The Uncommon Sense

Watched the Charlie Munger interview in Caltech (March 2008) again last night. Munger is truly amazing. The way he put things across is both eloquent and direct. He talks about issues ranging from his favorite subject on mental models, the problem with the social sciences, his fear for nuclear proliferation and what young poeple should do to get ahead in life.

He said something along the line that after being around people who are the best in their field, he realised that he'll never be the GREATEST in any field. So the question is 'How to do very well without being very good in anything?" Soln: Given that there is so much folly in the world, he think the if he simply avoids all these follies, he's pretty sure to he'll do quite well.

He also talks about the folly that has gone into derivatives accounting. The fact the accountants 'blessed' the accounting figures and FASB issued the accounting rules in no way means that the numbers mean anything. Imagine that you have 200 regulators looking at the books of Freddie and Fannie and NOT be able to figure out what is really wrong BEFORE it blows up tells us much about how convoluted the accounting of these two institution is.

Studying FRS 39 in my Advance Financial Accounting course now, and i must say that Prof Pearl Tan makes the whole , and i find some of the rules rather silly. Due to rules in derivatives accounting (for cash flow hedge), we have to recognise the associated asset or liability for the hedge instrument. However, due to the 'matching' principle, companies are required to recognise the 'hedged item' even before it materialise or risk and reward has been transferred. That's crazy!!! The whole idea of revenue recognition has been flipped upside down.

Furthermore, the inputs that goes into 'estimating' profits and fair value would allow two parties to BOTH book a profit in zero sum game. Such atrocities are once again blessed by the accountants. If you tie management compensation to the these numbers that are estimated (or fabricated), what numbers do you expect to get? Of course we will expect aggressive accounting, and unless the auditors can VERIFY that the numbers are wrong, the accounts will be certified True and Fair if not risking losing the clients. But such estimates are in its essence NOT VERIFIABLE. We can only trust the manager's conscience in estimating the fair value of such opaque accounting figures. Gosh, i have been partly brain washed by Prof JJ!!! AAAAHHHHH!!!!

Go watch the video and be blown away!
http://today.caltech.edu/theater/item?story%5fid=30623
If any of you wants the extracted audio, drop me a mail :)

Charles T. Munger, vice chairman of Berkshire Hathaway Inc., is the business partner of Warren Buffett and a major contributor to Berkshire Hathaway's legendary performance record. Forbes lists the self-made Munger as one of the 400 richest people in the United States.

The 'A Team'

The Straits Times (25th Oct) article which MM Lee commented on some human capital issues gave me much to think about. 

On the qualities of A Team members: "people with good minds, a sense of obligation to do a good job for the people and the ability to execute". He also cautioned against glib speaker who cannot deliver performance. 

Commenting on out local architecture: "(Here in Singapore, we just pick them by their O levels and A levels, what they scored for math, science, languages, not... how well they did in aesthetics.  We've had the same problem with architecture. We have stereotype buildings....i wonder why. Because we employ or rather we train people who scored well in engineering..."

On knowledge and creating an environment to foster it: "You've got to make it quite clear that knowledge, learning, application of knowledge are what will gain you a good life. If they come to the conclusion that the system depends on good connections, skiving, cheating, then you are in trouble because he sees no reason in acquiring all this knowledge."

Sometimes i wonder who will be the future leaders that are churned out from the nice little factory called SMU. I worry that we will be stereotyped as those who are "glib speaker who cannot deliver performance". Prof Leong warned us against that in Year 1. Given that one has to present to the class more than at least 5 times a sem, it is natural that he/she will be more skilled at presenting than people who have not had the opportunity. However, there's always the case of people who has contributed little to the project, but due to their eloquence, scored brownie points with the prof. In the name of collegiality or just plain unwillingness to 'rock the boat', many of us will not act to 'out' such people. 

I'm really fortunate that in my past 3 years, i've only met ONE such person, and it was a course that i really couldn't care less about. Haha. Most of my team mates are great people who deliver what they promise, and many times more. It such a wonderful experience working with people you can totally trust. Sometimes i would look at people around me and ask myself, "if i am to go into business in the future, who will i want to partner. Who am i willing to work under?" and it often leads to the simple question of "Who can i trust?" which finally leads to the question "Will people trust me and am i trustworthy?"

