wednesday only 4.5% of the roughly 22,000 ballot boxes had been examined. from kabul. i am pleased to have the program we had earlier last week abdullah. so it's a pleasure for me to have a chance to see and talk to someone who has been on this program before. so welcome to the program again. >> it's a pleasure to be with you. and with the public in the united states. >> thank you. where is the audit stand today?

>> the audit has begun in ernest. all the criteria and indicators have been agreed. we hope that now it would acquire full speed and every day hopefully will be a significant count. unfortunately, it would be suspended for three days because our major holiday is coming. otherwise, both the election commission, the international observers, and the candidate agents are all geared and are looking forward to carrying out the full audit. >> and when do you expect it to e completed? >> we do not know because i think it's going to take a week to really see how many ballots can realistically be counted in a day and then on that basis

the u.n., the unenate nations, which is super vising the process, will determine a date. this is to make sure that the public is not given conflicting dates and that then expectations are built around that. >> do you anticipate further disruptions? >> no, i don't. and k that all the rules procedures have been worked out. we are all very keen to make sure that the audit is carried out in terms that we have agreed. it's a major logistical undertaking, a significant number of the ballot boxes from ur provinces, we have 34 provinces, some fairly high mountainous areas, some difficult remote locations, are in the process of being moved to kabul and an assembly line is being set up in hangars at the election commission so that

all the votes can be examined and the results determined. >> is there clear evidence that there was significant fraud in this election? >> no. the 5% that has been counted so far does not show any major irregularities. there are allegations of fraud. because the allegations had cast a shadow over the legitimacy, i proposed that a full 100% audit be carried out, which is unprecedented in elections. and this will put to rest any allegations if there is any evidence it is going to be found out. otherwise it will be very clear that the people have participated in a day of celebration to make sure that the results of their participations have been registered, understood, and honored.

>> did you accept the audit on the basis of perhaps there was some fraud on either side? or on both sides? >> i accepted -- no. i accepted the audit to make sure that full transparency was provided when any canned date -- others e or their make allegations it is our duty to make sure that these allegations are fully investigated. i had repeatedly proposed to my colleague that we enter into a compact and understanding that we will not accept or condone any fraud in the election. now, that wasn't -- it did not happen during the election. now we have joined hands to ake sure that the public knows

how they voted, what has been the number of ballots, and that each ballot has been validly examined so there is no doubt. transparencey is central to atlantasy so that the next president of afghanistan will have the full benefit of legitimacy that comes from a transparent and fair voting process. >> do you believe that the allegations of abdullah that there was widespread fraud and that explains the difference between the first election and the runoff, or do you believe that he has other motives? >> let's put that behind us. whatever the allegations, there's a full process to test this. so we have agreed to a testing process that would determine, and this is a matter of weeks. it is not a matter of months.

and both the world community and the outlying public will fully know whether there were any irregularities versus allegations of fraud. and should there be any, we do not condone it. i have condemned any single act of fraud from one vote to as many as there may be, because i believe in public participation and in honoring the citizens of this country who really created an epic -- they braved insecurity they overcame the threats of violence many and women came out stood in long lines, twice, and that is the central fact of these elections. a grass rooth movement that created the conditions of the birth of the modern citizen in

afghanistan who is a fully empowered individual who votes on the basis of her or his preferences. so it is important to celebrate that accomplishment. and there is a process to make sure that any allegations are investigated. >> does this audit put to rest the idea of any effort to form a parallel government? >> absolutely. it's crystal clear that both of us will abide by the results of the audit. and the reason we were insisting it be a fully 100% audit is because a 50% audit which was initially proposed would still leave some room and doubt. and both of us have made this commitment. and beyond that commitment we have agreed to form a

government of national unity so who eople of afghanistan have temporarily voted for two candidates will be again united as one nation pursuing stability and prosperity, which is our key objective. >> does a government of national unity assume sharing of power? >> the government of national wide assumes a common ranging program of reform to put an end to corruption, to lawlessness, to generate economic growth so we come out of dependency to pursue peace, to provide the platform for public participation, to make the government accountable to

