Brad Setser

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Paulson, not Evans … but don’t look here for an explanation of what it means

by Brad Setser
May 31, 2006

The Goldman takeover of W's second term (Bolton, Paulson) continues …

I'll leave it to you all to figure out.

My timing isn't great, but I am taking a few days off — and won't have sustained internet access.  I'll be back full time on Monday.


  • Posted by Gcs

    ghostly guest :

    “Just don’t read his posts anymore – no one else does”

    well i read emperor chiang …

    of course
    no one reads me either

    we’re both …ignore able ‘idiotic’ ‘flamers’
    i guess

  • Posted by Ho Lee Fook

    The Plunge Protection Team?….Alien Abductions?….Area 17?….Little Green Men?….The Loch Ness Monster?…..Anti-Zionist Conspiracy?…..? DChiang, oh puhhleeease, do spare us all!!

  • Posted by Dave Chiang

    Reply to Ho Lee Fook,

    Just as a reminder to Clinton-Rubin supporters, the American people voted out twice both Clinton cronies Al Gore and John Kerry. Perhaps it had something to do with the immoral and unethical conduct of Bill Clinton in the Whitehouse. At least George Bush won’t ever be caught with his pants down molesting a college intern like Monica Lewinsky. Why was it that the American newsmedia gave Bill Clinton a free pass on the Monica-gate scandal? Should not Bill Clinton have faced criminal charges; Not to mention various corrupt Whitewater land scandals that led to a taxpayer bailout of a failed Savings & Loan. Bill Clinton totally disgraced the office of the Presidency of the United States.


  • Posted by Stormy

    Oldvet hit the nail on the head:

    It is hard, if not impossible, to tell the interests of corporations from the political realities.

    I used to be a fan of Clinton and Rubin until I started to look at the results of NAFTA. Whose interest was really played here?

    As an interesting aside, I suggest that Clinton fans take a look at the documentary “Big Sugar.” Clinton zipped up his pants to take a call from sugar execs who were complaining about taxing them to clean up their mess in Florida. (Gore, by the way, suggested the tax.)

    Mnc’s and tnc’s call the shots. It is quite amazing to see how politicians on both sides know exactly how high to jump. Occasionally, they have to posture a bit for the public—Schumer does that quite well–, but as soon as the public loses focus, they are back to the old games.

    I do disagree with Oldvet that these same corporations are now calling for a weaker dollar. They have a problem. The problem is: Things have become so imbalanced that there is no real solution—at least for the U.S.

    If you think those corporations are coming home after moving even their R&D labs abroad, guess again. Lately, they have been moving state-of-the art factories abroad.

    Short-term gain has its problems. The big boys will play buy and sell at the global level—hoping to catch every dollar squirt. There are few squirts left.

    As for Clinton’s success in the 90’s: He lucked out with the dot-com boom. IT hit big time in the 90’s—and its origin was the U.S. Clinton benefited; but he also set the conditions for the actual IT business constructs to move abroad, leaving the U.S. economy increasingly empty. Check out Dell…or any other U.S. IT construct. Off shore.

    If the fall comes—and I hope it does not, but I suspect it will be big if it occurs–, I for one hope these mnc’s and tnc’s are shrunk to size and start behaving not as if they were themselves countries.

  • Posted by MTC

    Gcs –

    You are right to chide. I overreacted.

    Still, we also have to think about the occasional readers, the ones who might see a citation in the Financial Times or the Economist and come over for a look. While the blog post is the cited material, many such visitors will read the comment thread as well. Such readers would not know the histories behind the handles.

    Dr. Setser has shown great patience with the delete button, even in the face of personal insult from anonymous sources. When one considers how much of his reputation and personal fortune (not to mention his sweat and his passion) are likely tied up in this blog, one cannot help but feel admiration for his forbearance.

    At the risk of being tenditious, a small comment thread group is a commons, not a market. Noxious commentary is not driven out by competition. It lingers. It is indeed archived. Either one shames the perpetrator into cleaning up after himself or herself, or the mess just lies there, degrading everyone’s experience.

  • Posted by Gcs

    mtc very thoughtful response

    let us agree to disagree

  • Posted by Joseph Wang

    I’m upper middle class, but I do have a lot of admiration for people who work like hell in order to get filthy rich. This applies to Wall Street investment bankers, people in the sweatshops and restaurants a few blocks away in Chinatown, or someone who is willing to risk it all crossing the Rio Grande to work in the United States.

