>> you put together a break the glass scenario and finish 14 days before you declared bankruptcy. >> very prudent, and to have a

document for this. >> would they have lost money. it took money and didn't put it back. yes or no? >> -- >> we are not going to accept -- the only way customers lose money other than they lose money on their positions. if you neck out their positions the only way the customers lost over $1 billion is somebody took more money out than they were supposed to? yes or no? >> that appears -- >> yes or no. >> i am not an expert on that to know whether there is -- >> not talking about that. adjust want to get some definitive answer here. under the way the law operates, and it was not taken out?

yes or no. >> i don't have enough knowledge to answer that. >> i am appalled you can't answer a simple question like that. it took money out of the count and not put it back. >> there was there was a secure calculation. >> it would be collateral in that. >> the secure calculation rules allow and permit. it can require less than the $100 required to be maintained in a secured environment. >> this was the money, of all

the customers, that is the way you lose money. >> yes. >> mr. ferber, this is the way you lose money. you took money out there shouldn't be taken out. >> with the exception of what was described -- an obligation to return customer funds. i would agree with you. >> what happened when they declared bankruptcy was no one put the money back in. >> not to my knowledge. >> any members want to have a followup with this panel? mr. pierce -- pearce? >> sorry. i was looking for my papers and

don't find your resume. >> from south africa and a degree in postgraduate degree in accounting. >> a great point to graduate with, more or less. >> the same percentage. my average was around 78%. >> how many hours of counting did you have. >> i don't know of the top of my head. four years lead original three years graduate and one year part graduate. >> trying to establish that you remember things in the past but not sir real big significant thing is. just tried to bring that to the attention of the public. they were wondering what was in

charge of these companies. and we have an overage, miss serwinski, we get into segregated funds like water poured out of that glass and it is not secured, was there a requirement to notify someone? >> there is. >> who would have to be notified? >> regulators would have to be notified. >> nobody inside the institution? >> they would be notified that requirement, the regulatory requirement -- >> didn't have an internal process that would say -- just kind of messed up here. the assistant treasurer is who we ascertained could have made those calls. we have a couple people land maybe they authorize dipping into those funds out of that little plastic glass. and who they poured the funds

out here. >> there would have been a process whereby the situation, and the committee to rectify whatever contributing factors insisted lead to -- >> there was somebody. >> yes. >> you had a process. >> you know -- we did into those funds and we are supposed to return them by the end of the day and balance of the accounts and all that jazz. we didn't do that. at what level -- did you ever discuss at what level, mr steenkamp? these guys are the umbrella. if we are doing things that take

people's money away without losing them, you lose a fair and square that is fine but the shepherd takes the will of the sheep and sells on the side at what level should you have notified not you but you are out and understand, maybe miss ferber, because now we are dealing with issues that somebody has to answer some questions for sunday so sure you have discussed that. is there a level? >> once the numbers were confirmed to be a true deficit i believe they were informed. >> say that again. >> once it was concerned there were $900 million, was -- >> with the -- >> would have been congressional. >> you got back on thursday and nobody had been notified and

everybody said ok, mr. steenkamp is saying that is not my ideal and i don't much care if they were doing that. surely there was some sequence that somebody was supposed to save the place is on fire. you are saying that never rose to your attention, that was not really your concern. at what point would you be concerned with missing customer accounts? >> i would be concerned with any missing customer funds. >> she says that we have dipped in and don't have it collateralized and that was when they and thursday, wednesday or thursday became evident. >> excuse me. i don't believe i said that. the firm was in regulatory compliance on wednesday. >> you say we did all saturday night. we did it all -- you say there's no buildup over time? >> for i am saying the firm is in regulatory compliance with

the segregated and secured rules until i was aware on sunday night that we were not in compliance on friday. >> so -- thanks. -- the last one. >> thank you, mr. chairman. i appreciate you trying to help us unravel some of this. you are the only one who has answered questions be on yes or no or i don't know. we appreciate your willingness to more than dodd questions. mr steenkamp, is it true your work consists of making assets available for trusty free? >> yes. one of the top priorities -- [talking over each other] >> from the benefit of customers? >> i don't know how -- >> where did they go to the creditors and an effigy

holdings? you don't know that either? so you wouldn't know if any of the assets would reduce the potential pool of assets available to payback customers? >> that is for the trustee -- >> you have no idea? you absolutely have no idea? under oath you have no idea what i'm talking about. >> the chapter 11 trustee is of the holding company that works with creditors but i am not sure how that process works. >> did mr. freak recently proposed paying you and others substantial bonuses for helping recover assets? >> there had been one discussion but no bonuses have been proposed as of yet or been finalized. >> do you believe you deserve a bonus? >> i believe for all the hard work we're doing we are asking to be fairly compensated.

we are not part of the discussion that includes bonuses on us. >> but not compensated for the losses you have been culpable. will you accept the bonuses if the motion is approved by the bankruptcy court? >> if the trustee determines fair and reasonable compensation -- >> you told us how broken hearted you are of losses suffered by the investors. how do you think customers will feel about using money that could be used to reimburse them for the money stolen from their segregated accounts under the water view and others to pay for the bonuses and legal fees for people running the company that eluded the accounts? >> i am sure customers want their money returned. >> are you familiar with the principal called will blindness? it is a term used when an individual seeks to avoid civil or criminal liability by

intensely putting himself in a position where he plans to be unaware of fact which render him liable. >> i'm not specifically aware of that. >> any idea whether that applies in this case? >> i would assume if one takes the fifth that is something one is concerned about. >> miss ferber, who was responsible for putting mf global into civil dislocation? >> for -- bankruptcy -- >> let me make sure. anyone from the sec, cftc or representing creditors or trading counterparts? >> the sec would have been involved. one cannot file themselves. it is the sec that has to make that application or do that. there was a period of time where

the regulators were deep in conversation among themselves. >> was mr. quote involved? >> he organized the conference call where we asked to notify regulators early in the morning on the 30 first. >> who was involved in placing the holding company m f g h in holding to creditors and counterparties? >> the board made the determination the company was off of bankruptcy. >> the board and anyone in particular on the board? >> no. directors. >> okay. i yield back. >> i thank the gentleman and the panel. at this time you are dismissed and we will call the second

panel. thank you for coming. i want to welcome the second panel. the deputy general counsel of j. p. morgan chase and daniel roth, president and chief executive officer of the national futures association and suzanne casper -- suzanne cost sir. summarize your testimony in five

minutes. >> chairman neugebauer and members of the subcommittee, my name is diane genova, did the general counsel for the investment bank of j. p. morgan chase and as such i was one of the j. p. morgan officials dealing with neugebauer -- dealing with mf global before filed for bankruptcy. i appreciate the opportunity to appear before the subcommittee to describe those events. i would also like to thank chairman baucus for noting j. p. morgan's cooperation before this committee. as i will describe in more detail j. p. morgan professionals' work through the week of oct. 24 to accomplish two main goals. first, to provide operational clearing and settlement support and services to mf global and second, make sure we did not wind up in a position where we extended credit to neugebauer without proper collateral and

secured protection. to understand what we are trying to accomplish let me describe briefly the banking service that j. p. morgan along with other financial institutions provided to and get -- to mf global. this standard services that clearing banks provide to support the day-to-day commission merchant operation of firms like mf global. first, neugebauer -- mf global maintains a large number of cash demand deposit accounts much like retail checking account at j. p. morgan and other banks. second, use j. p. morgan as well as bank of new york melon and other banks for clearing services. third j. p. morgan served as administrative agent for two committed revolving credit facilities. one consisting of 22 and one of ten banks that mf global put in place.