the people, because it is the people who we work for and it would bring us all to focus on what matters to our people. our people are poor. they are unwell. they need help. they need education. they need water. they need sanitation. but more than anything else, we want to overcome violence and dependence. our people are dying. every day we need to overcome this and we need to give our country a clear sense of direction based on a vision that is credible and a system of governing that is effective and transparent. >> i'm very interested in what you would do if you were chosen as president. and i want to talk about those issues. but let me just stay with the election and the government of national unity for a moment. here is what abdullah told me

in an earlier interview about a government of national unity. i want you to listen to that, please, and tell me if there's any difference in terms of how you two perceive it. >> help me understand what is the commitment to a unity government. have both you and mr. gani said that you will form a unity government? and whoever wins will have the top post and the other will be prime minister? >> that's right. we both agreed on the formation of the national unity government. in the presence of secretary kerry. that is the essence of political agreement between us. and there is a technical agreement which is on the issue of the audit. and then it is important that both agreements are implemented in good faith and we are dealing with it as such and we think that both are important while we -- our focus is mainly

on the auditting at the same time we think that the political agreement is also important for the future of the country. and it creates a sort of win-win situation rather than winner take it all. and as much as emphasis we do and we put the fairness of the audit process at the same time we realize that there are needs of the country which has to be addressed in the formation of the national unity government will help afghanistan. >> my assumption is if you were elected president and he is as part of a national government prime minister, you will have the power. am i correct? >> our constitution is modeled on the constitution of the united states. so it is a presidential system. and the president's authorities are defined in the constitution . what we have agreed to is to

create an office for two years that would be the equivalent of a chief operating officer or a chief executive officer. the duties of this office for the next two years will be defined by a presidential decree. because the constitution allows for delegation of some of that of the the president when circumstances require. and we have agreed that within 2 years the president would initiate the convening of a larger -- the is equivalent to a constitutional convention to amend the constitution to consider amending the constitution to create an office of an executive prime minister, not a parliamentary, not to shift to parliamentary system but one that is

executive. and there are many countries ranging from france to others, to russia, that can do this. the circumstances of fghanistan require consultation. so while the authority of the president is clear in the accountability of the president to the country is very clear, our national interests demand that we consult closely, and we will, because reforms are required in both national and international experience, shown, that carrying out intensive and extensive reform is best done when you consult stakeholders and arrive at a full understanding with those. and dr. abdullah is an able man whom should i be declared president i would be honored to

consult very regularly. and push forward a common vision and implement that vision for our country. >> if the votes of the first round are duplicated in the runoff and in the audit of the runoff, a remarkable comeback. how did you do it? leaf from a president obama and marshall gant. it's a grass rooth campaign. we reached every single group of stakeholders in the country o through a pains taking process of the identification of their issues. one of the things that did not happen because there were choices, dr. abdullah chose not to participate during the second round in nationally organized debates. what we did was to take the town hall meeting that new

england has made so famous but thanks to television broadcasted nationally. so, for instance, when we had a discussion with the youth, 6 million people across the country watched it. we had a meeting of our religious scholars, 3,000 of them were assembled both here, and suni and endorsed it. and ask that there was a mosque-to-mosque campaign that particularly in the insecure areas of the country resulted in creating peaceful conditions. and it's the same that urged our women to come out. you know, there is a family of, headed by a religious scholar that was -- whose woman for 20 years had not even gone to medical clinic and he rented a series of vehicles, many buses,

and first carried his own wife and then the entire village. this was truly a mass movement across the country with the urban areas of the country we engaged in a very intensive iscussion of seeing how to settle informal property rights. that puts a burden on people because a lack of -- a the corruption lack of corruption would be turned into property rights. wo women presided over a large discussion. and there were many meetings. we campaigned in different parts of the country, identified key issues and particularly in the last five days there was a door-to-door campaign across the provinces of afghanistan. the results are now all posted on the election commission's website and it shows that our