    It’s the same basic dream and the same basic sacrifice.

    There is nothing wrong with being rich. There is nothing wrong with wanting to be rich. The question is whether or not the social institutions exist to convert raw greed into something more or less socially productive.

  • Posted by Joshua

    “The question is whether or not the social institutions exist to convert raw greed”

    You assume that it is greed which drives successful people. In the vast majority of cases it is not.

  • Posted by Joshua

    “Either one shames the perpetrator into cleaning up after himself or herself, or the mess just lies there, degrading everyone’s experience.”

    Ain’t that the truth.

  • Posted by Guest

    MTC – thought your comments were a welcome think piece about standards and a reminder of the opportunity Brad/RGE offers. It would be unfortunate if abuses necessitated registration, a cover charge and the enforcement of restrictive rules.

    Joseph – I associate greed with the confiscation and concentration, rather than creation of wealth. Never socially productive. Usually results in extensive, socially unproductive collateral damage. Impossible to harness. Expensive to rein in. If Paulson’s prime motive is greed, that’s a problem.

    So, attempting to ease back to the central topic ‘Paulson, not Evans … an explanation of what it means’, – as Paulson and Goldman Sachs are extremely interesting, along with the circumstances which prompted Mr. Bush’s nomination, perhaps a bit more discussion on this topic is warranted. Without looking too much like a conspiracy theorist, but thinking about OldVet’s questions, might be worth noting that Mr. Thain is also a Goldman Sachs person:

    “…Mr Thain, 50… took a $16m pay cut to join the NYSE. He worked to restore confidence in the Wall Street institution, implementing reforms that had been put in place by the board… He took the NYSE public and bought the Archipelago electronic trading system, signalling a dwindling role for open outcry. Now he is preparing for his biggest move yet: the acquisition of Euronext. Before becoming Goldman’s chief operating officer, Mr Thain had been president and oversaw the European operations of the investment bank…”,,1789532,00.html

  • Posted by OldVet

    Hi Stormy and Guest, don’t get me wrong – I don’t think US multinationals plan to move factory activities back to the US. However I do think there’s been a change in the popular thinking of executives and brokerage touts that earnings are more important than balance sheets, as tools to selling more stock and bonds to the investing public. It’s a herd movement in response to marketing strategies. A “weak dollar” will make those foreign-earned sales and profits look all that much higher, and drive the stock market.

    Ultimately, too, a weaker dollar will help cut the import bills and change the calculation of whether production makes sense in the US again. If the dollar falls far enough, the new answer could be “yes.” The wheel never stops turning, in the long run.

    My questions go more to the identity of interest between US political parties and US multinationals. If US multinationals insist, for whatever reason, on a “strong dollar policy” then we risk serious social disruptions and a fracturing of the society. Which will benefit no one, anywhere. This is expecially true at the moment, with contruction employement falling as the housing market cools, and the sentimental but mindless push for greater immigration.

  • Posted by Gcs

    i like your straight forward
    use of greed and rich
    joe w

    no shilly shally

    its up to society to tame and channel
    its strongest spirits

    for me
    the self oriented agent
    needs a few internal controls
    beyond rational expectations

    many introjected “governors ”
    to me atleast
    necessary features of any viable social system

    my hunch
    given the total externalization
    of all agent constraining elements
    your proposed “number One priority” type system
    is an unintentional Rx for a leviathan state solution

    but at any rate

    you’re a thinking fellah
    lets agree to disagree
    as to this division of duties
    between self and society

  • Posted by Gcs


    sorry if i’ve contributed
    to the fraying
    of the thread here

    i see brads vac as
    free swim time …sort of anyway

  • Posted by Guest

    Gcs – didn’t intend to come across sounding like a cop and not remotely qualified to do so! I’m sure that my contributions aren’t appreciated by all. Obviously can’t speak for Brad, but think it’s a good idea that a bit of self-regulation happens every once in a while.

    Perhaps a translation issue in that Joseph’s definition of ‘greed’ may be more like our definition of ‘ambition’? I would agree that Paulson has to be a very tough, ambitious guy to be where he is right now. But I don’t think that automatically means he’s driven by greed.

