CAN WORK BETTER. >> ALL RIGHT BACK TO COMMERCIAL REAL ESTATE WE HAVE HAD LOTS OF INVESTORS IN COMMERCIAL REAL ESTATE WHO HAVE COME IN AND SAID THIS GOING TO BE A CRISIS POINT THAT THE GOVERNMENT IS GOING TO HAVE TO STEP IN. SOMETHING SHOULD BE DONE BECAUSE THERE ARE SO MANY COMMERCIAL REAL ESTATE LOANS THAT ARE COMING DUE BETWEEN NOW AND 2025. AND THAT THEY WON'T BE ABLE TO GET CREDIT FROM THE BANKS IN THE SAME WAY TO RENEW OR TO -- ONCE THOSE MATURITIES COME DUE TO REFINANCE. >> LET'S SAY THEY LOSE $100 BILLION IN THE BANKING SYSTEM, MOST OF THE BANKS CAN TAKE THAT LOSS, THEIR SHARE OF THAT LOSS, AND A FEW OF THEM, BECAUSE THEY DID OTHER THINGS, YOU KNOW, THEIR SHAREHOLDERS WILL END UP LOSING THE MONEY, BUT THE DEPOSITORS WON'T LOSE MONEY. IF YOU LEND MONEY TO SOMEBODY, AND IT COMES DUE AND THEY CAN'T PAY IT, THE OLD STORY ABOUT THE BANKER, NEVER MADE A BAD LOAN, OF COURSE SOME OF THEM TURN BAD AFTER I MADE THEM. AND THAT'S EXACTLY WHAT HAPPENS AND WHETHER IT IS IN COMMERCIAL REAL ESTATE OR PEOPLE -- IF MONEY RATES ARE 2% OR WE WERE LENDING MONEY OUT AT 4 BASIS POINTS, BERKSHIRE TO THE FEDERAL GOVERNMENT, NOT MUCH MORE THAN THE YEAR AGO, YEAR AND A HALF AGO OR SOMETHING LIKE THAT, AND IF THOSE RATES CHANGE, THE PERSON WHO BET THEY WOULDN'T CHANGE LOSES MONEY YOU MAKE MISTAKES IN BUSINESS. PLENTY OF PEOPLE MAKE MISTAKES YOU PAY FOR THEM IF YOU GOT A BIG PROFITABLE BUSINESS ON TOP OF IT, YOU KNOW, WHICH A GOOD MANY BANKS DO, YOU TAKE YOUR LOSSES AND YOU KEEP GOING ON BANKS CAN TAKE A LOT OF LOSSES, BUT CAN'T TAKE SOMETHING THAT WIPES OUT THE CAPITAL AND EXPECT THE WORLD TO IGNORE THAT FACT. >> MEANING THAT YOU DON'T THINK ANYTHING NEEDS TO BE DONE ON THE COMMERCIAL REAL ESTATE FRONT >> I THINK THE PEOPLE THAT -- THE PEOPLE THAT -- THEY ARE GETTING PROPERTIES HANDED BACK TO THEM NOW. WITHIN THE LAST MONTH OR SIX WEEKS. >> THE BANKS ARE >> YEAH. THEY GOT SOME OFFICE BUILDINGS IN LOS ANGELES AND, YOU KNOW, WALKED AWAY FROM SOMETHING AND IF YOU GET A NONRECOURSE, YOU KNOW, EVERYBODY KNOWS IN THE REAL ESTATE BUSINESS, TOLD THE FIRST RULE, THE SECOND RULE, THE THIRD RULE IS NEVER SIGN YOUR NAME TO ANYTHING YOU HAVE NONRECOURSE MORTGAGES AND THEY'RE GOING TO WALK AWAY AND THE BANK IS GOING TO GET STUCK WITH LOSSES AND MAYBE THEY'LL HOLD THE PROPERTY A LONG TIME AND IT WILL COME BACK AND THERE IS ALL KINDS OF WAYS THAT IF YOU GOT CAPITAL STRENGTH, YOU MAY DECIDE, WELL, I'LL JUST HOLD IT AND -- BUT, THAT MONEY IS STERILE FOR QUITE A WHILE AND THAT'S PART OF BANKING YOU EXPECT TO LOSE SOME MONEY IN BANKING. IT IS NOT A SURE THING ON EVERY LOAN AND YOU BUILD THAT INTO YOUR CALCULATIONS AND THEN HAVE CAPITAL THAT PROTECTS YOUR DEPOSITORS FROM IT EATING INTO THEIR MONEY, AND IF IT DOES EAT INTO THEIR MONEY, THEN THE FDIC, WHICH IS REALLY A MUTUAL INSURANCE COMPANY OF A VERY PECULIAR SORT, ESSENTIALLY