votes in every single province of the country increased. some by significant orders of magnitude. and some significant enough to make a difference. this our voting pattern is a national phenomenon. there is no province where we have not succeeded in reaching the public and creation of the centrist consensus. what during this campaign we've shown is that people who a year ago were not willing to talk to each other were brought on the same platform and campaigned intensively across the country. and this is really, has been a very, very proud moment for us to have generated such a turnout in such a scale of participation. the you win and are president of afghanistan, i'm interested in several relation ships.

first, with the united states. would you sign a security agreement? and what would you like for that security agreement to say? >> first of all, i would like to thank the american public, the american congress and the american government for their immense sacrifices in blood and treasure during the last 13 years. the relationship with the united states is a strategyic relationship that is based also on the value of democracy. our people demonstrated that we like democracy. and we like our vote to count. i negotiated, i was one of the three key people involved in negotiations of the bilateral security agreement. national oth in our interests and the united

states' national interests. i will be signing it within days of taking office. the agreement has been reviewed by a consulttive representative council across the board in afghanistan. they have recommended that it be signed. i find its signing in our interest. and i hope we can demonstrate that president obama's decision to scale down the number of american troops very significantly within 2-1/2 years can be matched by a major program of reform of our security institutions, of our legal system, our system of governance, and our economy, so we can demonstrate both to the american public and to the world at large that we can take charge of our destiny in afghanistan, is a working and

growing proposition. we would like to broaden the partnership from just being focused on security to being an economic and cultural relationship. we would like a university to university set of relationship, mosque to church relationship, people to people. >> do i assume you are saying that you are confident that afghan can as american troops withdraw, fill the void and therefore the schedule that has been proposed and committed to by president obama will be adhered to by all concerned? >> i had the honor to lead for 3 years the security transition . when i began, people thought it was suicide to accept a job where most standards thought it was impossible to reduce the number of american troops by

over 100,000. i worked with some of the greatest military minds of the ited states, general petraeus, general allen, general demford. in the process that i designed and then reached agreement was in phases. so instead of jumping straight to a pool and not knowing whether it is empty or full, we adopted a strategy of gradual testing in five phases. the u.s. troops withdrew with honor, with full honor and dignity, having accomplished assistance. a very significant commitment was made to building up of the afghan security forces. and thank god our forces have shown their patriotism and their commitment. now, we are assuming that the

process of building the afghan security forces would be supported for 10 years. the united states administration is repeated this assurance, but we need to understand and acknowledge that it would not just be the administration but the congress and the american public. and the media of course. that would review this. so given the decision that the president of the united states has made, we need to focus on these 2-1/2 years. we cannot waste a moment. and we must make every effort our american here partners will see the accomplishments and that we can make sure that the commitment of the 10 years are honored and support continues. >> do you think there are lessons to be learned from iraq? >> there are lessons to be

learned from iraq. one of the key lessons that fortunately from day one that i entered as a candidate we had insisted on exclusion does not work in politics. a winner take all approach is counter productive and conditions of post conflict or ongoing conflict. we need to have a sense of the citizen front and center, because it is the citizen that determines the stability of the government. and all parties must bring their differences within the government, the lincoln type approach bringing people within the tent so that the country at large can be secured from the disputes of the elite is very important lesson. in iraq they practiced exclusion. they did not bring everybody together around the common

table. they did not create the trust that is necessary for asshuring people that the government is not an instrument to be used against them but an instrument to work together for realization of common goals. >> what is your assessment of the taliban threat, and are you prepared to negotiate with them and how do you see the nature of those negotiations? >> a government of national unity means an end to all parallel governments. we must create the condition that there is only one government in afghanistan with the full legitimate mandate of the people that speaks for the country as such and looks at every afghan as being equal to another afghan. one of the slogans. the taliban both the word and