  • Posted by Gcs

    old vet
    i agree with your line completely

    multi nationals at least today
    dictate forex policy for both major party cores


    its interesting isn’t it

    strong or weak

    up or down

    strong dollar good for multi nat fdi
    and re entry of foreign built
    multi nat trade products

    weak dollar good for ddi
    especially with repat foreign earnings

    domestic import substitution and export opportunity

    so which “direction ” is better
    stronger or weaker depends…

    can’t be solved analytically


    it helps to cut the two foreign worlds out there
    apart however

    into a north and a south
    or as brad and most prefer a core and a periphery

    a look at the record over the last 100 years
    north/north core/core international flows
    have a definite back and forth pattern

    such that the relative strengths
    of say the euro and the dollar
    show some fairly obvious
    two way dynamics …

    but that is one system

    the north /south core /periphery system

    has a deeper less “chaotic” pattern
    of booms and busts

    the north to south direction of fdi is steadyif quite variable in amount

    where as the portfolio moves
    are both ways very dynamic and lets face it
    often overly disruptive maybe even destructive

    more then just colored
    by considerations
    independent of necessary real developmental adjustments

    and its always
    unlike north/north forex

    a very and perminently tilted table

    north over valued south undervalued

    maybe the tilt gets adjusted some

    but never up to a level
    let alone an opposite tilt


    ps :

    to realize the real value of a south direct investment
    the multi nat
    must await
    till the time like the koprean won when a particular
    economies makes the transistion to a north status
    as i contend necessarily the rmb must …eventually

  • Posted by Gcs


    listen i hope i got the right guest here

    your stuff is great

  • Posted by c roast

    I don’t know what
    drives Rubin & Paulson

    surely they are good dads
    don’t kick the cat
    take out the trash
    recycle the WSJ

    tee-off at 9 every Sunday
    use the golf cart
    f**k the caddies
    share the Weltanschauung

    very agreeable foursome
    tee it up in the rough
    just us chickens
    playing by our rules

    other guidelines for the unwashed
    they paid their dues
    always gave a mulligan to their sponsor
    part of the apprenticeship

    now they get to write the rules
    Hey! Were a nation of laws!
    and a little celebrity doesn’t hurt
    just us chickens

    how dare you call it
    crony capitalism

  • Posted by acr

    re: “We’re going to have to start a new storyline Political Risk threats to Economies…”

    Aren’t politics and economics joined at the hip – and political risks to economies something that’s been happening long before the whole idea of ‘America’ was born? I’m interested in the ways contemporary capital markets and very private HNWIs may be affecting the current natural order (along with feasible and politically correct approaches to translating it all into accounting terms, economic language, FX correlations…).

    “…as Pitt certainly knows, the problem isn’t that corporations were driverless… It was only when the SEC started asking questions that the lawyers came up with the “driverless” claims. What companies need is one clearly-disclosed driver, who will take responsibility for the bad outcomes along with the good…”

    Not to imply it’s all evil. Still thinking about the central topic, if the HNWIs are all philanthropists, along with the man nominated to be the next Secretary of the Treasury, then perhaps many jobs and public goods will be created as they re-administer their riches, whether gained through greed or ambition.

    “HANK PAULSON… plans to sell as much as $800 million (£427 million) of investments and put the proceeds in a blind trust that will be used in part to make large donations to charity…”,,5-2207539,00.html#cid=OTC-RSS&attr=Business

    How effectively that system works, obviously, remains to be seen.

    Gcs – thanks

    I’ll be ‘acr’ going forward, as I am taking up far to much space to be a guest anymore, especially on this topic.

  • Posted by Gcs


    your prime rib
    makes my roast
    look like pot

  • Posted by OldVet

    Gcs and acr, usually politics and corporate interests work together, but there are those times when they don’t, rare as those times may be. As a little guy, I love trying to figure out the interests that cause such strange politics. And more than that, try to see the trends, for fun and profit, in my old age.

    If we’re not there yet, we’re getting close to a tipping point in north/south FX and FDI terms of “trade” that may be bringing Multi’s into conflict with important political forces in China, LatAmerica, Russia. Have you guys been following the complicated and growing web of deals that bypass the US? Business is swirling between Russia and India and China and Brazil in new ways that leave the Good Ole Boys out of the picture. My gut says Multi’s are going to have to find a new model, since business power is shifting “south”. This leaves US pol’s twisting in the wind, having delivered us up on the cross of the strong dollar.