finally mf global entered security lending and repurchase agreements with j. p. morgan. these arrangements served as a financing tool for mf global. as noted in my written statement we worked hard with our client when it began experiencing problems. these efforts which would in turn benefit mf global's customers included several actions. we sent the j. p. morgan team to the offices from renacci to assist with its ongoing efforts to unwind its securities lending arrangements. by doing so mf global was able to regain access to the securities it posted as collateral and sell those securities to generate additional liquidity. j. p. morgan also facilitated and auction of a portfolio of $4.9 billion in securities held by mf global involving multiple market participants. this is another way to assist mf global in its ongoing efforts to

generate liquidity. we also agreed to provide same day liquidity for the auction sales where j. p. morgan was acting as an agent for mf global with respect to security and custody of j. p. morgan. this measure provided liquidity on the fastest possible basis, faster than the typical one to two they business days for regular settlement for such securities trades. since bankruptcy j. p. morgan has engaged with committee staff to assist the subcommittee in its examination. among other items we assured our perspective on the events surrounding overdrafts in accounts with the j. p. morgan london and questions we asked to make sure that customer segregated funds were not used to satisfy those overdrafts. in my written submission i explain the printable points of contact between mf global and j.

p. morgan. i also discussed the circumstances on friday the 20 eighth that cause us to ask mf global to confirm writing they were in compliance with customer segregation obligations. briefly i took the lead in reaching out to mf global's general counsel and mf global's deputy general counsel and received assurances from both of them that mf global understood the customer segregation rules and had complied with them. over the course of our conversations we discuss the contents of a letter we have requested to confirm mf global's compliance with customer segregation rules. as you heard ms. ferber testified she and her deputy raised concerns about the scope of our proposed letter. we narrowed the letter as they requested and as she also confirmed earlier during this

hearing we were told the narrow version of the letter would be signed. although the letter ultimately was not signed that weekend before mf global filed for bankruptcy we believe we had been given clear and credible assurances that the transfers were lawful. i would like to thank the committee for the opportunity to share with your respective on this matter and i'm happy to answer any questions you may have. >> thank you. mr. roth, you are recognized. >> i am the president of the national futures association. for the longest time fee decades and decades the futures industry had an impeccable reputation and well and reputation for financial integrity. the events surrounding mf global have dealt a blow to that reputation and all of us in the regulatory process need to be thinking about the types of regulatory changes we can make to try to prevent this kind of occurrence from ever happening

again. when we consider the types of changes we might implement they fall into three basic categories. there were s we felt we could accomplish only in coordination with other self-regulatory organizations. other changes with the we could implement through rulemaking and a third category of changes we think would require congressional or cftc action. i would like to describe where we are in each of those three categories and with our initial recommendations have been. with respect to the issues involving coordination with other self-regulatory bodies those issues involved how we monitor firms for compliance with segregation requirements and coordination with others is critical to us here. they are required to be members but we are the designated self-regulatory organization only for those that are not members of the exchanges it is

important to work with the exchanges to try to develop these changes. with that in mind the chicago mercantile exchange and nsa announced the formation of an s r o committee and exchange members and kansas city board of trade and intercontinental exchange in minneapolis. that group has been meeting for the last several months. we have taken a look at what we do and how we doing and how we can do it better. we develop the initial recommendation then review those recommendations with other committees including members of the s c m community and other directors and several weeks ago announced four initial recommendations and these are just initial recommendations. there's more work to be done but those four basically, require all f c ands is a the daily segregation reports with designated self-regulatory organizations. right now that obligation extend only to those that are members for which it has a -- we want to

extend that to all. in our experience that will be a very useful risk-management tool because you can see not just where the firm is on a given day but you can spot things that seem unusual and catch your attention and prompt further action will the second change we are recommending has to do with a segregation investment detail report. currently we get these reports on a monthly basis for those that we are the d s r o. these show how customer funds are being invested and where those investments are being held. we want to take that requirement and extended to all f c ms and move those to a bimonthly basis. the third thing we want to do is perform more periodic spot checks for f c m compliance with segregation requirements. each axiom is audited twice a year once by the outside accounting firm.

we want to supplement those examinations which going to detailed testing for segregation compliance and supplement those with periodic surprise visits to monitor compliance with various components of the segregation regime. the fourth rule we are proposing has to do with accountability. we want to make sure that if a firm is drawn down, excess segregated funds, if a firm is making on any given day draws down excess by 25% and two things have to happen. a principal of the firm sir jenna c e o or a cfo has to sign up on those disbursements drawing down the segregated fund and there has to be immediate notification to the regulators. that will not only affirm accountability but give regulators important notification about potential problems and capture intraday

transactions. the daily segregation reports we get now just reflect the firm's status as of the close of the previous day. if a firm were to wire funds out of segregation during the day and wire them back in by the end of the day that will not be captured in the daily segregation reports. they would be captured under this rule. those of the four initial recommendations of the s r 0 group. we have a special committee of public directors looking at other issues. one of those is f c m disclosures. we want to make it easier for customers to do due diligence on their f c ms. we are trying to identify information which would be most meaningful to customers without overwhelming them. it is information like a firm's capital requirement and segregation requirement and access leverage the firm employs. whether it is training in principle that is not hedge training. we want to identify both pieces

of information and a close to an faa to put on its web site and make it available to customers to make it easier for them to do their due diligence. let me emphasize these are initial recommendations in special committee and there are other issues we want to look at including possible changes to the bankruptcy code and look forward to working with the industry to try to develop regulatory changes that are needed. thank you. >> thank you. mr. cosper, you are recognized for five minute. >> members of the subcommittee my name is susan cosper and 9 technical director of the financial accounting standards board. i oversee the staff associated with the project on the board's technical agenda. i would like to thank you for this opportunity to participate in this important hearing. i understand the subcommittee would like to explain the current accounting and reporting of repurchase agreements. i will do my best to do so.

and would like to give a brief overview of the manner in which accounting standards. the private sector organization which operates on the oversight of the financial accounting foundation and securities and exchange commission. since 1973 establish standards of financial accounting and reporting for public and private entities. those standards are recognized as authoritatively generally except accounting principles by the sec for public companies and the american institute of certified public accountants and other non-governmental and disease. independent process is the best means of ensuring high-quality accounting standards. it lies in collective judgment and input of all interested parties. a thorough, open and deliberative process. the accounting standards for processes that are open and do

process to interested parties and allow for excessive input from all stakeholders. it is important to note that the accounting standards -- it does not enforce them. the sec has ultimate authority to penalize the public company with accounting standards. the pc obi ensures that there's an audit with auditing standards. let me try to explain how these agreements work and how they're treated under current accounting standards. in a typical repurchase agreement of somebody known as the transfer security counterparty, transfer e. in exchange for cash with simultaneous agreement for the counterparty to return the same with equivalent security for fixed price at future dates. the price paid includes an interest rate which was a lending rate for secured borrowing. motivation for entities to use repurchase agreements is finance

related. accounting guidance adds most repurchase agreements being accounted for by secured filing. the accounting guidance is based on a concept that transfer or maintains effective control of security and the most repurchase agreements since the transfer is temporary and the transfer has to repurchase the assets before the security. another type of repurchase agreement, repo to maturity is accounted for as a sale with a separate agreement to repurchase security. any transaction never actually gets back the transfer security. because the repurchase date is the same as the security maturity date, the counterparty instead redeems security and pays the transfer read the difference between the proceeds received by the redemption and agreed upon repurchase price. in this transaction it does not have a affective control over

transferred security. it will be accounted for if the repurchase agreement is considered a secure borrowing or sale. in a transfer security that is accounted for by secured borrowing, the transfer recognizes the cash and proceeds to the transaction together with the obligation to return the cash of the transfer e.. and the transfer of the sheet declines in the value of the overall net worth. in a free vote to maturity, transactions are accounted for by transfer ease of securities, it is removed from the balance sheet, was recognized. and the derivative also decognized indown&o cfationsn-to

finally you whether the transaction is >> thank you. i appreciate the opportunity. thank you all for coming today. more technical and more and lightning.

