What Could Possibly Go Wrong?

Morgan Stanley has this amazing plan to take a bunch of toxic crap, call it a different name, put a bow on it and sell as a magic moneymaking product. Innovative!

Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.

Two years after the credit markets began to seize up, costing the world’s biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks.

A lot of banks and insurers “cannot buy anything but AAA,” said Sylvain Raynes, a principal at R&R Consulting in New York and co-author of “Elements of Structured Finance,” which is due to be published in November by Oxford University Press. “You’re manufacturing AAA out of not AAA, therefore allowing those people who have AAA written on their forehead to buy.”

That last paragraph is my favorite part - investors cannot buy anything but AAA, so we'll call a bunch of garbage AAA and sell it to them! Genius! And if you're still wondering why that federal buy-up of toxic assets has amounted to nothing, I guess it's because enough customers have been found for this "New and Improved Shitt With Two T's."

It says in the article that Goldman Sachs is preparing a similar sale. Matt Taibbi, you have the floor.

Banks Aren't Lending, Don't Have Enough Capital, Other Than That They're Fine

Tim Geithner showed up on Capitol Hill today, facing the Congressional Oversight Panel (whose leader got a brushback from the Beltway establishment and the right leading up to this hearing) to defend his plans for the financial industry.

Treasury Secretary Timothy Geithner defended the bank rescue program devised by the Obama administration Tuesday as the International Monetary Fund predicted U.S. financial institutions could lose $2.7 trillion from the global credit crisis [...]

Geithner said the new plan "strikes the right balance" by letting taxpayers share the risk with the private sector while at the same time letting private industry use competition to set market prices for the assets.

"If the government alone purchased these legacy assets from banks, it would assume the entire share of the losses and risk overpaying," Geithner said in his remarks. "Alternatively, if we simply hoped that banks would work off these assets over time, we would be prolonging the economic crisis, which in turn would cost more to the taxpayer over time."

Geithner said "the vast majority of banks" have more capital than they need to be considered well-capitalized. But he said the economic crisis and the bad assets have created uncertainty about the health of individual banks and reduced lending across the system.

I think the vast majority of banks are well-capitalized only if you mean "not the big ones." I mean, we have pretty hard evidence on this. The Treasury wouldn't play accounting games by converting preferred shares to common stock, which has the express purpose of reducing the liabilities on the banks' balance sheet and giving the impression that THEY ARE MORE WELL-CAPITALIZED, if the opposite was true. James Kwak pretty well takes apart the whole idea, so I won't comment further.

In addition, if the banks were so well-capitalized, they would actually lend instead of hoarding capital, which after all is the function of a bank.

Lending at the biggest U.S. banks has fallen more sharply than realized, despite government efforts to pump billions of dollars into the financial sector.

According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.

The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.

Interestingly, the same banks that cut back the most on lending are the ones who have received the most money from the federal government, which suggests that the TARP funds might as well have been thrown down a well. But the banks want to return that TARP money (and I'm sure they'll get around to that any day now) while talking up their own earnings, which have been seen by the street as soft as tissue paper. To their credit, Treasury wants to put some limits on that return of TARP money, based on some amorphous idea of whether repayment is in the "national economic interest". But clearly, the banksters have never acted in that interest. This sad tale is sadly indicative:

Top officials at Chrysler Financial turned away a government loan because executives didn't want to abide by new federal limits on pay, according to new findings by a federal watchdog agency.

The government had offered a $750 million loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a major lender to Chrysler dealerships and customers.

In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burden on the already fragile automaker and its financing company.

They have always been more concerned with their personal fortunes than the health of the overall economy or even their own businesses. The greed here is astonishing.

Let's be honest here. Many banks are insolvent, and even the Administration admits that some will need more help. They don't want to sell the toxic assets because their essential insolvency will be too obvious to ignore. And they don't want the stress tests revealed for basically the same reason. At no point has the government appeared willing to end the stranglehold that the elites and the financial interests have over this economy.