Acquire knowledge, learn, apply the knowledge, commit, execute and deliver, and never break my promises.

Pascal

Sent the following quote to some friends today "How can a part know the whole? Man is related to everything he knows. And everything is both cause and effect, working and worked upon, mediate and immediate, all things mutually dependent." Pensees by Blaise Pascal

When i read this quote, i was thinking along the line of Munger's multidisciplinary approach to decision making. Then i thought it was about always leaving room for uncertainty, or Feynman's notion on mankind's precious gift of "freedom to dobut". 

Then i got a reply from Guoyi, who said "...that the part cannot know the whole does not mean there is no whole. And all of man's pursuit can be said to be in search of that illusive whole, which if found, would render man no longer man, but God. Are all things cause and effect? How can we know if we cannot see the whole?"

Wow! Guoyi gets straight to the core of the question. And from Pensees, the following was put forth "But perhaps this subject goes beyond the capacity of reason." That explains why Wiki said that Pensees represented Pascal defense of the Christian religion. (and it is disturbing that i'm quoting Wiki like it is some sage or something). Included in the treatise, is the famous Pascal's wager, "You must wager; it is not optional... Let us weigh the gain and the loss in wagering that God exists... If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation, that He exists."

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Sometimes i wonder what have i gained from studying stuff i studied in accountancy? and Weifa asked me a good question last week, "would you trust financial statements?". I think i would now read financial statements with a HUGE pinch of salt. And at least i kinda know what is the the process that goes into 'making' the financial statements, so reading FS makes slightly more sense.

There is some sort of economic reality 'out there'. A FS tries to represent all that (at least the so called "true and fair" ones). Without knowing how these 'stuff' in real world is being represented in the FS, it makes no sense trying to analyze financial ratios and make decision based on a set of figures we don't even understand. 

Recent move by both SEC/FASB in the US and EU Committee/IASB to modify Fair value accounting rules when there is an inactive market would be a case in point. Without knowing the how the financial figures of Level I, II and III assets come about, how could we know what is the financial position of a firm (at least those with this sort of assets)? When people discussed about "marked to model", how many of us actually know the actual inputs to the model, what affects the model, what are they exactly modeling? What is the extent of disclosure needed? and analytical adjustments FS users should make?

If we do not understand how the accounting figures are created, how are we going to be able to understand the FS? 

If we don't understand the FS, then how can we claim that we understand the firm we are analyzing through its FS? 

If the FS itself does not even reflect economic reality then what should we rely on?

What is economic reality?

What is reality?

The real deal

I think Tina Fey should run for president. Alec Baldwin can be her VP. Love the cameo by Sarah Palin: "No, I won't take your question".

Management Science

Had a wonderful time during MS today. Today's lesson is on probability, which was more like a review of what i've learnt in A levels and Stats 101 course. It is sad that i have not learnt much from these past teachings, especially on the concept of joint probability and conditional probability. I need to grasp the super useful concept of Bayes' theorem, where observation is used to update probability of event.

Jie Chao ask me a question after reading"Fooled by Randomness" by Nassim Taleb. A variant of the question is as follow; A drug test will correctly identify a drug user with positive test result 99% of the time, and will correctly identify a non-user as test negative 99% of the time. Given that 0.5 % of the underlying population are drug user, what is the probability of a person being tested POSITIVE is actually a NON-USER?
(the above example is adapted from wikipedia, look under example 1)

MCQ

So imagine now that a friend of yours went through the test and tested POSITIVE, what's the probability of him being a NON-USER? 

a) 7% (i'm almost certain he's guilty)

b) 37% (i'm quite sure he's guilty) 

c) 67 % (i think he's probably innocent)

d) 100% (no friend of mine would do drugs!!!)

Guess, and dun cheat by looking at wiki answer. Alternatively, it would be great if you can dig out your A levels notes and calculate it (maybe only XinHong is diligent enough to do this, heehee). Answer at the end of the post :)

Then Prof Pascale Crama gave us the classic Monty Hall problem. She let us chose from 1 of 3 envelope of which one contains 20 dollars (REAL CASH). She'll reveal an empty envelop after i've chosen one and i'll be given a chance to change my envelop. The twist is that we'll have to bid for the chance to play the game. NO ONE in the class participated at first. Damn weird, prof giving out money and almost no one wanted to play the game by giving up even 1 buck. Finally some students participated and i WON the bid at $5. 