we will find out. it is clear what our role is and based on the hearings we have and research i have done. if there was a criminal activity at mf global i don't think it is congress's role to investigate. if that is the case so be it. i am not aware anybody knows that or doesn't know that. there have been two issues this panel with relation to both are really come to my attention to raise serious questions. the so-called segregated accounts. and i want to it distinguish from the way the rules were used improperly. inappropriate use of it. even if they were applied properly still raised questions. i would like to start with the fasb rules. whatever the number is. it is the rule that says it is

booked as a sale. it was reported in the media weather opprobrium or not. effectively takes it off the books. and in any normal sense of the word. even reading the fasb rules it is not a sale and they're still getting it back. i understand the opinion. i wanted to make sure -- i want to ask -- the current standards. i understand it is not your function. and this will does not have something to do with the concerns here and knowing it is subject to debate and how should be interpreted i need to know whether fasb is reviewing

whether this is an appropriate rule moving forward in order to provide true transparency and consistent application of whatever we come up with because i think this rule is applied inconsistently. just because it is a difficult with what of subsets. i want to hear from you whether fasb is referring, rules as you have them. not giving away what you may or may not do but i need to know whether you are reviewing them with the thought of possibly addressing them at some point. >> thank you. fasb strive to continue to improve accounting standards and once we became aware there was concern with respect to repo to maturity and repurchase agreements in general we undertook an effort to understand what concerns were in the marketplace. we performed an extensive amount of outreach to practitioners to users to understand what the

concerns may be. that out reach did not identify that there were application issues associated with the rule or diversity in practice. however users have advised us that they have concerns because of the market practices that changed since the rule was originally put in place. that is original rico to maturity securities, were high quality treasuries. and companies are now using riskier securities. taking that information, the board has added a project with the agenda to those rules to understand whether there is changes or enhance disclosures that need to be made. >> in the normal course of events, is an ongoing process. that is what we do. in the normal course of the events what would you expect? would not hold you to. give me a ballpark idea how long

you think it might take for fasb to concluded review and decide to amend or not to amend. >> we expect to start discussing the changes that we made and we expect to issue a standard by the end of the year. >> i appreciate it. just out of curiosity, if i had some money i was holding with you, would you and chairman neugebauer pick the phone and say i want to use mike's money for a day or two. i will pay it back tomorrow. would you let him do that? i know he is a nice guy would you let him do that? >> not sure what the context is that doesn't sound like i would. >> i feel better that you wouldn't because i am not aware any financial institution in the world would let that happen in a legal capacity. yet we have commingled funds.

it is kind of funny. i think they should be in politics. comingle funds get called segregated accounts. it is the opposite of segregated. it is coming. under that responsibility from everything i read how could you possibly know whose money is who's in a coming gold accounts -- coming gold account? >> to keep a minimum of client money in the account belongs to the f c m. it has the obligation to figure out what money is there and what money belongs to clients. >> the f c m in this case would be? >> mf global. >> there is no way you would know the account of $100 or $100 billion how much is customer money and how much is not customer money. >> correct. we would not have the information. >> you have to trust the other guys. >> they have a legal obligation

and they are regulated entities. >> i will tell you is that i read your statement. i like some of the things -- i congratulated for. you are trying to address this very issue. i am going to go further in a minute. the other s r os following your lead or reviewing this issue or making proposed changes to how this gets done. >> there we go. the four recommendations are supported by all of the s r os as well as other exchanges we spoke to that were not on the committee as well as our f c advisor committee we spoke to as well as our public directors on our board. they have all been supportive. >> can i go back. don't mean to use of your time. >> you can try. i just want to point out excess segregated funds are important thing to the protection of

customers'. there are multiple customers with money in those accounts. if one customer incurs substantial trading losses the excess segregated funds is a way of making good the customer shortfall to protect all the other customers. >> at some point somebody has to explain to me how using money protect my money. today is not the day. i think i know the answer but i will ask anyway. why don't you just say stop comingle funds. if you want to invest any of the companys good luck. why do they use my money? >> the reason we allow them to have their own funds in the segregated account is precisely the reason, to protect other customers in the event of one

customer incurring substantial trading loss and shortfall in that account. >> how does that protect me of some other customer loses their money and unknown to me somebody else uses my money to cover their loss. it wasn't my game. it is my money. i didn't play that game but you're taking my money to protect some other customer. lost their money because they took a gamble. >> can i try to explain it. if there is an axiom which two customers and the customer has $100 in the account said that the fed requires $200 customer number one loses not only all of his money goes into a debit positions so there is -- he has got a $50 trading loss. that account which had $200 now he has 50. to protect that customer who didn't have that was that is why the firm has its own money. >> i didn't have the loss. i am overtime. we have to go through this

another day, mr. roth. have yet to understand how me not gambling these gambling losses somehow helps and i am willing to be educated and looking forward to education but it makes no sense anybody else i know except is there anyplace else where people can pick up the phone and use other money at j. p. morgan? is this the only one or is there somewhere else? >> i'm not aware of any other. >> i am way over. >> if it is possible -- >> thank you. >> i would say one of the things that is the goal of this committee is once we have completed our investigation and oversight, we want to publish a report approved by the committee and one of the things we hope to accomplish from that is once we

ascertain where the pitfalls are we want to work with everybody to come up with what are reasonable solutions if there are holes in the current system we need to fill and obviously the mf global thing points out there are ways to do that, one of the issues we have to address is you can pass all the rules you want and that will not keep malfeasance from happening so we look forward to having that discussion and yields to the gentleman from new mexico, mr. pearce. >> just for the record i have not seen mr. neugebauer gambling his life savings away so i appreciate mr. capuano adds generosity but want to keep the good name of the chairman clear. mr roth, if i hear what mr.

capuano is saying should there be a statement that warns mr. capuano that his money could be used to cover other people's losses? >> i am sorry. >> that wasn't in your suggestion. >> there's customer risk of loss. one of the things they talk about in segregated funds and that is a situation in which one customer incurs huge trading losses. the firm's own capital is not sufficient to make good those trading losses that can result in a shortfall in which non defaulting customers--has nothing to do with mf global. >> our customers know that? >> there are disclosures about that but i think it certainly is an issue we can look at to see if those disclosures can be sharpened and made more clear. >> those disclosure there something like the apps

disclosures. >> not that. [talking over each other] >> that is an area that is right for study. >> it should be in blinking lights because people loss $1.6 billion. [talking over each other] >> that sort of risk loss that i talk about as far as i know had nothing to do with mf global. >> is it -- >> i don't know the effect of this investigation. there's a shortfall in customer funds and that shouldn't happen. >> i shouldn't be able to take that. do you know what is dipping into segregated accounts. >> we monitor the firm's on a daily basis and get special business for these firms to december -- confirmed all the balances from outside sources. i'm not aware of any other firm that has a shortfall. >> we are monitoring mf global?

>> we were not the designated self-regulatory organization for mf global. >> who were the other self registered organizations you would not be monitoring? >> there is around 75 or 18. [talking over each other] >> holding customer funds and trade futures. we are the designated self-regulatory of 26. the other ones for the most part are the cme or the diaz ro. the they sro. >> i got the money. i got mr. capuano's money in some security asked me to buy. is that the initial transaction? >> they should -- [talking over each other] >> can understand. >> congressman capuano would have security. >> about this for you.