I continue to worry that the Administration’s “wait-and-see” strategy is just increasing the ultimate costs - in terms of financial losses and unemployment. No government ever likes to tackle a severe banking crisis head on (mostly because that would greatly upset the financial elite), but it’s almost always the right thing to do.

I remain unconvinced by the Treasury’s line that “there is no alternative” to their approach. Or perhaps they are shifting towards the line that: “based on information that only the government has (and can have), it is our assessment that all other approaches would be more damaging.”

If that is now their position, we have built a financial system that is immune to democracy - today’s complexity and lack of transparency mean that it is easier than even to become too big to fail. The major banks now know this and will behave accordingly.

Oh, and by the way, the PPIP plan may be open to fraud and puts the taxpayer on the hook for close to $2 trillion.

It's their world, we just live in it.

More at TPM Muckraker.

Ptolemaic Bank-O-Centrism

Jeffrey Sachs has a primer on how banksters could game the PPIP and wind up rich at taxpayer expense:

Consider a toxic asset held by Citibank with a face value of $1 million, but with zero probability of any payout and therefore with a zero market value. An outside bidder would not pay anything for such an asset. All of the previous articles consider the case of true outside bidders.

Suppose, however, that Citibank itself sets up a Citibank Public-Private Investment Fund (CPPIF) under the Geithner-Summers plan. The CPPIF will bid the full face value of $1 million for the worthless asset, because it can borrow $850K from the FDIC, and get $75K from the Treasury, to make the purchase! Citibank will only have to put in $75K of the total.

Citibank thereby receives $1 million for the worthless asset, while the CPPIF ends up with an utterly worthless asset against $850K in debt to the FDIC. The CPPIF therefore quietly declares bankruptcy, while Citibank walks away with a cool $1 million. Citibank's net profit on the transaction is $925K (remember that the bank invested $75K in the CPPIF) and the taxpayers lose $925K. Since the total of toxic assets in the banking system exceeds $1 trillion, and perhaps reaches $2-3 trillion, the amount of potential rip-off in the Geithner-Summers plan is unconscionably large.

Noam Scheiber is unconcerned, calling this the good bank/bad bank scenario by different means (the bank gets recapitalized, the government gets stuck with the asset), but A.L. shows how he's missing the point.

Even if your plan is to do a good bank/bad bank model and have the government buy up all the bad assets, you still don't want the goverment to be paying the banks near face value for assets that are worth pennies on the dollar. The banks would make out like bandits under that scenario, all at the taxpayers' expense. No one thinks that the government should be buying these assets at those prices. All that would do is ensure that the taxpayers bear virtually all of the banks' losses.

At that point, there is no excuse for not nationalizing and at least taking a piece of the upside in addition to all of the downside.

I've seen this scenario half a dozen times since the PPIP was announced, and yet there has been no official response to the charge. Even if the rip-off artist doesn't wind up being one of the big banks, the potential for fraud is obvious, and there doesn't seem to be any safeguard to deal with it. Mike Lux says we need to "be helping to save the Obama team from themselves" in that case, but I see no instinct for self-preservation from these folks. They seem more like protectors of the banks than even protectors of their own legacy.

A series of recent meetings with members of Barack Obama's economic team (including running into Larry Summers on my way to an appointment in the West Wing, leading to a spirited back-and-forth that made me feel like I was back at Cambridge, debating the smartest kid in the class), left me with a pair of indelible impressions:

1) These are all good people, many of them brilliant, working incredibly hard with the best of intentions to solve the country's financial crisis.

2) They are operating on the basis of an outdated cosmology that places banks at the center of the economic universe.

Finance should serve industry, not master it. The banks and the financial system may make the rest of the economy run, but they should not set the rules and design the relay course. We're talking about $4 trillion in asset debt, which is only growing worse due to job loss and increased foreclosures. The banks cannot employ 5 million people and reverse the job trend, so they shouldn't be capturing ALL of the economic gain from the various bailout plans. The US economic outlook is worsening, IMO, because of this fundamentally skewed view of the world, where what's good for the banking elites equals what's good for the country to the exclusion of all else.

