Steve Pagliuca

Make investments today to ensure that -- save money down the road. You know that's going to be. Our child the American people realize what's at stake -- this isn't just one loaded stimulus package this isn't just a bloated appropriations bill this isn't just that three point six trillion dollar budget followers broke barriers her blinds off welfare now call they bankruptcy in the every thirty -- who wrote this for. -- People like pick up and it was just what that was that would fit ballclub get through all those big and round the world. And -- and every American is that what we had to go to work every -- we have less effect you know. I want to talk about what they -- behind Vonage time to -- further and small room.

I'll send your responsibility 400 words I need for five hole he failed sticking your goals -- 6172666. Figured sixty years just come on this program what that little debate you tell me how -- I am. You can convince the rest of the American people don't agree with you how wrong we all all our column program amber tugged Feinberg.

Did you Davis.

There is. Does -- that I guess did you do -- do I think maybe that was harassment I was saying I thought it was a stunning can't tell my head of the same old story the stuff it's hard to sell. Good morning beautiful Friday now beautiful weekends coming our way -- time to break out the barbecue -- little -- You know will be great habitat at that point. It can't count on the -- itself to what they do the end. And it's and talked about 11 spring really begin to -- fourth to put on the game was the game follow all the action. And hopefully see them win another title. Yeah right well when the warm weather comes I usually go on into the driveway and just start jamming that ball down into the whole problem for you you're you're gonna go to secure level job I thought I'd love those adjustable -- displayed above -- why. I'll without the labeled hate Steve -- you can joins us every Friday and it looks like he is he's here we're connected -- value go from the Boston Celtics on our managing partner power is if Harry you tell ya doin' great. What an interesting week it's been a week since we talked and no absence of news Steve on the economic and business front. Can we may be -- with. He -- take on CD at Citigroup the bank that never sleeps is now why. Well was it dipped below -- a dollar a share. A lot of time at the prizes is worth more than a dollar -- I suspect so absolutely and the fact that I heard somebody said a general -- General Electric thing. -- the price of a share you can buy two -- their like ball just a.

A yeah that state level we've sent to hear yeah. You ought. -- category city in let's say AG -- two of these banks that are kind of too big to let fail. And as we talked a couple that we talked for ten weeks now but the fact that. There are three things the government's going to do in the first what does -- wants to stabilize the banking system and my concern is. You know doing that is a little bit like landing that plane in the Hudson between two bridges. And try to do that. Do the stimulus. Change regulations. Get help accurate seems like -- very grateful player I think those are admirable thing to do but it's a very full plate. But the banking system as part of commerce here. And if the patient and -- I think we've got to stabilize the heart first. So he stepped back from this. You know that there their budget things they should do for the first. Categorize all the good bank JPMorgan seems to be resolved thank you doing in there. Their banks that are too big to fail that's an insurance companies it's -- city. There's a third set of banks that are smaller that you six -- flexible capital injections. In his fourth said the bank's. That oughta just be merged or put out of business because is it just costs too much to fix some bullet goes -- Those those are going to be there's going to be some regional banks and and smaller. Smaller banks that that made bad investments I think they're going to be absorbed into the things like -- via. That the large bank at California Washington Mutual question mutual up you know observed by JPM. Those things have -- done. On on city that the bank this too big to fail AG's insurance of this too big to fail and the issue there is I just think people don't know the stress testing right now they don't know what the assets liabilities article the book about it that and then just put enough capital -- to to make it work.

Born you say they're too big to fail that does that mean they couldn't be dismantle you could take a chunk of what they've been a number stories in the news our last couple weeks about regional or or local savings and loans and other. Banks that are tied to communities that are followed good values and know what they're doing couldn't take pieces of the stuff and and spin it off to banks who are competent and and have good management values.