[talking over each other] >> the rico counts. [talking over each other] >> it takes the same and sets it over here. and back against it. and then we by and other security from someone else or ourselves so -- >> you enter into -- >> have done something with the money. they want -- >> they do something. at the same time you enter into a for purchase commitments? [talking over each other] >> all sorts of legalities. i take money that he gives me and i trade that security to someone else in cash. i have control over and get cash. i bring that cash back and mf global assisted the money in the bank. there were not keeping it in j. p. morgan's bank but doing something else. they were buying something else.

>> i can't comment when they would have done with the cash. >> it is possible to buy something else. >> they can use the cash. >> my question is is there a limit. use and that is all kosher from accounting standards. >> in rico to maturity transaction. >> is there a limit to the number of times, traded over here to get money back. is there a limit where the accounting board says that is confusing is based on that -- is there a limit? >> it is a regulatory matter. >> you accountants don't think investors would really have an opinion on that? >> the company that transfers

the security -- and the security decline recognize the liability. >> we gets back to the initial transaction. and the accounting standpoint, i don't know much about -- group bid is growing up. and account of a significant thing for investors to know their money is being -- back and forth and back and forth and a house of cards without much underneath. >> no doubt that requires the company that transfers the security continues to make disclosures about the involvement. >> when you start the meetings we will be talking about these

things. most of us are not real knowledgeable about mf global other than the one$.6 billion worth of money disappeared. we have a panel full of people none of them can remember and they don't know who did the transaction. no one had to tell anybody else anything. we are the ones to lend to the questions back to the house. you guys are the sheriff so please mention at some point you might want to consider the ethical legality questions. you have been very tolerant. >> i would like to let the gentleman from mexico to know that if you know how you do that you can call mr. corzine. i will yield to mr. canseco >> why except assurances from mf global at the firm was not moving to a funds out of

customer accounts? >> as i previously mentioned, it is the obligation of the fcm to know what funds in the account are their own and what are the customers's are counts. therefore, we wouldn't have the information to be able to tell. though normally we don't ask questions for every account transfer. that would be untenable in normal banking relationship but in this case we did take the unusual step of asking questions for two reasons. first, it has been my experience that when firms had issues with compliance with client segregation rules it is often due to illness and operational errors and those operational errors tend to occur under times of stress when there's a lot of trading and things going on in the company so given the

situation and mf global i felt that was something that -- it gave me some pause. the second was the funds -- they were going to ultimately be used to pay an overdraft in an account with j. p. morgan. so therefore if there was an error j. p. morgan would be benefiting and we did not want to benefit from an error. so we thought it was prudent to seek assurances. >> is that why the first letter was written so broadly? >> the first letter was written broadly because it put together assurances we hadn't really -- what do we really need? >> subsequent letters satisfied their needs and desires? is that correct? >> that is true. we revised the letter to reflect what we really wanted to know. >> and it was sent to you?

>> i personally had conversations with ms. ferber and her deputy who gave me oral assurances that they knew the rules. they were in compliance with the rules and when a revised the letter. referred to the two transfers i had concerns about. that the letter would be signed. >> one more question. on october 29th mr. corzine said that j. p. morgan was a possible buyer of mf global. is that true? >> there was some discussion of j. p. morgan about evaluating whether pieces of the mf global business might be attractive to us and after an evaluation we decided it wasn't a good

busine business. >> thank you. mr. roth. congress passed the dodd-frank bill. with more rules and regulations are an adequate substitute for enforcing existing laws. right now the cftc is writing new rules at a furious pace but in the case of mf global they failed to and force the most basic of rules that monitor commodities accounts. in your opinion, how do the new rules and regulations written by the cftc benefit producers of whirl areas that in many cases rely on small banks for credit? >> the expression is above my pay grade. >> can you answer nonetheless? >> i have been here for 20 years. i have been in the regulatory process for a long time.

and i know that whenever bad things happen there's a tendency to write new rules and that is sometimes very helpful. the rules we are proposing are helpful. but ultimately it comes down to enforcement. i don't care what set of rules you have. at the end of the day it is about enforcement. that is true about the futures regulation area and will be true in the swaps area as well. >> should the cftc be focusing its efforts on writing new rules or do you feel they need to first to a better job and forcing them? your answer is yes. >> the way the statute is set up is the cftc is an oversight agency and an faa is not an oversight agency for the cftc. >> thank you for your candor and appreciate your questions and yield back the balance of my time. >> i think the gentleman. i have a couple of questions.

mr genova, this 175 transactions, lot of scratch and the -- scrutiny with jon corzine. would give some of that scrutiny was precipitated by the fact that mr. zubro called jon corzine and said if you are overdrawn you have to take care of that. would that be a normal call that he would call the ceo of the company or would you have called the treasurer? what was significant about him calling jon corzine and telling him he was overdrawn? >> in the context, in the context of the fact that the company was downgraded to junk, mr.wrote --zubro would have concerns about the company. it would be his normal practice if there were issues such as a

large overdrafts in the account. he would call the most senior person that he knew. this would be something that would be actually an ordinary step for accompany that was in some distress. >> was it this time you dispatched your team to go over and have a presence? when did you dispatch your team to go over to mf global? >> we went to mf global friday, october 28th. it was to help them see if we could do things to help them raise liquidity. >> that was which they? >> friday october 28th. >> is that the same day? >> it was the same day they covered the overdraft. >> one of the things you said is dead but other was placed on

this company. you are looking at deposits to make sure everything is the appropriate. someone was approving those transfers in j. p. morgan if you are on -- alert? >> i want to clarify what does that alert means. it means because of concerns about the company's financial condition, we will not transfer funds out of the account unless there were funds in the account. in normal course is to facilitate client transactions. we will transfer funds from the accounts that are not there in a sense creating an overdraft. basically the debt but alert mean no overdraft but it does not mean we approve each transaction and if there is money in the account and the client asks us to move the money

we execute the client's instructions. >> you have to have the cash in the account. thank you. mr roth leaders and i used an analogy about how customer funds went missing, this bottle was full and the water below this belongs to the customers and water below that reported in to that glass and that is the way customer funds go missing except for the fact that if somebody -- some of the people in the account had been losses -- do you have any reason to believe there were significant customer losses that precipitated the fact that farmers and ranchers bottle is empty? >> my knowledge is based on what i read in the press. what i read in the press i have no reason to believe that is involved. >> the money went missing,

people took money that should not have been taken out. >> as far as i can make out that is right. >> i want to thank this panel. the previous panel. particularly thank the members and ranking member. this is an important hearing that is important not only to the people that lost money in mf global but extremely important to the marketplace moving forward. mr. roth would probably agree with me we need to make sure people have the confidence that when they do business with these firms that their money -- the only risk they're taking their own risk and not taking the firm's risk as well. i would close by saying we will keep the record open 4 additional days and some of my colleagues might have additional questions of the panel. your replies to that will be made part of the permanent record and with that, we are adjourned.

[inaudible conversations] [inaudible conversations] >> the cato institute host a series of panels examining u.s. policy towards iran. our live coverage begins today at 9:00 a.m. eastern on c-span2. fellow c-span's local content of vehicles throughout the weekend

as booktv and american history tvx for the history and literary culture of little rock, arkansas saturday starting at noon eastern on board tv on c-span2. author stock leon a little the riots and killings of at least 20 african-american sharecroppers. >> you had calls going to all up and down the mississippi delta saying blacks were now in revolt. ..