  • Posted by Gcs

    old vet “the complicated and growing web of deals that bypass the US”

    if you mean us multi s
    i agree

    and the flag follows the us multi s

    so what to do ????
    or is it already being done

    countering hugo and positioning around the russian perimeter

    and pitting vietnam and japan and taiwan against the prc
    and hustling india and and and

    a weak dollar vis a vis the south forex isn’t in the cards
    so far its strictly jockeying agin the yen and euro

    maybe instead of a new north south forex ratio
    better a massive south portfolio melt down
    like in 97-98

    hey just guessin’

  • Posted by alan g

    Ahh, the quandry of mnc’s, plutocracy and good citizenship, or perhaps just the “zen” in citizenship. How much social wellbeing or nationalism can be ascribed to the various central banks and mnc’s?Ahh, the quandry of mnc’s, plutocracy and good citizenship, or perhaps just the “zen” in citizenship.

    How much social wellbeing or nationalism can be ascribed to the various central banks and mnc’s? Is it just precise localization, i.e. “anything to keep my job/government position”,or as the über zen master Gcs (much respect sir) commented, the good old boy golf network? A blending perhaps… until the fertilizer hits the ventilator, then it’s every ceo for himself.

    Regardless, forex rebalancing is a “mexican standoff” as they say. Hmmm, anybody see the end of Tarantino’s “Reservoir Dogs”?

  • Posted by Joseph Wang

    “Success” is sort of an illusion.

    Too much greed is a bad thing, but I’ve seen huge amounts of damage both social and personal from people who weren’t greedy enough. This includes everything from the Cultural Revolution to the grad student (or for that matter the minimum wage restaurant worker) who doesn’t feel that it is “right” to demand that they get a decent wage.

    China had a system in which the first few decades were talking about “selflish devotion to the socialist paradise” and then the second few decades was “to get rich is glorious.” The second works a lot better.

    Note that this isn’t necessarily “pro-management.” My “philosophy of greed” says that if labor wants to band together to collectively bargain for more money, that’s a good thing. It’s all a matter of balance.

    One basic corporate principle of Goldman-Sachs (and they aren’t shy about talking about this) is “long term greed.” I think it is a very good principle.

    Part of the reason that I do think that greed is underrated, is that its pretty easy to control/influence a greedy person. Just point out to them that what they are doing is self-destructive. Greedy people also tend to be open minded. If you give then an argument that they are being self-destructive, and what they are doing *doesn’t* maximize their self-interest in the long term, they tend to listen.

    People that are overly motivated by principle tend to be much less amenable to reason.

    Greed (the long term, self-examining type) is good.

  • Posted by acr

    Joseph – and I say this with the greatest respect as my language skills do not extend to fluency in Mandarin, but I was raised speaking ‘English’ and I don’t think that the concept of ‘long term, self-examing greed’ exists in the English language. If you can find direct quotes from the likes of Paulson – specifically praising “long term greed” – it would be most helpful if those could be provided.

    It’s my general impression that systems of “selflish devotion to the socialist paradise” were written and brutally enforced by greedy people.

    Thinking about a link ‘psh’ provided earlier in this post, I associate greed driven systems with this sort of thing:

    “…It resembles a scene from another era, but this is one of the world’s best-performing stock markets… Welcome to the surreal world of Zimbabwean economics… Zimbabwe has the fastest shrinking economy outside a war zone, with unemployment pushing 80% and inflation a rampant 913%… “It’s quite embarrassing because the exchange is supposed to mirror the reality of the economy,” said Emmanuel Munyukwi, the institution’s chief executive. “We have benefited from the distortion of the market.”…Analysts say the stock market boom masks the fact that thousands of businesses have gone bankrupt, slashing exports and halving the size of the economy since 2000… President Mugabe… has blamed the crisis on successive droughts which hit commercial agriculture, and western powers who “punished” Zimbabwe for taking over white-owned farms. Critics say the fault lies with his Zanu-PF government, which gave land to loot-minded cronies… and then printed money to cover budget deficits – triggering inflation which some say is close to 2,000%… The impact on living standards has been catastrophic. About 4.6 million people rely on food aid; children miss school because their parents cannot pay fees and hospitals lack basic equipment and medicine – handing a death sentence to those with Aids and other treatable diseases… Perhaps the biggest winners are senior Zanu-PF officials who have helped themselves to the best farms and assets… The reserve bank governor, Gideon Gono, is said to be building a huge mansion…”,,1760715,00.html

    Only to suggest that “to get rich is glorious” may work in the short term, but if the global polarization of wealth and consolidation of HNWI philanthropists continues at its current rate, we may all see the return of “selflish devotion to the socialist paradise” sooner than we would like to think.