we acknowledge are political reality of afghanistan. they cannot be wished away or eliminated through use of force. all conflicts must end at the negotiating table. we are committed to ensuring at those issues that are grievances, that are about participation, that are about paving of political solutions are brought forward. the key to this is that afghan taliban who believe in being afghan operate themselves from larger regional networks of violence that are dedicated to nothing but destruction and would like to use our country as a battlefield for half-baked ideas, this means serious

engagement. this election is already created a major platform for peace because in the insecure provinces previously conceived widely insecured provinces of the country where participation was impossible our religious scholars and our people have created the conditions of engagement. >> to achieve that would you sit down with mulea owe mar and talk about the conditions for taliban forces to lay down their arms? >> peace requires sitting down with those who are engaged in conflict. one of the key advantages that i bring is that i have not been participant in conflicts. the country largely responded to my appeal of clean hands. one of my hands is free of blood and the other is free of corruption. we need to engage in

discussions and discussions must be based on preserving the gains of the last 13 years. the same way that we have insisted on formation of government of national unit and dr. abdullah and i both acknowledge our constitution is our key framework but there is a constitutional mechanism for changing the constitution not the fundamental valuings of the constitution but the specific arrangements that could improve governance and bring people together. >> you had the support of president karzai's brother. it is said that you had the support of president karzai. he is, as you know, among the american public a controversial figure and among members of the u.s. government who have dealt with him. there have been consistent allegations of corruption. he would not sign a security agreement. so what is it that you think is

hamid karzai's legacy? >> first of all, president karzai's elder brother endorsed dr. abdullah, campaigned for him, so is very, very actively engaged. the karzai family endorsed different candidates as individuals. the e not had support from president. we have maintain cordial relationships but dr. abdullah, thanks to the legacy of the very large political party that he presents is a major presence in government, ministrys, governorships, police posts, et cetera. i have no one in the government. i have not appointed. so i have not had backing from the government. the president's -- president karzai took power in a very ifficult time and his legacy

will be both a person who has managed to maintain an umbrella under which various afghans with very different outlooks and backgrounds and persuasions have managed to cohabit, and also of a legacy where corruption became a cancer that could not be contained. we are determined to build on e positive legacy and deal with corruption in a really determined manner because without tackling corruption our people in general and our poor people and our youth and women who have been the key drivers of this campaign will not have a place under this.

>> as a keen student of america, american -- the american economy, as well as american politics, you know that we have here a kind of standard of looking at presidents and measuring the first 100 days of their time in office. what do you hope to accomplish in your first 100 days after you are inaugurated president, if in fact you are? > within the first 100 days, the first is to set a course. and that means our partnership with our people will be firmed up to a set of reforms. so we will evaluate every ministry in a publicly parts pat tri manner, define its jectives, allow for honest

capable people to come to the that talk. this will allow us to promise to deliver on the promise of good governance. we have promised to transfer 40% of the national budget to the provinces because our system is centralized, so our provinces do not have fiscal resources on the basis of which to be accountable to the people. the reform of the security sector will start at the same 100 days. the office of the commander in chief that is the third defined function of the president of afghanistan has not been turned into an office. i will be turn this into an office so this each eight hours we will have a security report given that security is the number one desire of our people and very concrete ways on the basis of measures and

evaluation. then we have a very busy international calendar. our first action internationally would be renewing our partnership with the united states by signing the bilateral security agreement and by making sure that both the strategic partnership agreement and the bilateral security agreement are firmly in place. the first 100 days we will be engaging the region. china has become very interested in the peace process and this and also the new chinese president has opened up an initiative, a major initiative that the region, the surrounding neighboring countries should benefit from china's development. so seeking these relationships d ensuring that both the

region and the world at large sees us moving, and moving the stalled engine of government to full speed is going to be set up during these 100 days and we very much hope that the public would see the results of its massive participation in terms of accountability to them. >> i thank you for this time. we look forward to watching the audit. we look forward to the political and economic developments in afghanistan as you suggested earlier. >> i very much thank you for the opportunity and through this to thank the american public for their engagement. >> live from norkeds, you're watching bloomberg television.