>> these stories and others from c-span's local content vehicles in little rock this weekend on c-span2 and 3. >> in march 1979 c-span began televising the u.s. house of representatives to households nationwide, and today our content of politics and public affairs, nonfiction books and american history is available on tv, radio and online. >> on or about friday, november 21st, i asked admiral poindexter directly, does the president know? he told me he did not. and on november 25th, the day i was reassigned back to the united states marine corps for service, the president of the united states called me. in the course of that call, the president said to me words to the effect that i just didn't

know. those are the facts as i know them, mr. neils. i was glad that when you introduced this, you said that you wanted to hear the truth. i came here to tell you the truth; the good, the bad and the ugly. i am here to tell it all, pleasant and unpleasant. and i am here to accept responsibility for that which i did. i will not accept responsibility for that which i did not do. >> c-span, created by america's cable companies as a public service. >> live here in the nation's capital this morning, joint chiefs of staff chair martin dempsey and about 750 military leaders and psychological health care experts gathered for the fourth annual warrior resilience conference hosted by the defense department 40 help service members' families with

defense-building techniques. consumes more than $53 million of the overall budget. this is just getting underway. >> bryan gamble is the deputy director for the tricare management activity. general gamble directs and coordinates the health care of 9.6 million uniform service members, retirees and their families. worldwide. so without further ado, i'd like to introduce brigadier general bryan gamble. [applause] >> thank you very much. it's great to be here today and great to serve our warriors and families with you side by side. um, first slide, please. next one. i got it right here. one of the things that's important to recognize especially in our military health care system is really

it's a quadruple aim with readiness really at the core of that, of that circle. because everything we do is about supporting the troops' families, retirees that have served our nation and will continue to serve our nation in the future. readiness has many components, predeployment, postdeployment, it also is important to recognize of the family health on a day-to-day basis. likewise, readiness also implies personal and professional competency of those in our medical forces because they need to be ready to support the war fighter whenever and wherever he or she goes off to fight. population health. it's important that we understand the dynamics of our patients, our families as a whole so we can see where the trends are going, be it tbi, pts or infectious disease. because really that allows us to

provide resources to really impact how we care for our families. and that also helps us derive quality health care outcomes. and how we shift that to outcomes of the patient and the family rather than as things have been in the past, you see a particular physician if your knee hurts, you see an orthopedic physician. you need that stress relief, the running to help you out. so there's that dynamic, that holistic person, that holistic patient we need to always keep focus on because, ultimately, we want to derive a position patient experience and positive patient outcome, one that you're happy with, providers in a system that you'd be honored to go back to and that you want to go back to. and likewise, too, looking at the cost of what we do. because we want to do things that are cost effective. and great examples of this i'll show you in a little bit. how we miss canceled

appointments or no-show appointments. again, cost a lot of money, but if we could impact that by having people show up when their appointments are due, we could save money that we could reinvest into the system. but again, it's a relevant continuum for our readiness. next, please. you know, we have many metrics and goals that we look at when we do our readiness metrics. their vary -- they vary, really, between all components. but, you know, derived from our dod eye, six elements that constitute, for example, pha, dental readiness, no deployment-limiting conditions, current immunizations and current labs, particularly dna, and possession of appropriate medical equipment. now, what we're measuring is really looking at the total force. and be i think we're doing an improving job as time has gone on because there's more and more impact on that. now, i would say that deploy

about doesn't always have to have health care as the determining point. there are also administrative factors that enter it as well as ucmj issues that a soldier, airman, marine might have. but medical issues comprise about half of that. but this provides a good indicator as the readiness of the total force and components. and, for example, as i see here in calendar year '11 total force readiness rates increased in contrast to the prior three quarters. drivers for those are reduced deliberate phas, reduced deployment-limiting conditions, reduced percentage of delinquent dental exams and reduced nondeployable dental conditions, so a lot of effort's been placed and a lot of progress has been made, so good job to all of you out there. now, again, the chairman and his program of total force fitness

really as you can see here is composed of many elements some of which are, of course, medically related, but there are a lot that also are associated with it. for example, if you don't have good nutrition, that does impact your health. if you don't have good sense of yourself, good spirituality, that does impact your sense of well being and other parts. so, again, how do we look at the soldier, sailor, airman, marine and family member as a total package, as a 40 let'sic rather than a sum of the part i think is really crucial for our success. there you go. now, again, one of the things just as an indicator of what's been going on in the total force that i think is important and for everyone to realize is the behavioral health aspects both in terms of family members, in the purchased and direct care system.

now, in response to the increased demand there have been a lot of emphasis placed on acquiring new assets be it psychiatrists, psychologists, behavioral health specialists into the direct care system but also accessing them true the purchased care system, through the tricare system. the individual managed care support contractors have done really a wonderful job to help make the access, um, available. one of the things that we really always need to keep in mind, too, is the continuity of care because i think that will really help in the long run to establish successful outcomes for our patients as well as improve our readiness in the long run. finish -- one of the key points here that i think to show some of the wear and tear on the force after a decade-plus of war is just the physical therapy

impact. now, as you know, a lot of physical therapists have been deployed with units, and this, i think, is an important point because truly our forces are professional athletes. and as professional athletes, again, when you sprain or injury injury -- injure a muscle group, it's important that you get that physical therapy, get that exercise, get those treatments so that it doesn't become a chronic, prolongs issue. as well as chronic pain. one of the things we're seeing, too, in chronic pain is that physical therapy's a key component as opposed to medication to help alleviate that pain and get that individual stronger over time. now, i just want to point out, too, as you can see in the direct care systems in the military truman facilities since 2005 we've gone up about 50% in the number of visits that we've had. but as you can see in the

purchase care system it's gone up by well over 100 president. why -- 100%. why is this important? because one of the things we need to look at is how we can bring that back in because possibly the mtfs, military treatment facilities, because being on post, being on base or away from work if you have to go off post, taking time away from your unit that is really critical to that soldier's success and successful outcome. now, i would add, too, one of the things from three commands, one of the most common clinics that did not -- that had a no-show rate when somebody had an appointment that they did not show was physical therapy. and be principally on friday afternoons. and so i would urge all of us to be, understand that and especially to our sergeant majors and commanders out there and senior enlisted. get together with your mtf commander. figure out, you know, who's missing appointments, the

number, the rate and so on so that you can positively impact that making sure that joe snuff snuffy, sergeant snuffy, private snufff gets to that appointment on time because this is truly one of the big cost things that you could positively impact by emphasizing, you know, showing up on time and showing up when your appointment is due. because, again, with this said how can we adopt different ways of looking at trying to recapture some of this care in the mtf so that we can make sure we have better outcomes in the long rung. run. now, general jorjo at the military health system conference back in january brought this comment to me, what can we address in the white space? and she termed the white space as the average time we spend in

the medical appointment a year is about 100 minutes. but there are more than a half a million other minutes in that year that our choices can impact how healthy we are, our readiness, our family's care, our family's support. how do we make those positive choices, and what can we do as leaders to help shape that of our soldiers, sailors, airmen and marines in a positive fashion? general stone, major general stone of the army had this slide up where, you know, if we make sure that we're attached soundly to the ground and well grounded, we can weather any storm be it personal or professional. and it's not just one thing, a multitude of things from who we are, from our significant others to our health, to our sense of, sense of being, to our

professional satisfaction, to our job, to our faith, to many things. so, again, it's not just one item, it's a whole plethora of things that pour into our ability to maintain and sustain a deployable force. now, this is dr. woodson's slide, the assistant secretary of defense for health affairs. and i put this up here because, again, i want to emphasize it's not just the art and science of medicine that go into health care to health, because that's where we want to go, but there are many, many components that enter into how patients, families, communities feel about medicine and medical care. so there's a lot that goes into it, and we're all part of that great equation in here in making sure that we take care of our forces. family readiness has been a real critical concern of everybody's

because, again, they are the backbone of our armed forces. without the families we would definitely not be where we are today. so, but they, too, have had the stresses and strains of a decade-plus of warfare. as the new england journal notes that when they studied wives and spouses of deployed soldiers, they found higher rates of behavioral health issues compared to those who have not been deployed as you would expect. and the length of deployment seemed to impact that more significantly. they also studied children and found that children, um, who had significant higher levels of emotional difficulties compared to those children in the general population. again, challenges as deployments and multiple deployments take their toll. um, and, again, increased incidents of problem in the children when the parents

