NOT SCHEDULED THAT IS THAT THE COMMITTEE OF JURISDICTION JUST... |
| 02:34:11 |
|
WE 360 TO FREEZE JURISDICTION OVER EVERY ACTION OF GOVERNMENT FOR INVESTIGATION. WE HAVE NO JURISDICTION... |
| 02:34:34 |
|
I DO NOT THINK ANYBODY WOULD DENY THAT. |
| 02:34:36 |
|
WE HAVE OVERSIGHT JURISDICTION. I THINK THAT IS WHAT THE GENTLEMAN FROM CONNECTICUT WAS REFERRING... |
| 02:35:03 |
|
THEY WILL BE IN THE RECORD AS WELL. |
| 02:35:05 |
|
WITHOUT OBJECTION. THANK YOU VERY MUCH. WE WILL MOVE ON TO THE NEXT PANEL. WE WILL BREAK FOR SUFFICIENT... |
NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.
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