The probability of winning is about 67% (if you change the envelope) thus expected return is about $13. I'm willing to bid up to $8 to play this game. I changed the envelope after prof revealed the empty one. and I WON!!! yippee, 400% return on my initial investment!!!! since we only spent about 5 mins on this activity, can you imagine the ANNUALIZED return?!? haha. Fat hope.

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"When Markets Collide" is so engaging that i can hardly put it down over the past few days. The changing role of emerging economies in the globally will put a strain on current infrastructure. There will likely be displacement in the market and it will take some time for the world to adapt to.  As a creditor to many 'developed' countries, there are many challenges that they will faced. Singapore was mentioned in the book as an exemplary example of how a country should manage its reserve. And it is also a model that many emerging economies will follow. For a good summary this changing landscape was published by Legg Mason's Maubossin article.

Reading letters by great investors that have been through market cycles allow us to see thru the valley and maintain a long term view. The Wintergreen Fund has been investing successfully globally over the years. A discussion by Bill Nygren on the 'mistakes' he has committed is particularly educational and refreshing. Click on the following paragraph to read the original commentary. And click here to read the letters to shareholders. 

What did you miss on Washington Mutual?
Washington Mutual was held in all three Funds I co-manage. We sold our position during the quarter when it appeared that regulators were increasingly looking at mark-to-market implied losses, which eliminated the chance that Washington Mutual could, over time, earn back its mortgage losses. Selling was the right decision but by the time we sold, the damage had been done. Owning Washington Mutual was a big mistake for which I fully accept responsibility. Though we believed home prices had been rising at an unsustainable pace, we took comfort that previous home price bubbles had corrected with home prices plateauing for several years rather than sharply falling. Expecting that to continue, I took too much comfort in the fact that the overwhelming majority of mortgages Washington Mutual owned had balances of less than 80% of appraised value. Believing that the collateral was so valuable, I wasn’t as concerned as I should have been with softening underwriting standards. After all, if the borrower defaulted, the house could still be sold for more than the mortgage debt. After nationwide prices fell 20%—and further in hot markets—the collateral was no longer worth more than the loan, and serious losses resulted. A mortgage market previously viewed as secure became viewed as very risky. Sellers flooded the market, and prices fell sharply. Because of its leverage, Washington Mutual’s assets, marked-to-market, were no longer greater than its liabilities. Ironically, the asset we’ve always believed was under appreciated, its strong retail deposit base, is now owned by another of our holdings, JP Morgan. Though there are many lessons to be learned from this error, perhaps the most important is that in today’s economic climate, we need to consider a broader array of outcomes than we previously considered, especially for companies that employ financial leverage.

Lastly, Warren Buffett wrote on op-ed on NYT. READ IT!

The ans to the mcq is C. Your friend has a 67% probability of being a non-user. So be wary of such tests results.

The Art and Science of Happiness

Attended a talk at SMU today entitled, The Art and Science of Happiness: Perspectives from Philosophy, Psychology and Neuroscience. It is a very interesting mix of different discipline approaching the seemingly simple issue of happiness.

Prof Mark Nowacki approached the notion of happiness as human flourishing. He suggested Virtues as a tool of happiness and that it is a special form of habit. As with all habits, virtue requires practice. If we practice virtue in a right environment, we would probably flourish and "be happy". His arguments was elegant, but quite chim for me to grasp. Haha. He was my Analytical Skill prof who tortured me in Year 1. 

The second speaker talks about some technique to intervene to make us happier. Prof Tov presented on research that suggests that exercise like think about gratitude, acts of kindness, and positive thinking may help us feel happier. He also touched on the concept of "flow " where one will feel energized, and that the task on hand will be enjoyable and rewarding. Jie chao, reminds me to borrow the book from you when my term ends.

Prof Farber presentation on some of the mechanics of the brain provided me with many new information. We were introduced to some neurotransmitter and its impact on how we feel.   

Serotonin is a neurotransmitter that modulates our level of aggression, mood, social behavior, sexuality, appetite, demand for sleep and a whole host of other factors. A level of serotonin that is too low has been linked to clinical depression. Prozac, the famous anti-depressant, targets the level of serotonin and helps reduce occurrence of depression in the patients.

