filing, cit declared bankruptcy. they would be subject to what's called a make whole amount that would be equal to all the future fees goldman thought they were going to get discounted present value, a total of $1 billion, according to later press reports. those familiar with the deal say it was structured such that goldman sachs was much better off if cit went bankrupt. goldman has always defended that deal, saying they gave the company workable financing when no one else would. the broader issue, of course, that goldman sachs faces, is that every time they have to defend themselves against a new allegation, whether it's this charge by the s.e.c., whether it's the situation with cit, aig, they are having to face down the notion that perhaps they have a corporate culture that puts clients second. guys, know they're keenly aware to this, because their letter to shareholders this year referred to clients 56 times and lloyd

>> cit group that failed. it restructured its dead with $8 billion. i think taking an institution like goldman sachs, if it were forced to break up into eight or ten pieces depending how many risks you think those pieces have, that will put us in the right ballpark. >> simon, how would i get financing done, whether high yield or a lot of the financing that gets done around the world that does make sense. right? that does help companies grow. it sounds like it would be very hard for any institution to be able to do that in that world. >> these institutions work together anyway. when did you see a big bond issue handled by just one bank? they're all consortiums, they all work together. our banking system used to work just fine 10 or 15 years ago when these mega banks were much smaller. goldman sachs is about $270 billion in today's money. when it almost failed in 2008,

for example, cit, remember, they just emempged from bankruptcy. took at least year to exhaust all the other options before they finally pilled the plug and went into bankruptcy loonchts would trigger that, trigger that jopgs a legal process waiting to be had. isn't it? >> build it into the security. if ratios fall below standards, security converts, e recapitalize the company instantly and speed through the crisis like a shock absorber. >> ken, got to thieve there. nice to talk to you. i'll attempt the book. thank you very much. >>> just ahead on "street signs," the government going the extra mile to save you money at the gas pump, but there's a catch. you'll end up paying for it in the end. find out what i'm talking about after the break on "street signs" on cnbc. to the all-american meal. french fries, and our national passion for them, are legendary. classic. iconic. but times change and people want better foods. so cargill helped a restaurant chain create... a zero trans fat cooking oil for their french fries...

cit has a brand new management team in john thain. it's trading below book value.nd it's a warrant on the middle market lending recovery that we should see as the economy recovers. so this is a stock that could classically trade between 1.2 to 1.5 book value, and it's trading right now on about 90% of book. so this is a name that's owned in the hedge fund community. a lot of value/distress buyers own this name. and i think it's an interesting one, and we've made it the hedge fund trade of the week. >> all right, anthony. thanks so much. anthony of course is the author of the soon to be best-seller "good-bye gordon gekk oechlt." good-bye, anthony. >> that should be a best-seller already. i bet it is. let's get there. >> no, it's a fantastic book, i'm told. right, gary? you read it. >> it is. i think i'm mentioned in the book. >> that's why it's so great. >> i can't comment. >> all right. let's move on to headline number two here. amazon to amaze. at least that is the verdict of the top fundamental chart and options gurus on the street. take a look at tonight's "fast

embroiled in two wars, some cit cannics believe mr. obama's national security initiatives are too dovish and will embolden the american adversariadversaries. before becoming vice president, dan quayle was a leading expert on the nuclear weapon and today questioned the president's conduct on the world stage. >> he does seem from time to time to apologize for america's strength. and america's domination of the world today. i believe he comes from a much different political agenda than i or the mainstream american people on national security. >> reporter: still others question the wisdom of the shift in the nuclear posture. >> what did we get by the assurance to the world we won't use the nuclear weapons on a non-nuclear state? when we said, when we didn't have that promise we had proliferation. india, pakistan, south korea -- actually north korea. all of them got nuclear weapons. >> reporter: eastern european allies fearful of russia's power hopes president obama will make more aggressive use of nato to check moscow's regional ambition a

cit group screamed that if they were allowed to fail, they weren't rescued, they would be incredible disruption to credit to small and medium-sized business, their specialty. there was a lot of discussion in the administration about whether not to rescue them. and to their credit the administration helped i think by sheila bair and the fdic decide to step back and let them fail. you cannot find that failure in the day. they were bluffing. goldman sachs at 800 billion is not bluffing. if you let them tell you have a very safe problem on your hand. that's certainly how the administration sees it, and i agree with them. people say, well, simon, we have the revolutionary a 40. in dog bill. revolution other is requested by secretary geithner, support the white house. this will allow us to take over and managed the failure and contraction, liquidation, of megabanks when they get in trouble in the future. well, with all due respect, to people who work long and hard on capitol hill, and i do have a great deal of respect for many of them, the resolution will authority is a unicorn. unicorn is

cit group screens that if they're about to fail, if he were rescued, there'd be incredible disruption to the provision of credit to small businesses, which is their specialty. there is a lot of question about whether or not to rescue them and to their credit the administration helped i think by shoe leather of the ftc decided to step back and let them fail. you cannot find those consequences of that failure today. they were bluffing. goldman sachs 800 billion is not bluffing. if you let them fail, you would have a very serious problem on your hands. i certainly have the administration sees it and i grew with them actually. now people say, well, simon, we have the resolution authority in the.filter the resolution authority is supported by the white house for this will allow us to take over and managed the failure and the contraction of the liquidation of megabanks when they get into trouble in the future. well, with all due respect, to people who work long and hard on capitol hill and i do have a great show of respect for many of them, the resolution authority is a unicorn. not unicorn

when the province of ontario granted a permit to the company to take water out of lake superior and cit- and ship it to asia, i was the chair of the international joint commission, the first and immediate call came from the congressman asking in a rather forceful manner, what was i going to do to prevent that? he took on the responsibility of leading the effort to prevent the sale of the diversion of water to the great lakes. he authored legislation and achieved a ban on oil drilling in and under the great lakes. he successfully forced the epa to change their proposed rules, to permit to partially treated human waste to be discharged in the lakes rivers and streams many call him the guardian of the great lakes. i know that he is continually asked for his views on the protection of the lakes and dino he is very, very proud of his work in this area. other accomplishments, i would like to call the sheriff. >> thank you, tom. good afternoon. i am market county sheriff michael. i am here today representing my sheriff's office and other thankful and grateful law enforcement agencies, not only

their second largest source of l irk cit foreign currency are remittances by the 10-15 million mexicansing illegally in the u.s. drugs are far greater than that. the final thing is their oil fields are declining. the president of mexico, the current one, says they'll be exhausted in nine years. that's 40% of the federal budget right there. so you have a recipe for a society that's eroding, and you can see it. each day the president of mexico, his army, his federal police control less and less of the country. each day our, the united states government says, we'll support you. but we're fighting a conflict, or we're engaged in a conflict we're not going to win. >> host: who's being murdered? >> guest: poor people. the u.s. government and mexican government says 90% of the dead are dirty, meaning they're drug-related. that's a lie. 90% of the dead are nobodies living in poor houses with nothing. now, you can make the claim -- >> host: then why are they being murdered? >> guest: well, because it's a war for drugs. fifteen years ago there were very few addicts, for example, in juarez. now cl