>> jim is here the multibillion dollar investment fund specializes in betting against publicly traded companies. he gained prominence in 2001 with the wager on the demise of enron. since 2009 he has been focused on china while a housing bubble has yet to occur in shanghai and beijing he warned that

doing business is going to new york on the eevep eve of the financial crisis. i am pleased to have him back. welcome. >> are you still bearish? >> still four years later. we were here about four years ago. >> not much has changed except the credit public has gotten bigger. everything we talked about in 2010 is just basically doubled whether it's credit outstanding in the chinese economy, the amount of vacant real estate. >> but some people argue that the chinese appreciate the threat of a bubble and that they are doing more in order to address it than other nations have and because of the nature of their political system they can do it. >> well, those same people didn't see it four years ago now they believe that the authorities have it under control. the problem is that the data -- and we take it of course with a large grain of chinese salt. the data just shows that the credit spigot is just

completely wide open and that more and more credit is going to support less and less growth. and the chinese economy based on basically construction is really manufactured growth. the minute you stick a shovel in the ground and put up a building or bridge that counts as g.d.p. the problem with that model is when you finish building it you've got to put up another one. it's not based on ongoing consumption. and this reform that the chinese optimist felt was coming four years ago still is elusive. >> and many of those buildings are still vake president. and a lot will not be economic. >> therefore you see it's gone from a g.d.p. growth of double digits, 10, 11% down to 7 plus%. >> right. and we have to again color this with the concept that china is the only major industrialized nation that knows its annual g.d.p. on january 1 of that same year.

>> because. >> it is what they say it's going to be. >> they make it what they say it's going to be or whatever they say it's going to be is what they report? >> we have a cartoon in one of our presentations, seven of them sitting around a table and saying the growth is going to be 7-1/2%. how do we get there? >> which i know some corporations that do that, too. >> i think there's a lot that do that. >> so clearly though there's a lot going for that economy. >> mm-hmm. >> they've got an eemergencying middle class. they have social tensions. they are making a serious effort to deal with corruption, serious effort to deal with corruption. clearly a serious effort to try to deal with pollution. i mean, it is a priority for them. and the third priority they say is to sustainable economy. >> again, -- >> serious people with serious skills. >> they absolutely are very serious people.

and the technocrats in beijing are not to be underestimated. however, there is a saying in china. the mountains are high and the emperor is far away. and all of the action where the rubber hits the road in china happens at the local level. and that's where the technocrats in beijing, although they can direct things, there's a little bit too much faith that's put in the central committee and the planning committees because at the local level the incentives are still to produce numbers, produce growth at any cost. one other point. the ant corruption drive which is something we've been focusing on for the last year-and-a-half is actually much more than that. it now appears to us to be a far more serious effort to cleanse the party. and if you look at the people's daily overnight announcements, there's four or five head shots put up on twitter and the website of people who have been taken away every night. it's almost as if you're seeing a soviet style 1930's purge

through social media. people are falling out of buildings. and i'm not exaggerating. >> but i know -- i think we know about all the prominent people that have been. >> there's a lot of people below that level. >> people we don't know. >> it's having an impact on the economy because in large number of things like apartment sales, high end luxury products were bought with basically dirty money. >> is there some sense that he is becoming more authoritarian? >> i think so. i think he's very much -- >> consolidating his own personal power. >> in his own way in his own nationality he is a lot like putin in that although he is a communist and part of the communist party, he is a nationalist. and i think that two years ago, three years ago we would have said he would have been first among equals. now, it is fair to say he is first and he is going to be