  • Posted by Aenima

    Greed is the nature of the universe. It devours.

    The Oceans are hungry for land.

    Learn to swim.

  • Posted by OldVet

    acr, we may find ourselves engaging in the “selfish devotion to the plutocracy” before anything else. I’m already on my knees, casting about, figuring how to tie the shoelaces of these corporate behemoths, while pretending obeissance.

  • Posted by Guest

    Hmmm “earned an English degree at Dartmouth”

    “…”Volatility is our friend,” Hank Paulson says serenely. “If it wasn’t for volatility, why would you need Goldman Sachs?… But with the volatility comes opportunity… Internet trading of ever more financial instruments is spreading inexorably–stocks now, but soon all kinds of bonds and agricultural and financial commodities and, one day, everything. Driving Paulson’s huge investment in hardware, software and communications links is his belief that technology will fundamentally change the way securities are traded–and drastically increase the variety of what is traded… Genetically driven to grow and defined by an ethos insiders call “long-term greedy,” this firm wants more. It is conceivable that Goldman’s trading systems could siphon off a sizable enough chunk of global traffic to rival, say, the New York Stock Exchange… Hank Paulson sits on the board of the New York Stock Exchange. Some people say his role in abetting Archipelago angers Richard A. Grasso… Today Goldman sports one of the most sophisticated electronic pricing engines in the world. The firm is the only one allowed to set its own reserve requirements–rather than have them imposed by regulators–for highly volatile derivatives trading…”

  • Posted by Dave Chiang

    Goldman Sachs has Gained Too Much Political Power
    By Matthew Lynn

    June 5 (Bloomberg) — Forget “The Da Vinci Code.” If you want to get to grips with a real conspiracy, take a look at all the Goldman Sachs Group Inc. staffers taking over important economic positions around the world.

    U.S. President George W. Bush has just appointed Goldman Sachs Chief Executive Officer Henry Paulson as his new Treasury secretary, one of the most powerful economic jobs in the world.

    “Goldman is plugged into the powers that be in the U.S.,” said Patrick McGurn, executive vice president at the Rockville, Maryland-based Institutional Shareholder Services. “There are going to be areas where the interests of the Treasury Department and the U.S. and Goldman intersect. On balance, it’s got to be a plus for Goldman, especially outside the U.S.”

    The polite word for that is “network.” The impolite word is “cronyism.”

    Next, Goldman Sachs managers are likely to have a world view dominated by trends in financial markets. In the last decade, that might well have been right. The economy was grappling with globalization and market liberalization. Yet the next 10 years may be a period in which asset- and commodity-price inflation are the main focus. That would require policy makers who weren’t groomed on a trading floor — and you won’t find them at Goldman.

    Third, the concentration of power is starting to look unhealthy. A clan of former senior Goldman staffers is now in a position to help steer the dollar, the euro and the pound.

    Lastly, there may be the potential for conflicts of interest. For example, policy makers might need to think whether oil speculation has to be brought under control. And Goldman is a participant in that trade. Would a former Goldman manager hammer one of his old firm’s most profitable lines of business? And would they form an objective view on whether hedge and buyout funds are amassing too much influence? Maybe not.

