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Senate Proceeding on Mar 11th, 2009 :: 0:27:15 to 0:33:25
Total video length: 6 hours 56 minutes Stream Tools: Stream Overview | Edit Time

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Johnny Isakson

0:27:13 to 0:27:33( Edit History Discussion )

Johnny Isakson: year rather than wait. mr. president, i yield the floor. the presiding officer: the senator from georgia. mr. isakson: mr. president, first of all i want the new hampshire. as a member of the senate there are many i look to for wisdom and knowledge and judd gregg is one.

Johnny Isakson

0:27:15 to 0:33:25( Edit History Discussion )
Speech By: Johnny Isakson

Johnny Isakson

0:27:34 to 0:27:54( Edit History Discussion )

Johnny Isakson: in my hometown of atlanta, georgia, there is another i look to for wisdom and knowledge and that is my barber, tommy, atom at tommy's barber shop and i talked to a real estate broker, pension fund manager, and a good old

Johnny Isakson

0:27:55 to 0:28:16( Edit History Discussion )

Johnny Isakson: average every day person retiree trying to figure out how he is going do make it on what the markets have done to him in the last year or is. and you know it is ironic and i had no plan to make this speech behind judge gregg but they talked about two first was debt, just a week after the announcement of $3.6

Johnny Isakson

0:28:17 to 0:28:37( Edit History Discussion )

Johnny Isakson: trillion budget, a 20% increase, an officer ian increase in taxes and america is borrowing more and more and more. and the other thing i rise to talk about today, we have looked into the mirror to look for the enemy and we avoid looking at ourselves. i want to talking through

Johnny Isakson

0:28:38 to 0:28:59( Edit History Discussion )

Johnny Isakson: regulatory policy -- i'm talking about both administrations, the end of the bush administration and the beginning of the obama administration -- we have been missing the mark. i want do share some real life stories about real life georgians that indicate what marmarket to market accounts is doing to businesses in the united states of america and

Johnny Isakson

0:29:00 to 0:29:20( Edit History Discussion )

Johnny Isakson: people in the united states of america. some of you have watched certain commcials on division that i think are the best, of the finest companies in the united states of america. you go to affleck and the c.e.o. of affleck put in stockholder

Johnny Isakson

0:29:21 to 0:29:42( Edit History Discussion )

Johnny Isakson: advice and consent and repealed his own golden parachute, heid all the things c.e.o.'s complained about but his stock has plummeted. you know why? because of the rules on mark to market, his core asset base which is long-term assets, held to maturity, to protect against insurance commitments the company has made are now being

Johnny Isakson

0:29:43 to 0:30:03( Edit History Discussion )

Johnny Isakson: mark to mark, meaning assets worth something are being marked "worth nothing." so the stock has gone down looking so good because of mark to market. let me explain what that really means as best i can. mortgage-backed securities are

Johnny Isakson

0:30:04 to 0:30:25( Edit History Discussion )

Johnny Isakson: an investment a lot of life companies and a lot of other industries bought to put on their asset sheet to offset obligations they have off in the future. because those secities have securities of the loans embedded in them of anywhere from to 30 years. when the subprime market started

Johnny Isakson

0:30:26 to 0:30:47( Edit History Discussion )

Johnny Isakson: failing, merrill lynch in a cris mode last july sold their subprime securities get rid of them and fnlsed the sale and sold them for 22 cents on the dollar. under the fasbe rules, they were worth 70%, 90% were all of a sudd marked down to 22% t lowered the asset side of the ledger and made the stability of the company look -- and i

Johnny Isakson

0:30:48 to 0:31:08( Edit History Discussion )

Johnny Isakson: underline the words "look" -- worse. when in fact those assets held to maturity would not be anywhere near the value -- and let me give you a good example of that. let's just say that i bought a mortgage-backed security, subprime mortgage-backed security backed 100% by 30-year mortgage loans made in the state

Johnny Isakson

0:31:09 to 0:31:29( Edit History Discussion )

Johnny Isakson: of nevada, every one a subprime loan. nevada has the highest foreclosure rate of any state on subprime paper. 70% of those loans in nevada today are paying right on time. 30% are in default. yet because of mark-to-market, that security is not marked at 70% which it is performing at,

Johnny Isakson

0:31:30 to 0:31:51( Edit History Discussion )

Johnny Isakson: but at zero, because point in time today, you can't sell t but it's being held by the institution as an offsetting astoat a liability over a term of maturity. i ran into -- in tommy's barbershop, i ran into a pension guy and they asked me why in the world w accounting in mark-to-market like we looked at the pension

Johnny Isakson

0:31:52 to 0:32:12( Edit History Discussion )

Johnny Isakson: crisis in 2004. we've got short memories in the united states senate. in 2004 because of the decline in the stock markets in 2001 and 2502, there were a number of defined benefit plans in the united states that were underfunded. and because of the accounting rules that were enforced at the time, those institutions were asked to write checks to fully fund the pension fund, when in

Johnny Isakson

0:32:13 to 0:32:34( Edit History Discussion )

Johnny Isakson: fact not everybody is going to retire the same day. they'rgoing to retire over a number of years. so what did we do in the congress? we, long with senator kennedy, senator enzi, myself, and others, we passed the pension reform act and the pension protection act and we said companies, if your pension fund corpus becomes underfunded, you can't meet your obligation, and

Johnny Isakson

0:32:35 to 0:32:56( Edit History Discussion )

Johnny Isakson: you have to fund it over time, we'll let you smooth that investment or amortize that investment, over four to five years. and in the case of delta airlines, which was at trouble at the time, they had a $900 million shortfall in their pension plan but because of smoothing,nstead o having to put $900,000 in one year, they did $150,000 over six years,

Johnny Isakson

0:32:57 to 0:33:17( Edit History Discussion )

Johnny Isakson: delta airlines today is the most profitable and largest airline in the world or in the united states. but they would not exist today had it not been for the smooth. the presiding officer: morning business is closed. mr. isakson: i ask for one more minute to close, unanimous consent. the presiding officer: without objection. mr. isakson: so in conclusion, i hope everybody will visit

Johnny Isakson

0:33:18 to 0:33:26( Edit History Discussion )

Johnny Isakson: their tommy's barbershop. i hope everybody will take a look at what we are doing that may have the unintended

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