Geithner Meets The Press

President Obama sat down with Bob Schieffer on Face the Nation today, but I was actually more interested in Timothy Geithner's back-to-back appearances on Meet The Press and This Week With George Stephanopoulos. These were his first two appearances on the Sunday shows, coming out of a week where he announced major initiatives to engage in a public-private partnership to buy up toxic assets, and to re-regulate the financial sector. Both interviews had some interesting moments.

On both shows, Geithner was asked about the potential flaw in the plan for toxic assets, that the banks simply won't sell at the prices set by private investors, because taking losses would reveal the banks to be insolvent. Geithner didn't have the best answer for this other than to urge the banks to "take risk again." Indeed, there is no mechanism to force the banks to sell. In addition, on the issue of counter-party payments from AIG, Geithner demurred at any potential efforts to recover money from Goldman Sachs and other banks who were paid out whole on their credit default swaps instead of being forced to negotiate, pivoting instead to the need for more tools to step in and take over a firm like AIG:

GEITHNER: George, we came into this crisis as a country without the tools necessary to contain the damage of a financial crisis like this. In a case of a large, complex institution like AIG, the government has no ability, had no meaningful ability to come in early to help contain the fire, contain the damage, prevent the spread of that fire. Restructure the firm, change contracts where necessary, and helped make sure that the financial system gets through this...

STEPHANOPOULOS: But it would have been the right thing to do, right?

GEITHNER: If we had the legal authority, that's what we would have done. But without that legal authority, we had no good choices. We were caught between these terrible choices of letting Lehman fail -- and you saw the catastrophic damage that caused to the financial system -- or coming in and putting huge amounts of taxpayer dollars at risk, like we did at AIG, to keep the thing going, unwind it slowly at less damage to the ultimate economy and taxpayer.

STEPHANOPOULOS: So how about now, Goldman Sachs is taking other government money. They got this $13 billion whole from AIG. Congressman Brad Sherman and others have said, they should give that $13 billion back.

GEITHNER: George, the important thing is, we have no legal ability now. That's why I went to Congress last week, to propose a broad change in resolution authority so that we have the capacity to do what we do with banks now.

I suspect that will be a less-than-satisfying answer to most people. Basically Geithner is trying to keep the past in the past, particularly with respect to AIG.

On some other fronts, however, Geithner displayed a definite concern to reel in the massive financial sector and build a broad-based economy that can better manage systemic risk. Here is an answer from Meet the Press on his regulatory proposals:

SEC'Y GEITHNER: Core thing is to make sure that the institutions at the center of our financial system are subject to much more conservative, much tougher requirements on capital and leverage that are applied more evenly and more effectively, frankly. We need to make sure that hedge funds and derivatives come within a framework of oversight so we protect the system from the risks they may present. And we need to make sure the government has the authority it needs to come in more quickly, to help contain the damage, restructure the system, so we can have a stronger system going forward [...] We need a better model. What we're proposing to do is use a model that exists for small banks that was designed by the Congress in the wake of the S&L crisis, build on that model and give the government a capacity to act more quickly, more effectively to contain the damage at least risk to the taxpayer and the economy as a whole.

Certainly, over-leveraging caused a good deal of this crisis; other countries where the banks are leveraged more conservatively are in better shape. Obviously, the devil is in the details - there are currently no capital requirements for hedge funds in the Geithner proposal, for example, and the real issue is whether the regulation will be strictly enforced. Our experience with bank regulators who are too cozy with the subjects they regulate recently suggest that the real problem is a lack of will.

But I thought Geithner's willingness to talk about the need to restructure the American economy, at the macro and the micro level, was interesting.

