Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.
That would be nice if [people] stuck [treasury bills] all under a mattress, but they got to buy something with them. Sometimes they buy a treasury note, sometimes they set up sovereign wealth funds. They can do all kinds of things. They can buy our companies here. As long as we consume more than we produce, and we trade away little pieces of the country daily, they're going to own something. Now, they can't run from American assets. I mean every day the rest of the world is going to have about two billion more of American assets than we have, as long as they sell us these goods.
Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent... When bills come due, only cash is legal tender. Don't leave home without it.
I think the oversight is great, and I think that oversight ought to be devoted almost entirely to the question is this being done at market you know. In other words, you want to make sure that the government isn't investing foolishly. But you don't want to care about which congressional districts it goes to or whether banks get favored over.
If you were at Lehman, the same thing happened. If you were at AIG, the shareholders are getting creamed on these things. And those shareholders are not just a bunch of big shots in Wall Street. Those are pension funds, and those are investors all over the country. I wouldn't worry too much about that. Justice won't be perfect on it.
Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards.
Every day that goes by, I mean, if you don't react to Pearl Harbor for a week or two weeks or three weeks, you're behind in the war that you otherwise would have fought.
We rarely use much debt and, when we do, we attempt to structure it on a long-term fixed rate basis. We will reject interesting opportunities rather than over-leverage our balance sheet. This conservatism has penalized our results but it is the only behavior that leaves us comfortable, considering our fiduciary obligations to policyholders, depositors, lenders and the many equity holders who have committed unusually large portions of their net worth to our care.