The professor asks the audience that if this neurotransmitter seem to be ‘bad’ human, so why has it not been removed from the process of evolution? A suggestion he made was that Serotonin also acts as a regulator of your point of view of your social status. It was found that in patient that went through traumatic accident, the level of serotonin was low. 

Imagine you’re an alpha male ape living in an ape tribe. After an accident that caused you to lose an arm and a lower Serotonin level which will make you think less highly of yourself. If you still think that you are an alpha male, you could get clobbered by the rest of the tribe. So the neurotransmitter ‘helps’ us not over step our social status to ‘protect’ us. Interesting. Dan Humphrey from gossip girl must have out of sync level of serotonin that caused him to hook up with Serena…or maybe he’s just plain dumb, or is he trying to make use of Serena to climb the social ladder to be the alpha male in town???

Oh ya, don’t do drugs. Morphine for instance screws up your level of Opioid. You’ll have that ‘blissful’ happiness feeling when level of Opioid is high. But if you take drugs like morphine, your brain will be so screwed up to appreciated other from of stimulus. Many types of drugs fry up your brain. Ya. So stay away from drugs so we can still appreciate that fresh cup of coffee with kaya toast.

By the way, it seems that Chocolates helps stimulate the level of Serotonin and Dopamine. But over consuming it and our body will convert it into Melatonin, which in large dosage wrecks your sex drive. Not forgetting that it is highly fattening, 294 kcal per Mars bar and 106 kcal for 2 fingers of kit kat. 

Will knowing all these make us happy? I don't know. But at least we may be able to better explain why we are... 

Bipolar Disorder

Bipolar disorder is a psychiatric diagnosis that describes a category of mood disorders defined by the presence of one or more episodes of abnormally elevated mood clinically referred to as mania or, if milder, hypomania. Individuals who experience manic episodes also commonly experience depressive episodes or symptoms, or mixed episodes in which features of both mania and depression are present at the same time. These episodes are usually separated by periods of "normal" mood, but in some individuals, depression and mania may rapidly alternate, known as rapid cycling. Extreme manic episodes can sometimes lead to psychotic symptoms such as delusions and hallucinations.

Source: http://en.wikipedia.org/wiki/Bipolar_disorder

Is the market exhibiting signs of bipolar disorder? S&P 500 fell from 1300 in early sept to a low to 850 last friday and rose to a high of over 1010 over the short span of 3 trading session. 

Is it possible that the 500 largest companies in the US increase in value by over 18%?

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Jeremy Tang sent this super fun link. Experience the world of Wii yourself!

When Markets Collide

Reading a very interesting book called "When Markets Collide" written by PIMCO's co-CIO Mohamed El-Erian. I'm only about less than half way through it and i realize how naive i have been in interpreting news, events and data over the past 2 years. The author encourages us to adopt a flexible 'thinking model' and asked us to learn how to interpret noise in the market. Btw, the book is up against Snowball in the FT/Goldman Sachs Business Book of the year award.

In a world of cyclical change, the way to deal with noise is largely to fade it and treat it as temporary and reversible. However, the author suggests that the current instability in the market suggests a longer term secular change in the financial market. Inconsistencies in the bond and equity market last year (a inverse yield curve and a rising stock market) and developing states being the largest creditor to the industrial world suggests that the there could be large developing change in the economic landscape. 

I'm reading it i immediately realized that i have been FAR too willing to accept the idea that "this too shall pass" and too quick to dismiss the notion that "this time is different". When reality contradicts my previous belief, i got stuck in the world of poorly developed misconceptions instead of going all out to explore and learn new ideas. I shall not succumb to hubris at such a young age. I shall be fearless in learning new ideas and be ruthless in destroying cherished opinions. Principles towards investing stay (ie long term and value oriented), but my attitude must improve. 

The difficulty lies not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.

John Maynard Keynes

We are the lucky bunch

Totally enjoyed Daniel's post on some of the perils of value investing. It is both insightful and thought provoking. Daniel made a good case against jumping into US equities and why us mortals not being Warren Buffett should not emulate his every move, Xin Hong's post on his blog as usual gives us much to learn from. 

I agree with Daniel to a very large extent. However, as a cock eyed optimist (or at least an optimist with lazy eye), i think that the decision to 'jump in' or not is totally dependent on the investor's time horizon and risk appetite. I have a 30 year time horizon and can stomach a fall of my portfolio of over 50%, thus i'm fully invested. And Daniel, reading Cramer and Buffett's dueling view, i think they could be both right depending on holding horizon.