themselves are having difficulties. but that also comes to us to remember that we have many resources that are available to us and two that just came to mind our military one source is a great counseling tool for people to reach out and get the help that they need in the tricare system, the purchased care system. their family members can get eight outpatient behavioral health visits per year, um, without a referral or prior authorization. so, again, a lot of opportunities for those in need to get the care that they so deserve. and again, going back to how do we get from health care to health, and getting back to general jorjo's comments on what are we doing in the white space. there's a lot we can do. a story just came out, i think, on tuesday from the centers for disease control that half of the cancer that we find in the

population can be tied to beastie, inactivity and title. and diet. so those are things we can positively impact if we took some time and paid some attention to it. and that's only second to tobacco. and interestingly, getting to tobacco use, a story yesterday i found one person dies every six seconds from the effects of tobacco due to cancer. and in china the figure that they had is 1.2 million die in that country each year from the effects of tobacco, and it's going to increase to 3.5 million per year by the year 2030. so, again, there are a lot of ways that we can impact during that white space our health, readiness and restoring the force. now, there are some campaigns that are out there, and one that you might know about is the

first lady has a campaign on beastie prevention -- obesity prevention that we're getting active in. also there's for anti-smoking and alcohol use, everybody might be familiar with that guy. and you can quit for drinking and tobacco use. coming out with an app for that guy so people with smartphones can reach out to that guy who's not doing what they should be doing, drinking too much or whatever. um, there are partnerships out there for text for baby and parent review that offer tips on health and information for new and expecting mothers. but interestingly, this obesity chart that you have here, again, we have a lean, mean force, but it's interesting that about a year out afterwards a significant rate of obesity when people retire, how people get out of the pt habit and tend to escalate a little bit in body

weight. but again, we have choices that we can make that are very important, very critical to our long-term health and that of our force as well. now, one of the points i had in the readiness, initial readiness slide -- next slide, please. there we go. it's about maintaining and sustaining our medical force as well because that's a critical part, i believe. because, truly, our military health care system is a training base, a skill sustainment base and health care power projection platform that are critical at home and in the field to take care of our forces and families. um, and one of the key things, my last job as commander down at eisenhower regional commander for readiness in the southern medical region was how did we get commanders to identify problems before they become problems. and troopers.

because, again, a lot of you commanders and families are in that white space and interact with the service member, family member a lot more frequently than i would as a provider in the clinic setting. and so it's important that, you know, you understand your troops, you understand the way that you as a senior leader can get to the care or the assets that soldier, sailor, airman or marine might need. one example was a medical center that sought to help to work on those soldiers with profiles and get them ready, get them there from temporary profiles back to full status. important to understand, important to kind of see who's out there. again, getting back to those folks with missed appointments or no-shows for appointments. as a commander, it's important to you to know that that soldier, sailor, airman, marine

is where they're supposed to be, getting the care that they need, but likewise, is there a problem that you need to know about before it becomes a bigger problem, a nondeployable problem, or other issue? it's important for our medical force to sustain currency and also the competency of the skills that we do. one of the things that's out there at the military treatment facilities that really helps with continuity is the first right of refusal. rather than going out into the purchased care network, the treatment facility commander and staff kind of look through what's going out to make sure if it's a continuity of care issue or a skill issue that they have, to keep them, you know, close to home. recognize, again, the interdependencies of both what goes on in field medicine and garrison medicine, the sustained readiness. and again, as i said, the health

care force is truly a training base, a skill sustainment base and a health care power projection platform. because really we're trying to maximize all opportunities for our families, our service members and retirees. so it's important when they communicate with their health care system that they question, advocate, learn and grow because truly people are are most important asset. so in closing, one of the -- before i open it up to questions, again, it's truly a partnership that we have between all of us to help maintain, sustain and enhance our warriors and families for a better tomorrow. so pending your questions, that concludes my prepared remarks. [applause] >> good morning. >> good morning. >> lieutenant commander christine grisesome from central florida, and i have two

questions for you. one is i work eight clinics because it's very hard to get child psychiatrists. and what i find is these clinics demand the patients come every month which when you have a 90-day script or the capability for that, it just puts a hardship on the family. first of all, have we considered any tricare clinics? second question is, well, actually in the public sector they have sac teams so when people don't show up, they send people out to check on them. and i know there's been a lot of tragedy with depressed mothers, and we need to catch these people before they sink below the horizon. the second question is, do we pay for cam like yoga, acupuncture? many people don't want to be on chronic pain meds. and if we could do something for that or even for wellness such as family gym memberships.

i know we have nutritional slides. but what about something that gets them up, gets them moving and start working on the adjustment that people have to the soldier leaving? >> thank you very much. yeah, i appreciate your comments. there are things that are able to be paid for, and there are things that are not. and that's principally driven by health and human services and regulation. so, again, such things as gym memberships and acupuncture in the purchased care setting, um, unfortunately aren't covered. again, it's a good point about making sure, i forget the term you used, the team to go out and find those, but again, that's the use of the command. and the linkage between the mtf commander and the health care team and the command teams on post because that's really critical in my view to understanding the dynamics and health care of the families,

principally the soldiers as well as the families of what's going on in that dynamic. and you, i missed one part that you had. i think it was the first part. >> most of the community mental health clinics in order to stay alive financially the patients have to come every single month. well, that means pulling the kid out of school, pulling mom out of her job, and if military man is home, he has to come take the kids. and it just doesn't seem reasonable to do that to the military families. but that's how these community mental health centers stay alive. and can we not look at free-standing tricare clinics in the -- >> is that in the purchased care setting or the -- >> it's in the public sector. >> okay. i'll have to take that back and -- >> yeah. because i can give them 90-day scripps, but some of these clinics won't allow you to give 90-day scripps.

the patients have to come every single month in order to stay financially alive. >> okay. let me take that back. thank you. >> can thank you. >> we have a question from the captain off on the side over here. >> hi. >> hi. good morning. >> captain julie vanover, i'm a social worker of eglin air force base and curious about your influence with treatment such as chiropractic and also with the hyperbaric chamber being able to treat tbi and the good research coming out with that. and are you making plans to coffer that? and -- cover that? and also, it's just i've gotten a bit embedded with the dod, and the skeletal system has been a big education for me with the need for chiropractor. i can't say the word today. >> >> i understand. thank you very much. chiropractic care is under a

demonstration project in some treatment facilities. it has not been covered in the, in total in the purchased care system or at all in the purchased care system. um, now, as far as the tbi and hyperbaric, i know that's a study, and identify not been privy -- i've not been privy to any of the results on that, so i really can't comment on that. >> we have a question from the commander over here. >> good morning, general. >> good morning. >> um, i used to work in the navy mtf system as a provider, and i personally found it difficult to get to my own appointments. and i worked in the same building. um, so my question to you is things like physical therapy, occupational therapy, sports medicine, chiropractors, is there any way to, you know, work with these people flex time, after-hours appointments?