much more firm, much more aggressive and much more muscular in the way he looks at the world. >> and eliminating opponents. >> well, i think that's happening as well. >> but i mean by that not doing away with them but in a sense consolidating his power and those who might be a challenge to him are not as powerful as they were. >> exactly. >> when you look at it both in terms of thing that is they might want to do, what is it that is essential for them to do if in fact they are able to deal with this possible bubble? >> well, again, navigating the credit issue will be the issue and reforming the economy so it's less reliant on investment and more reliant on consumption, a more traditional developed economy. >> which is exactly what they're tying to do. >> but since you and i sat down four years ago, it has increased not decreased. so for all the talk and optimism about reform, the

results still show that in fact it is not happening. and that's the troubling part. >> let me uns. there's a couple things here. number one is the dramatic shift they're trying to achieve is going from an export economy to a domestic economy. and they hope they will have a rising middle class that will enable that to occur, demand and manufacture all these things and that will provide jobs and it goes on and on and on. you're saying that you don't think they're able to do that within any reasonable amount of time they might expect to have a deliverance of results. >> it's much less of an export economy than most people think. net exports, exports minus imports last year was only a couple percent of g.d.p. so this is down from double digits four years ago, five years ago. sos this is still basically a bifurcated economy, consumption and investment. and they have got to flip it. they have got to flip the basically so that ongoing consumption services so on and

so forth are a recurring form of growth as opposed to more projects. because ultimately you end up with enough projects. and that's still the issue that they cannot seem to navigate. every time the economy slows -- and i like to joke that china is the only economy where when growth slows from 7.5 to 7.4 all the stops have to come out. what does that tell us? it tells us that again they're worried about stall speed, they're worried about hitting the brakes. and growth not going from a reality point of view 7.5% to something much, much lower even though we will never see that of course. and i think that's the real challenge of looking at china from the outside is trying to figure out what's really happening beneath the gloss of the official statistics. >> you also want to know what their long term ambitions are. the consolidation power often has a reason you want to consolidate power and you have a vision of what you want to do. do we have any sense of what he

wants to do with china or wants china to become? >> clearly this administration or this leadership in china is pursuing a more shall we say muscular strategy externally. that's new. the dispute with japan, the claims in the south china sea, the american pivot to asia all s sort of again bringing forth a more -- i won't say bell co-but i would say more firm chinese response than we've seen in previous decades even. so i think that's something that's new. and whether it is just say resurge nt nationalism, whether it is as any country grows it exerts its power politically and militarily i think remains to be seen. but that's a new development.

i think china's ongoing outreach to other countries, whether the other so-called brick countries or other countries in asia, they're building very quietly a port facility for example through pakistan with a high speed rail to get a port on the indian ocean. all these things are sort of new developments and are going to have major major implications for our strategists and our political leadership. >> turning the subject to japan. you have said i think that the biggest threat to asia is not china but japan. that's simply because you think japan is changing its own attitude about its place in the world? >> i think the change in japan is suddenly i think becoming a new destabilizing -- >> in asia. >> in asia. the fact that japan is getting ready to basically renounce its constitution. >> but there seems to be some pullback from that. >> well, there's certainly pullback within the country. but the leadership is very, very intent on basically

bringing forth a new look japan. that new look japan is scaring china. and i think that it is basically brought two countries that peacefully coexisted for years in the region back to butting heads and we've seen that in the last two years. >> what's the rule of the u.s.? i mean, clearly we are an asian power, clearly we have reliances with japan, we have relationships with vietnam and south korea where we have an alliance as well. i mean, what's our role? >> well, it's a good question because the 64 billion dollar question is what happens if japan and china clash? and -- >> i don't meal -- >> i don't mean a full-fledge war. i mean someone miscalculates on the open seas, a boat is sunk, a plane is shot down and now you have a crisis. what happens? do we pledge the full faith and

