• I was going to point out that we were developing a system of very large, highly levered, under-capitalized, financial institutions including the investment banks, some of the large money center banks, the insurance companies with large derivatives books and the GSEs.
• I planned to speculate that regulators believe all of these are too big to fail and would bail them out, if necessary.
• The owners, employees and creditors of these institutions are rewarded when they succeed, but it is all of us, the taxpayers, who are left on the hook if they fail.
• This is called private profits and socialized risk. Heads, I win. Tails, you lose. It is a reverse-Robin Hood system.

• It is hard for me to see how the rating agencies survive this debacle with their franchises intact.

• When the authorities get beyond the "keeping the fingers in the dike" part of the crisis and shift to figuring out what we need to do to prevent the next crisis, reducing the role of the rating agencies has to be toward the top of the list.

• Every day that MBIA credit default swaps trade at four digit spreads and the rating agencies insist its insurance subsidiary is AAA undermines rating agency franchise values.

• Greenlight is short the rating agencies and MBIA.

2008 0521 - Speech - Accounting Ingenuity, by David Einhorn, Greenlight Capital - 9p