that's what makes purchased care so attractive. i could go out in town to a 5:00, 6:00 appointment, my workday might have been over between 4:30-5:00, and i could get in my car and get to that appointment. >> exactly. >> but on the same base in the same building i could not make an 3 1:15 -- 3 1:15 appointment. i just couldn't do it. and that's the reality of people being deployed. you've got half your shop, you need this guy. are you going to cut him loose for a physical therapy appointment? that's the tough part about mtf care. it's not that the care is any better, worse or substandard, it's that you just don't have the time. >> well, i understand totally. and that's an important command decision, to make that time and to make that appointment. um, also commanders need to look at what's going on in the population that he or she is serving, in my opinion, and tailor the product and the

product lines, the clinic hours to meet the needs of the patient. i was looking at er stats for the last year, and the number one diagnosed, number one and number two diagnosis for people going to emergency rooms in the purchased care or in the mtf care is strep throat. and that's, if you can imagine -- >> uh-huh. >> -- it's because the hours that that child or that mother or that father has to get that child seen. that's expensive care when you go to emergency rooms. so, again, commanders need to look at what the demographics are of their group and tailor the products, services and clinics to meet that group, in my opinion. >> is so hospital commanders can do that, sir. they can make those rules, they can work with their contract personnel, they can have hours to late night. >> that's why they're commanders. >> okay. i was just curious if that was a

dod thing or not. [laughter] >> the general is here, sir. he should be walking in shortly. >> um, i have the distinct ohioan and pleasure and privilege to introduce the next speaker, general martin e. dempsey, who currently serves as the 18th chairman of the joint chiefs of staff. in this capacity, he serves as principle military adviser to the president, the secretary of defense and the national security council. by law, the nation's highest-ranking military officer. prior to becoming chairman, he was the 37th army chief of staff. a new jersey native and career armor officer, general dempsey is a 1974 graduate of west point. after more than 37 years of service, he has commanded at every level, in every echelon from platoon to combatant commander across the united states and the globe. without further ado, please, help me welcome general martin dempsey. [applause]

>> let me say hello to this distinguished-looking gentleman here. >> how are you, sir? .. so some of you knows that when i give you the chance to speak regardless of the venue weathered is the venue like this which is after the human dimension or whether we're talking strategy or the budget, the biggest part of my life.

in any venue like to make note of what other things have happened this day in history and i do that because we have to remember we are sort of a continuum of civilization. we are not really, the with might feel like it, confronting any problem, there are very few problems where you are confronting them for the first time. there may be a message for resilience, hang in there, we have been through this before. i will leave you to make that connection. on this day in history when i picked out this time was on march 30th of 1880, i was not around and, but in 1880 the famous irish poet sean o'casey was born. if anyone heard of sean o'casey i will be amazed and extraordinarily impressed. one says he does know sean o'casey. he was a rogue irish playwright

of the nineteenth century, early twentyth century. passionate writer eager to apparently strikingly height--strikingly handsome man. why is the chairman talking to this group about a dashingly handsome rebel irish poet? and a deceased irish poet at that. the answer is i want to make the point that old irish guys are usually very good looking. i had to reach for that one. today was a boring day in history. [laughter] my aspiration for you all is you keep it that way. you keep your part, i will keep my. put up a slide for me now to make a few points pertinent to this gathering. i tell people the reason i travel is to get out of

washington d.c. and put the oxygen back in my lungs. that is not an indictment on the quality of the air here. some other men you might figure it out. the other one is because you got to get out and feel what is going on in the world in order to really appreciate. you can read about it. you can learn about it. you can understand the processes that private whether it is nato or the united nations or coalitions here and there. until you get in and touch and feel it i don't think you can appreciate it and appreciate in particular its complexity. for that reason i carry images around in my head. not power point slides. it is true. i like to have an image to capture my thinking at any particular time. not a bunch of words gambled on a page.

so this is the image that i carry around most often although i have four or five that i carry around. this wouldn't to me embodies our profession. it embodies our profession because at its most fundamental, what holds our profession apart is we are trust on a slide there. the relationship that exists between men and women in uniform, their families and the society. because if you look at that picture with me for a moment the squad leader and that is a squad leader and i know i am chairman of the joint chiefs so some of my images are joined and this one isn't. this happens to be army joined. i have other images of parrot jumpers in the air force hanging under a cable. incredible stuff really. this is an army squad leader in afghanistan. the sergeants don't like me to use this picture because there

are a handful of uniform violations. no eye protection, sleeves rolled up, scarf, the old thing but i like it because you can see in that squad leader's eyes the complexity of the motions that exists in our profession. fear and courage all wrapped up in the same head at that moment in time. certainty and uncertainty. confidence in uncertainty. right there in that picture in that's what leader's eyes. the other thing you notice is he is not worried what is on his right or left and he is not worried about that because there is a young man or woman in this case, woman to his right flank protecting him because he can do his job. it is clear the squad leader is taking care of that threat by taking the actions he is supposed to take. you also see that he has a hand mike in his left hand and he is

calling for something. i don't know what it is. you don't know what it is. could be medevac, direct fire, close air support but based on the way you can see his face configured you know he is asking for something he really needs and he needs it pretty quickly. the other remarkable thing about our profession, our country is whatever he asks for he is going to get. that is what sets us apart and he is going to get it whether it is kinetic ordinance, supplies, o what you are here to talk about today. we are going to get these young men and women because we have to, as a matter of trust we are going to get them the life skills, the confidence, the hope which equals at some level the resilience that you are here talking about in our force after ten years of war. let me link one other thing. you notice the squad leader has

got his left hand in the air and a ring on his left hand, left finger indicating he is married. when you think about this bond of trust it doesn't stop at the forward edge or rear edge of the battle area. it has to run all the way back to hometown u.s.a. where he has a family and this bond of trust that defines us as the profession and to which we have to commit ourselves every day, don't just do it once or twice but 24/7/365 and do it when on active duty and went off and unless we earned it every day here is the point. we have to commit ourselves to this bond of trust every day. more importantly you have to earn it every day. you have to earn it in the way you develop yourself so you can live up to the trust of a man or woman on your left or right. you have to develop your subordinates, co-workers, you have to earn it every day.

you wake up in the morning and put on the uniform or put on your suit because you are a member of the team working on behalf of these young men and women and go to work and say is this just another day or is today another opportunity where i can earn this bond of trust that marks it as the profession. if we do that one thing think about our profession as united and commit yourself to earning it every day. i don't care what happens to our budget or countries in world we will be fine. but if we lose that it doesn't matter how much money we throw at ourselves. let me link the idea that you are confronting today to my -- i will call them focus areas.

the first one we have got to achieve objectives in current conflicts. what you are here doing is exactly that. your helping us achieve our objectives by seeking a deeper, richard understanding of what has happened to us over the last ten years. that is what you are doing. and what we are going to do about it. what do we do about the fact the ten years of war has put pressure on the force. and as a matter of trust you're here to solve the problem. developed a joint force of 20/20. only a handful in the room were in the army because little anybody in the army in the vietnam war? i came in right after.

and what that conflict did, the human dimension of our force and we added complexity of switching to an all volunteer force in those years. we put enormous pressure on that force but we didn't have anything like this. we didn't have any appreciation for how you build lifestyles, commitment, the hope and the resilience. we just did it and assumed, it worked out fine because the force was able to absorb it. i don't want to repeat that. i don't think anyone wants to repeat those years where we took this marvelous fighting force and other services and pulled them back to vietnam and change

the entire equation. there are other pressures. joint force 2020, that force coming out of vietnam didn't really recover until the early 80s. maybe the mid 80s. i mean recover sense of pride, and what it had to do. military education to real hard training. we didn't recover until the early 80s. wasn't because we sat around not interested in recovering but it took that long. world is changing fast around us. of we wait until 2020 to build the kind of strength. i fear that if we wait and not

address this now not or will we not be doing ourselves any favors but we won't be doing the nation any favors. this profession -- if you think of one word to describe our profession, unique among all others it is trust. what you are here doing is getting together, share best practices to wring out the problems, beside how we can do what we need to do to determine how to do it smart and efficiently in an environment of challenge resources but always to keep that human dimension and keep reminding ourselves this is about people. this is about people. this is about people. somebody said to me once if four years from now i am chairman for four years because as you know i am always one speech away from ending my career, this one won't be it. today as a boring day in history. if i am the chairman for four

years somebody said what do you want people to look back and say about you ten years from now? i said that is a really good question which i should probably have thought about a lot more. off-the-cuff, i want them to say if that is the chairman that got the people right. i am telling you. i am in 37 years. brian reminded me of that. i didn't have to remind me every day when i get out of bed i remind myself. any time my craw a lot of an airplane i remind myself. the fact is every day i remember. we tend to compartmentalize things you don't want to remember but every day i can remember almost 38 years has been an absolute blessing. and i want everybody to feel like that. everybody can't be chairman. everyone should 1 to be chairman. give you some inside information now. it is not just that i have

achieved the status of senior military officer in the finest military the world has ever seen. that is not it. i would have felt the same way if i was scrapping on any rank at any time. it is one of those professions we ought to feel good about and it has to hold together on the basis of trust and what you're doing today is addressing that. last one, got to make a case for keeping faith with ourselves and our families and communities and the american people. you don't want to be here and neither do i. that is what it is about. that is almost redundant. keeping faith and trust are almost redundant. that is my message to you today. what you are doing here has absolutely direct correlation to who we are today but more important has -- even greater correlation for who we are going to be in the future.