    – Bloomberg News Agency

  • Posted by acr

    I noticed Lynn’s piece as well, but it was this that caught my attention:

    “…In January, Goldman Sachs Managing Director Mario Draghi became the new governor of the Bank of Italy. In Britain, David Walton, who was chief European economist for Goldman in London, last year joined the Bank of England’s Monetary Policy Committee, which sets U.K. interest rates. In Canada, Mark Carney, formerly managing director in Goldman’s Toronto office, is now a senior official in that country’s Finance Ministry. It’s not just economic jobs, either. Gavyn Davies went from Goldman to become chairman of the British Broadcasting Corp. for a few years… There needn’t be anything sinister about that — though financial conspiracy theorists could have a field day with some of the connections. The issue is that they are likely to have a uniform set of preconceptions and prejudices… ”

    I thoroughly disagree with Lynn’s assumption that networks and cronyism are one and the same. Networks are the backbone of a knowledge based economy in which no one is really an independent actor, but largely dependent on their capacity to pull together the best team to get things done. There’s no doubt the Goldman team consists of very well qualified, well connected – well – guys. Not to downplay Lynn’s concerns that their formula for success could implode if they keep plowing ahead with a bit too much ego and brand (long-term greed? volatility is our friend?) invested in a strategy that may have worked in a certain place and time, but could prove to be catastrophic when rolled out as a sustainable system on a global scale.

    I think of cronyism as the sort of thing that happens when people without appropriate expertise are given positions of power – perhaps more because their loyalty can be called upon to cover for the enterprise’s faults rather than for their unique capacity to actually fix its problems.

    “…”Because the market is growing rapidly and turnover is high, people appear to be rising to positions of responsibility faster than they might do in a more developed market,” says the Hong Kong investment banker.” Cultural Revolution leaves void among accountants

  • Posted by smekhovo

    Networks are my friends. Cronyism is your friends.

  • Posted by acr

    Perhaps, but might it be suggested that cronies can exist in networks – to the overall detriment of the network. It is my impression that the greater transparency of American networks was designed to ensure that incompetent and/or corrupt cronies are ousted sooner rather than later. Remains to be seen whether the American system can maintain that transparency as it integrates with more opaque economies.

  • Posted by Joshua

    Robert Reich on Henry Paulson

    Henry Paulson’s Challenge


    “Wall Street is delighted one of their own is going to be at Treasury’s helm. The White House feels confident Paulson will be able to sell the administration’s policies better than his predecessors, Paul O’Neill and John Snow. I wish my old classmate well. But let’s get real.

    The reason consumer confidence is dropping, the dollar is dropping, the stock market is dropping, and Bush’s ratings are dropping is not because the Administration has failed to sell its economic policies. It’s because those policies are fundamentally flawed.

    If America continues to go deeper into debt, it makes no difference who’s running the Treasury. And it is going deeper into debt because households aren’t saving – indeed, household indebtedness is rising. More to the point, the federal deficit is rising. The President continues to cut taxes while spending more and more. His spending includes wars in Iraq and Afghanistan, corporate welfare to the pharmaceutical industry (disguised as a Medicare drug benefit), subsidies for Big Agriculture, and excessive pork (earmarks).

    Even if my old classmate convinces the Chinese to further revalue the yuan – which seems unlikely, given that the Chinese well understand Bush is approaching lame-duck status – these fundamentals won’t change. The dollar will continue to drop, interest rates will continue to rise, and the economy will be in deep doo-doo, as the President’s father used to say.

    At best, Paulson may be able to coordinate with the Chinese a slower drop in the dollar than otherwise. This would be an accomplishment, to be sure. Better a gradual decline than a death-defying fall. But neither would be good for American living standards. And neither gets at the basic problem.”

  • Posted by Joseph Wang

    Re: long term greed – The reference to this is Lisa Endlich – Goldman Sachs: The Culture of Success. The book itself is written by a former VP and is largely favorable to the company. Also Eric Derman, also retired GS, refers to it in his book “My Life as a Quant” (Chapter 12 when he talks about the difference between GS and Salomon Brothers.)

    One of the ironies where is that Zimbabwe has one of the worst economies but best stock markets, while China has one of the best economies but the worst stock markets. I don’t think its coincidential.

    The interesting thing is that expertise actually tends to increase the importance of personal networks. Suppose you want to hire a competent particle physicist or interior decorator or mechanic. How do you find out who is competent or incompetent. Usually this involves asking your friends for what they really think about X, Y, or Z.

  • Posted by acr

    But something as complex as a financial system forces you to rely on the competency and honesty of many people you do not know, who participate in the complex networks that make it all work. But if something goes wrong, you are going to hope that you are part of a network that has enough transparency to enable you to find the responsible person(s).

    re: “China has one of the best economies.” I’m not remotely qualified to comment on that statement. I would have to rely on Brad and others (who I do not know) in this network for their comments as to how the accounting problems and other issues may distort that statement.