MR. GREGORY: Time magazine this week has its cover, and it's very interesting. I want to put it up on the screen for our viewers to see. "The End of Excess: Why the crisis is good for America." And there's a big red "reset" button. And everybody talks about reset. Obviously this is not a good crisis for America right now. But take a longer view. In the long run, is this crisis necessary for this economy?

SEC'Y GEITHNER: I think the adjustment to a period of excess is necessary. You never, you never want to have a crisis to remind people of the importance of living within your means, not borrowing too much or why regulation of the...(unintelligible)...is important. You never want to have a crisis that's damaging to make that point. But we're going to emerge stronger than this. When we get through this people are going to care less about what they make, more about what they do, what they achieve with what they make, and that will help make this country stronger.

MR. GREGORY: Will the economy be fundamentally different? Will people own fewer homes? I mean, home ownership, will that go down? Will consumption change? Will our lives change in a meaningful way?

SEC'Y GEITHNER: I think people will be living within their means more, which is helpful. We want to have, you know, a stronger, more sustainable recovery. Not a recovery based on a artificial boom that's not going to be sustained. We need to end this, this, this pattern of having booms and busts at the kind of frequency we've seen. That has to change. And that'll make the, that'll make this a better place to live and a more productive economy going forward.

Further, Geithner understands the importance of active engagement with the crisis, not to ease up on the pedal because of a few positive indicators. And he talks about the need for a broader segment of society to share in the benefits of recovery than the wide gap between the rich and poor we've seen explode in the past decade.

GEITHNER: Now, the important thing, though, is that we keep at it. You know, the big mistake governments make in recessions is they put the brakes on too early.

STEPHANOPOULOS: Is that what happened during the depression? Is that what Franklin Roosevelt did?

GEITHNER: That's one thing that happened in the depression. It's happened in Japan, too. It's happened in a lot of countries in the world. They see that first glimmer of light, and the impetus to policy fades and people are putting on the brakes, and we're not going to do that.

STEPHANOPOULOS: So income inequality goes down?

GEITHNER: It should go down. Again, you know, if you look at the record of performance in the '90s, you know, we had very strong productivity growth during a period of fiscal discipline, fiscal responsibility, strong private investment, and the gains were shared much more broadly.

We can do that as a country, but it requires getting this government to do a better job of doing things only governments can do. That's why I assume important we get better outcomes. That's why fixing our health care system and get costs growing more slowly is so important. That's why we need a better energy policy. And that's why infrastructure needs to be improved.

This mirrors what the President has been saying about sustainable growth rather than feeding into the same boom-and-bust cycles and propping up the same elites who took these tremendous gambles. Or in the words of Joe Biden - "We need to save markets from free marketeers."

Obviously, words are less important than actions. But this perspective can hopefully guide the Administration through this crisis, and provide the kind of investments needed to ensure that everyone has the opportunity to share in the recovery. I'm not convinced that Geithner is the best advocate for reducing inequality and stopping the casino on Wall Street, so from the outside the work continues to keep pushing for a newer, safer, more durable economy.

PPiPin'

You may have noticed that I am not an economist. I like to keep up with these matters, but at times it feels like, to quote one of my favorite authors, intellectual mountaintop air so rarified I have to constantly swallow to pop my ears. This adequately appropriates my experience with the Public-Private Investment Plan (PPiP) for toxic assets (or legacy assets, or whatever you want to call them). I can link to a bunch of very smart takes about whether or not it will work:

Simon Johnson and James Kwak, closest to my view, I think, say that the plan could work, but only if the banks agree to sell at reasonable prices, an unlikely scenario; and that ultimately, the problem is the outsized influence and power of the big banks.

Paul Krugman says - you know what he says.

Krugman, Johnson, Brad DeLong and Mark Thoma participated in a vigorous debate about the plan on the NYT blog. And there's another live discussion with DeLong, Thoma, Kwak and Felix Salmon.