other than that and the pressure i hope you feel now that i told you that i am ready to take your questions. >> microphones along the way that we would like to make sure we get some of our junior enlisted. your opportunity to talk to the chairman. go-ahead. >> i am a ten year army wife retired, two years of war and support foundation. i really appreciate your last statement in keeping faith with the family. one of the challenges we are facing that has developed great programs around resiliency is getting real time information from the ground particularly as we are dealing with reintegration. military or mental health advisory teams we have deployed in theater i wonder if it is feasible to use something like that while we are going through enumeration because what we are

seeing with the families as the guys come back particularly spouses and children if we have a mechanism to get that grassroots real time and up to a foreign policy which those mental health advisory teams have done so well that might be something that we can leverage to affect the programs and policies we have so little money for now. >> i think it is a great idea. many of you in this room particularly in the medical profession will know that we have been on the leading edge of arguing for greater transparency and affordability of medical information. in petered by well-meaning legislation that protects privacy above other competing goods but that is an idea that seems quite reasonable. i don't know enough to stand here and say approved. the chairman doesn't have that kind of power anyway. i have to do everything through

the services which is the right way to do it. i would expect out of this conference there would be i am sure you are doing this but a handful of initiatives you want to advocate and i will eventually have the opportunity to take a look at those and maybe have a taint. it would be helpful if i knew in what priority these initiatives would be most useful to you all. the ones that have the most enthusiasm and appear to be on a path to produce the best benefit i will check in. i promise you that. to reinforce that. i want to the engine earlier and i forgot. the mentioned family. the other thing about resiliency. this is dempsey's personal opinion. resiliency is the team sport. i know we have to build individual resilience but you also have to see it in the context of achieving. many of you know i am a cancer

survivor a year-and-a-half ago. i was going through for a cancer. what i learned for the first time in my life, i had been a very fortunate guy. i hadn't really failed at anything. in some way my body had failed me but i had a medical team in portsmouth, i had my family, my colleagues and i realize i can't do this alone. i can't treat my own cancer. it was a real eye opener for me. i want you to know that. it took cancer for me to figure that out. we can't let our young men and women figure that out the hard way. >> sean conroy, second marine division oscar. given the resilience and psychological first aid, what difference services have their own unique version given the increased joint nature of our work what your thoughts about

unifying under one conceptual model? >> we may get their some day. let me go 30,000 feet down to 5 foot 9. at 30,000 feet, medicine is one of those places that over time will be increasingly joined and at some point future joint -- the service chiefs are not there yet. i was guarded very jealously my authorities, privileged and train and educate and molt programs to meet the needs of the land components. that was a healthy thing. at this point in time i am interested in where we do things collaborative we that make us more interdependent but not to the point of advocating joint

medicine as a foundation. things like electronic medical records and some of the things that relate to what that young lady said a minute ago, information sharing. prescription drugs. doesn't make much sense that we do our own thing in that regard. down to this issue i don't know the answer. i know what the land component goes through. i had a targeted an f-16 or f 18 and understood the experience. i haven't lived beneath the surface of the ocean for six months at a time. there are a lot of things i haven't done. and so what i would ask you to do is help us as senior leaders of our military and civilian leaders understand what is the same and what is different and

find that to use the baseball analogy find the sweet spot. resources are a fact and to the extent we can have a common operating picture that would be better off in the meantime what these forms are intended to do is march us toward that, comparing best practices and exposing new challenges and things like that. i am not at the point where it needs to be one program. i don't think we are there yet. i hope this didn't ruin your entire conference with that answer. who is in charge? me. [laughter] >> out of h p 40 second. this question is more army directed but the ideal -- i deal with teaching my soldiers at the

agency level. and the basics -- what kind of steps are we taking to ensure a soft teachers are having the opportunity to teach soldiers. i am also a rear oic and have all these other hats as well and my time teaching soldiers is severely limited as well as mike italian m r t. >> you sound pretty stressed. get this kid some help over here. long before -- this was when the earth was still warm and i was a lieutenant. i actually felt -- no matter what we do if you ever feel you have enough to do everything you need to do give me a call because i have to change something at that point. it is the right question.

at some point one of the things we always do as a military because we can. we are the most organized institution on the face of the planet. it is what makes us great. you can't give us the problems that we can't shift around the deck chairs, southern organization and get out there. is impossible. we are that good. is also one of our faults that we throw institutional or organizational designs at problems as a first instinct. i come back to an artys --mrts in the second. and be nice to me some well will mean insubordinate took my guidance getting after the profession, they set up a school at west point and began to train a group of individuals to be

professional -- there was an acronym. guys like you and gals who come to west .4 three weeks of instruction on the profession and then they go into our formations and they would be the master gunners of the profession. that is not what i wanted. what i really wanted was for this to be a leadership issue. i wanted this to be a command issue. i wanted the profession to be embraced by noncommissioned officers so when they acted or spoke or coach or teach or mentored or trained that it was always there. it was the one thing that was always present. that is what we need to get eventually in what you are talking about. and i am not in any particular service anymore though i where the uniform of the army. this is the conversation i got to have with the service chiefs.

it was the first step. what is the next? given another duty, maybe i won't do that. and i ask you to think of it as an interim step to institutionalizing this:point i don't get that question and we're having a conversation with commanders and command sergeant major is and company commanders. and you are in charge of resilience. >> time for one last question. >> medical director of air force reserve and fellow cancer

survivor. i commend you. mine is a more global -- in terms of preparing our soldiers and airmen and marines and coast guide for their role. and the soldiers' statement, and how do you see that in terms of that, and compare the solar statement of the future? that is part of resiliency, to be the soldier. >> anytime my travel to places i have never been before. and some of them have been there, and made the foreign area

officers. to answer your question, and back to the joint force 2020, where we need to be in terms of our attributes. if you're in the army take out your dog tag on the on the back will have seven army values. go to your office evaluation report and noncommissioned officer efficiency reported valuation and you will see some actions. those attributes that the same as the ones we need in 2020. each of the services is doing it to an internal look to determine do we have the attributes right? i will link it to what you said in a very clever way. i see appreciate your allowing me the opportunity. i think one of the attributes that has become -- that i have

begun to value most at least in senior officers but i would say you have to begin to develop this attribute early on is adaptability. because it seems to me to be clear that no matter how well we think we are organized it is almost in a way that wasn't true 30 years ago. the way we use the force will not be the way that young man or woman thought there were going to be used. we most often fail to predict the future. we take the organizations we have and the equipment we have and apply them to situation and what makes it work isn't the organization or the equipment but the leader. that leader has to take an organization and equipment that are ill designed for t