Some reflection...

Should i have lighten up on stocks earlier last year? on hindsight, yes. 

But given what i know then, should i sell? maybe. 

Looking at what i know today, should i buy/sell/hold? I'm cautiously optimistic.

As on the thesis of diversification, i believe that the two extreme ends make sense. Extreme diversification in the form of globally diversified index fund is how i do it, and that's where the bulk of my assets are. On the other hand, my portfolio picks consists of less than 10 stocks, with the top 3 making up almost half of the active management base. I'm surprised that this portfolio has held up quite well over the past 2 years against major indices, despite committing stupid mistakes like CFC and LEH. The common thread that runs through the failed investments is that i would never want to own the WHOLE company. So it is also not right that i would want to hold a slice of the company. 

In this world which prolong recession is probable and tight credit market,  i would ask myself the following question after finding a GOOD COMPANY before buying what is seemingly cheap.

1. Does the company depends on the credit market to maintain its operation? 

This would rule out many financial institutions, developers and companies that rely on debt refinancing to maintain operating cashflow.

2. Does the manager have substantial stake in the company? 

Angelo Mozilo, the CEO of CFC was busy selling shares before the share price went down and down.

3. Does the company have enough cash on hand and HIGHLY liquid assets that is not encumbered (e.g. pledged as collateral)? should there be a need to raise cash to pay for whatever.

4. After all the above criteria has been satisfied, can the company survive if they do no business over the next year or so while maintaining the required cash expenses (wages, rental etc)?

5. Is equity the best form of security to hold?

Holding debt or quasi equity investment in a perfectly decent company may be more advantageous than than common equity.

6. Following qn 5, are there more senior securities in the company that any upside of the firm no long accrues to common equity holder?

We are really lucky to have this crises to learn from. Imagine that those bankers who are in their forties wouldn't have experienced the late 70s crazy inflation and early 80s S&L crises. Even the banking crises in late 80s was comparatively short lived. The relative prosperity of 90s sprinkled with the dot.com bust and LTCM debacle is nothing compared to the current crises.

PIMCO's Bill Gross Oct commentary is out. Fear the McFear! Go read it.

 

The Great Crash

Finished "The Great Crash (1929)" by John Kenneth Galbraith last night. It was an amazing read and it is both highly entertaining and insightful. Thanks Prof JJ for recommending it. Wow, the nature of Man's greed has not changed at all. The author gave a short summary of the characteristic of a speculative bubble;

"... But here is a basic and recurrent process. It comes with rising prices, whether of stocks, real estate, works of art or anything else. This increase attracts attention and buyers, which produces the further effect of even higher prices. Expectations are thus justified by the very action that send prices up. The process continues; optimism with its market effect is the order of the day. Prices go up even more. Then for reasons that will endless be debated, comes the end. The descent is always more sudden than the increase; a balloon that has been punctured does not deflate in an orderly way."

The financial orgies that bankers and speculators engaged in came to an abrupt end early last year. But 2007 was the calm before the storm. Banks that have thrived on loose credit and rising home prices have suffered (to say the least) when home prices start to fall. As banks faced higher defaults, 'disciplined underwriting' came back to vogue suddenly and risky borrowers that have been been enjoying the high life by refinancing previous loans suddenly faced calls on loans with no available lenders. 

Home owners in some many american states could no longer use their houses as ATM and drawdown their home equity. Many faced negative home equity instead. Exotic financial instruments such as CDO, MBO, CDS exploded. The banks start to suspect each others balance sheet (due to the toxic mess in the assets) , inter-bank short term financing becomes expensive and for some banks, their oxygen source was cut off and left to wither in the dried out land.

Where do we go from here? This is exactly the moment where the strong gets stronger and weak gets wiped off. Examples of Wells Fargo's bid for Wachovia and Eli Lilly's purchase of ImClone is a good example of well capitalised firm taking advantage of the credit crises.  Others firms like and Leucadia and Berkshire are also finally moving their huge pile of cash to some other uses. Can we identify these strong companies and capitalise on their strength? Are they available at not too high a price? Seek and i hope i'll find some more. 