Then there's Karl Denninger. And Noam Scheiber. And Martin Wolf. And Nouriel Roubini, who actually likes the plan. And Bo Lundgren, the guy who administered the Swedish model, who actually lines up pretty well with the Obama Administration's thinking, believe it or not:

"I'm a market liberal. My party that I used to lead, the Moderate Party, is the conservative party in Sweden and the parallel to the Republican Party in America," Lundgren said. "When I nationalized the banks, it wasn't because I wanted to: It was crisis management. Their owners had been wiped out, the banks were black holes, they had no equity left, and there was no alternative but to take them over." [...]

The Obama administration's initial plans have fallen short, Lundgren said, because they failed to reassure investors that the banking system was genuinely backed by the government and private sector.

"There are similarities [to Sweden's case]," Lundgren said. "There are three things any plan must do—the first is to maintain liquidity, that's taken care of by the Fed. The second thing is to restore confidence, and that hasn’t been done so far and obviously the first proposal to buy toxic assets wasn't enough. And then you need capital injections so banks can keep lending at the levels needed for the economy as a whole."

However, Lundgren said that Obama was correct in observing that a similar nationalization scheme might be more difficult given America's size and preeminent role in world finance compared to Sweden.

"With Japan and Sweden, the crises we had, even if it was a very long process with Japan, they were crises that we had on our own," Lundgren said. "The rest of the world economy managed to be not perfectly good but still reasonably good. This time it's worse; it's a kind of financial tsunami."

My point is that there are a lot of opinions here, all of them valid in one way or another, since so much of economics is based on modeling and theoreticals (cue the old "we'll assume a can opener" joke). So I'm going to put my thoughts into some bite-sized portions.

1) Getting a reasonable price for the assets seems to be the key. If Geithner manages to get authorization to wind down big firms like bank holding companies, that could be a powerful bargaining chip for eventual nationalization, which would incentivize the banks to sell.

2) Judging from Geithner's comments, I'm guessing that he saw nationalization as too costly and too risky, because the government would assume all the potential losses. There's some truth to this - the largest FDIC receivership of recent vintage, IndyMac, cost much more than the government expected, about 1/3 of its value. The range of options indeed are from bad to worse. But if you have to go back to receivership after this plan fails anyway, I don't see how it could be cheaper. Plus, the government is putting up 90% of the risk in this scenario, anyway. To quote Dean Baker, "It implies there are real big losses there, but those losses are there whether we take them over or not. It's very likely that we're looking at a larger hole than the administration has been acknowledging and to my mind that argues for a takeover strategy."

3) If Citi and BofA are indeed using TARP money to buy up their own bad assets while being subsidized on both sides by the US government, we have to have some criminal prosecutions at that point. There is substantial evidence that this is happening already. This is doubly weird considering that Bank of America's top analyst doesn't think the plan will work.

4) Chris Bowers' post on how and when we will know if these economic policies succeeded is worth a read.

5) Even in Roubini's (somewhat) positive account, he says that "The administration should be transparent in making clear that there is still a wealth transfer taking place here - from taxpayers to investors and banks." We were always going to pay dearly for this - the debate is on the margins of whether we pay a lot or a whole heckuva lot.

Anyway, if you want to join this maddening debate, the FDIC website has opened up a public comment section.

The Stock Market Is Not The Economy

Well, Tim Geithner released his plan to buy up Big Shitpile today (a better article explaining the details is here), and the market responded with a 300-point rally, because I imagine investors quite like getting free tapayer money with no downside risk. Predictably, Drudgico connects the wrong dots.

It was bound to happen sooner or later.

Treasury Secretary Timothy Geithner – who hasn’t had many winning days in his short tenure on Pennsylvania Avenue – scored a big political victory Monday, as Wall Street traders breathed new life into his career with a stock market rally of more than 300 points.

I mean, good grief. This notion that the stock market is any kind of predictor of economic policy should have been tossed out long ago. It doesn't take a genius to realize the existence of a very visible hand at work - the biggest money in the market wants a bailout, and a bailout they're getting, essentially.