Willis is not that simple specific example things up like -- Which is in incredible examples of financial crisis. You know AIG was they had a huge insurance company regular interest of these 52 billion revenues of insurance side business -- with completeness. Profit. It like business of 54 billion anything to profit. They had at the -- five point six billion of revenue and ability to profit and then -- the small Financial Services Group in London that you know -- very very little revenue but. That group ropes insurance credit default swaps. And they wrote 600 billion of credit default swaps and 57 billion of that. Went into. These sub prime mortgages and basically credit -- up to simplify it is an insurance policies so it go all the facts you know bought sub prime mortgage. Two billion dollars package they can get insured by AG's for putting five -- dollars down and and ability to 2000 quarter. Now that are under -- dollars -- fault that the community has to pay it. Well AG had dissident unregulated subsidiary so they don't have the money to pay it. There for the government now I think it's but it totals -- over 150 billion AIG. To basically. You know pay off is -- but why should they do that. Well -- AG couldn't pay it off and Goldman's got to write it off for JPMorgan world that banks that bought the insurance counting on it. And therefore you you get a domino effect to toppling.

And you get a total cascade had had at that point it's it's amazing what that little London office has done -- it's just. It's if it is catastrophic and other word is over used these days but I think it's an appropriate. -- in in this particular case so it's so you think Sid well let me but I want to cut of -- has Deco society.

Yep -- city's diverse group businesses yes they can sell some those businesses although. It's up at a bad time it's definitely a time that a self businesses and in the in the peace. Big recession. So I think they've got to take -- patient approach figure out what capital testicle and put that capital and and then over time the government can get his money back both the AG and the city's situation. That it's -- money back city is a little more you know open taken -- understand and AIG AIG is is actually more simple problem just fixing the credit to. Default swap issues the rest of businesses are regulated -- and -- good businesses. The -- more complicated because. You know part of their portfolio that mark to market part of Brooklyn they don't and they hold a lot of commercial real estate debt and you really don't know what that's -- and -- it stressed that the.

But is there enough money to pump into -- to all these banks it in and other institutions that the government wants to prop up. And keep them all going we've seen AIG come back to the table we've we've seen the that continual I mean it was a short term thing in the fall with a pumped in money. That didn't do the job their company more money is there going to be an end to this.

That's the critical question. And I think there has been -- money because. If you if you let that the number we're really talking about the large institutions and agent city year are the two major ones. I distinctive ripple effect would be worse than not for the money and and essentially there is enough money because essentially there -- money from the future. To stave off to these problems but hopefully they can land that plane in the successfully it's very difficult to they've got great people looking at that. And they're generally other attractive the issue to me is. I don't know how much capacity at the white out was a business I think what they're looking at way too many things to do you have to quickly. The capacity of doing this plus doing health care posted things so rapidly seems tough to me.

Steve this is GM just -- another company's GM too big to fail.

I don't I think into different situation given that GM is not is fundamental to the the banking system. And a GM. It is really. How do you kind of -- structure that theory they're basically doing a prepackaged restructuring GM right now. If that doesn't happen to go to sub chapter proceeding you know do more rapid you know the bankruptcy code restructuring. So sit in the not too big to fail you will have to fail unless they do their own prefecture structure.

And how about guide you mentioned that you think the Obama people have really capable people working on this multitude of problems. What's your confidence level and Tim Geithner.

Every everyone I talked about -- great thing to say about him he's he's very smart banker. He's the right into the job you know they've had issues of filling this sub jobs which concerns me they've got to get people their help them. If it's a full time job just figuring out what they -- do -- Citigroup and AG and it not to mention the other the other banks that they go look at. And the whole package as it was on top of that so. Again a bottle at an office -- about an office for six weeks and and when six weeks is not a long period of time I think unfortunately. The American people but -- we get this great guy here he's pragmatic and his great program. But this has been a problem ten years in the making and he -- solve that problem overnight.

I've been trying to say that to Todd but he still wants to have the public hanging that's not fair.

Is it did that mean it's really it's it's again I think we've used the analogy of as saying he unity gain a pound and -- out of college for thirty years also and you've been there before you know overweight. And you can't take that weighed up in the months in pricing taking a year and then some lifestyle changes in and that's what's going to have to have this economy.

see before you go bring us it is the Celtics. Well routing rousing victory in majors in the night the Braves game the other night of the truth the truth was back in full force Paul Pierce and this is another amazing well here's type game. 1214. At the buzzer beater to win the game at the end there. The guys are really you know rally playing great without Kevin Garnett to waiting for his return respectively. And he looks like he's -- very well be back soon.