Anyway on the topic of the Great Crash, my terrible driving skill finally materialized as a physical damage to my dad's car. It happened in a rather spacious carpark. While reversing into a parking lot, the front side of the car brushed against the rear bump of a van (that is OPPOSITE the lot i was reversing into). Haiz. My dad's hand was cold when he calmly told me to change over and he parked the car in. He didn't even scold me, and even managed to say something like 'study hard hor, can't be a taxi uncle next time'. WOW! the papa that explodes to things like me/my mom being 5 mins late has EVOLVED.

Think i must really find ways to be pretty rich before too long. If i can't drive my parents around next time, must at least get a trustworthy chauffeur to ferry them around. 

For me? i think i'll just have a deal with SMRT to have my private cabin so i can do my part in keeping mobile accident rate and blood pressure of other road users low.

The impersonal claim

I really like Jie Chao's post on Darth Vader. So i shall shamelessly quote from his blog here, haha.

Joseph Campbell: Darth Vader has not developed his own humanity. He's a robot. He's a bureacrat, living not in terms of himself but in terms of an imposed system. This is the threat to our lives that we all face today. Is the system going to flatten you out and deny you humanity, or are you going to be able to make use of the system to the attainment of human purposes? How do you relate to the system so that you are not compulsively serving it? 

On how to not lose our humanity: By holding to your own ideals for yourself and, like Luke Skywalker, rejecting the system's impersonal claims upon you.

(see full post here)

Looking at myself and those around me, i guess most of us are shaped by the world around us. The expectations of our parents, friends, loved ones, those of the institution (think getting high GPA = good job) and 'social norm' influenced us to make many decision that we would otherwise not make. 

I applaud Xin Hong's reply to his friend's qn on why doesn't he apply to "prestigious institution". He said that wants to work for a firm which live the principles that he agrees with and work for a person (a prof who taught a course in SMU) whom he admires. 

How refreshing! when he asked me if it made sense, i told him it totally does. My only caveat is that he must not be envious of others (whom i believe mostly less exceptional then him) who will earn way more than him (at least in the beginning). 

To see Chin Ta dance in the library was quite stunning at first, but now there's a bunch of his Caderas friends who'll dance with him in that corner in the library. Not distracting cuz they count their dance steps to silent beats, but very entertaining. He has essentially re-shaped the 'imposed system' in his idiosyncratic way. Btw, HAPPY BIRTHDAY!!! 

End of Mid-term exam week today. 'Buang' my MS exam today. Probably got 40 odd marks out of 100. Now my grades depend on my relative 'buangness' of my classmates. Dunno how to do well in a class where they can talk about gradients and coefficients and make much sense out of it. They are having a private conversation in class with the prof which i'm not part of. 

Yippee! Mid Term Break. Time to read my Buffett biography and sit around and do nothing (at least for a few days).

Once again, the same quote from a previous post:

The vulgar thus through imitation err;

As oft the learned, by being singular; 

So much they scorn the crowd, that if the throng

By chance go right, they purposely go wrong.

~Alexander Pope

3 mil dollar trip to Phuket

It has been a week since US Treasury proposed the bail out plan (version 1) to save the financial system. A professor of mine described the plan as similar to a student going to a vacation to Phuket and asking 3 mil bucks as travel allowance. When asked about how he's going the spend it, the student answers "i don't quite know how i'm going to use it, but let me reassure you that i'll be responsible about spending it".

Almost all commentators agree that the current condition is a crises of confidence, so taxpayer's money should be used to restore confidence, such that the financial crises does not flow from "Wallstreet to Mainstreet". However, there are huge disagreement to what's the best plan. 

George Soro, Nouriel Roubini, and the guys at FPA commented that the is fraught with dangers, such as the issue of moral hazard, the rationale behind socializing losses but not gains, and whether this plan is going to stem systemic risk. Underpinning their arguments, is a common theme that the market economy should be allowed to work, un-disciplined lender's equity should be wiped out and new players should emerge. Some suggested that a model could be Buffett's infusion of highly dilutive capital into Goldman (great for him, but dilutive for existing shareholders), or allowing companies such as WalMart and others with un-levered balance sheet to be granted banking license. 

In 10 years time, we will look back to these days as the days where over-levered institutions engulf in flames for their greed. We'll vow to never make the same mistakes again. But we'll surely find new ways to burn, for humans have an enormous relish for folly.