In addition, there's a media movement to ghetto-ize the critiques of the plan by the likes of Paul Krugman, painting him as a reflexively shrill hater who sees red at anything Obama proposes. There is of course no effort to actually engage with the material of his critique. I know these media stars aren't economists, but this actually isn't all that hard to understand. Heck, even Eric Cantor can come up with a Cliffs Notes version of Krugman's basic argument, which is below.

The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

What's more, plenty of smart people actually have engaged Krugman and other liberal economists on their critiques. Christina Romer of the Council of Economic Advisors says that the Administration merely seeks to use the market to effectively price the bad assets (I'm sorry, legacy loans) and the taxpayer is protected by sharing in the rewards. I don't agree, mainly because all the subsidies artificially inflate the price in the market, but those two could easily have it out. So could Krugman and Brad DeLong, who is mildly bullish on the plan.

Q: Why isn't this just a massive giveaway to yet another set of financiers?

A: The private managers put in $30 billion and the government puts in $970 billion. If we were investing in a normal hedge fund, we would have to pay the managers 2% of the capital and 20% of the profits every year. In this case, the private managers' returns can be thought of as (a) a share of the portfolio's total return proportional to their 3% contribution, plus (b) a "management incentive fee" of (i) 0% of the capital value and (ii) between 0% (if the portfolio returns 3% per year) and 9% (if the portfolio returns 10% per year)--much less than hedge-fund managers typically charge [...]

Q: So the Treasury is doing this to make money?

A: No: making money is a sidelight. The Treasury is doing this to reduce unemployment.

Q: How does having the U.S. government invest $1 trillion in the world's largest hedge fund operations reduce unemployment?

A: At the moment, those businesses that ought to be expanding and hiring cannot profitably expand and hire because the terms on which they can finance expansion are so lousy. The terms on which they can finance expansion are so lazy because existing financial asset prices are so low. Existing financial asset prices are so low because risk and information discounts have soared. Risk and information discounts have collapsed because the supply of assets is high and the tolerance of financial intermediaries for holding assets that are risky or that might have information-revelation problems are low.

Krugman responded to DeLong, and DeLong responded back. And though all that I did discern a case that COULD plausibly be made for this plan. Even if the assets are artificially priced, at least they'll be priced at all. And then the banks will truly have to put up or shut up, either selling the assets or holding out because the spread between their imagined value and what investors are willing to pay will reveal them to be insolvent. I agree with DeLong that Swedish-style nationalization would certainly be an option should this fail, and while I prefer going ahead with taking over the insolvent banks now, that's not free, and so we cannot with certainty say what option represents the biggest tax giveaway. And the downside of screwing up receivership hasn't been priced at all (though the FDIC's facility with the practice shows that to be a somewhat low risk).

I remain dubious, but the blogospheric debate enhanced my knowledge of the issue. A task that modern media never rises to perform.

...Atrios sez everyone's overthinking it:

The Geithner plan will:

1) Funnel more government money to the banksters.
2) Allow the banksters to pretend for a bit longer that their hunks of big shitpile aren't quite as shitty as we thought by using the bullshit price that this process comes up with, allowing too big to fail businesses to stay in business for a bit longer.

This might make sense if you truly believe the magic market you believe in fervently is genuinely incorrectly pricing the assets, perhaps because you genuinely believe that if you could turn around the economy fast enough that you could massively reduce expected foreclosures.

But if you genuinely believe that, I don't think you've been paying too much attention to just what's been going on in the housing market. I don't think you paid too much attention 3 years ago when you didn't realize that it didn't quite make sense that so many people could afford $700,000+ homes in Orange County. I don't think you paid too much attention to the degree of speculation and outright fraud that was happening in parts of the country.

Of course, the Administration has several programs to mitigate foreclosures, which would mean people still making mortgage payments, which would mean that these securities aren't worthless, because every payment adds to their value. But nothing thus far has succeeded on that front.