support of the u.s. military behind japan to fulfill our treaty if there is an incident? i don't know. a lot of strategists feel we won't. will we send american boys in harm's way over that? again, i don't know. this is a new calculus that we haven't had to worry about in the last handful of years as we've been focused on the middle east and elsewhere but in fact our alliances in the pacific are very much open and active and with what's going on with china and others i think the obama administration is right to consider the need to refocus on asia. >> but has that pivot taken place? >> not practically. we've opened some bases and marine units. of course strengthened ties with countries like vietnam and reopened and strengthened ties with the philippines. but this is all the early moves in a chess game. >> you teach financial fraud at

yale. >> i teach the history of financial fraud, now how to commit it. i do. ? how did that come about >> i was joking with rick 11 the former president one of my fantasies was sometime down the road to go back and get my docket rat in history. he joked that, well, interesting you should say that because we have something we want to talk to you about. and they asked if i would be interested in teaching at yale school of management. and so i jumped at that chance. it's one of the best things i've ever done. >> why is that? >> the ability to actually teach graduate students a framework about thinking about corporate wrong doing which goes back as long as there's been corporations. we start the course it's really a history class back in the late 17th century back in england. and when you teach the frameworks as well as the cases and the wonderful rogse that you come across, you begin to realize that bernie maidoff was

just one in a long time line. and this has been going on for 500 years. >> a frequent cry you would hear after 2008 was nobody is going to jail. we had people going to jail for insider trading. but the recent case came back with acquitle. should there have been more people indicted? >> personally, i think so. but we know now with what lanny broyer justice and attorney general holder has said, that in fact the justice department took in economic factors and financial factors in deciding whether or not to prosecute individuals. and they're on the record as saying that. so that's a very in my view a very questionable form of justice in this country that if you in fact work for a too big to fail institution, that in fact you can get away with all kinds of krnlt that the average

-- criminal lt that the average person couldn't. it still to this day rankles most people in the united states to in an amount i think that the sort of corridor from boston to washington doesn't appreciate. >> in other words, people who live in the corridor don't appreciate the fact that a lot of people across the country are still angry, believe that there was an unfairness about what was necessary to do in order to -- >> yeah. and there's a still two-track system of justice in this country. if you look at the response in the 30's and even in the response in the post the savings and loan crisis in the 80s as well as what president bush -- what president bush did post enron to clean up the markets. there was a firm response and there was aggressive use of the justice department to faret out wrong doing. that is not what we've seen. we've seen insider trading cases which are important but -- >> but not policy. >> exactly not central to the

company. individuals taking advantage of information. not strallfraurdu fraud on the part of the company. >> and to take it to its logical and horrible extreme, i mean, i pointed out that you almost get to a point where if you're the management team of a board of a significantly large financial institution and you know that by and large the only penalty you might face is just simply financial fines, you might have a fiduciary duty to skirt the line or close line to cross the line if you think the cost benefits are worth it. and that's a scary thought. >> i was in a conference last week where several people made the case for bit coins. do you believe that's going to have a prominent place? >> i don't buy gold. if i was to worry about another currency outside the realm of governance, which is what bit coin is, i think being as old as i am i think i would prefer gold or diamonds or something

like that to a digital currency. because deep down i'm worried about the idea that the geniuses that have developed the algoer rhythms that are unbreakable might have a back door there that you don't know about. >> thank you. good to see you. >> great to see you. >> on the next, the artist jeff coons. >> it's been nice for me to look at some of the images because i don't live with all those pieces so a lot of them are kind of just fresh to me again. >> owned by collectors. >> owned by collectors and you know i tend to live with other art, art by other artists. i'm in my studio all day long. i'm around my work so i don't live directly with my work but it shows to me that it's been fun. i think i've been doing exactly what i've been wanting to do. and it makes me feel more ambitious. i mean, i really would like to do something. i really want to put something

on the table. and i think i have been having a dialogue but i want to do more.

[captioning made possible by bloomberg television] >> this week on political capital, house foreign affairs committee chairman ed royce in ukraine. what's next for obamacare, congress' to do list. d debate paul ryan's poverty proposals. >> we begin the program with ed royce of california. thank you for being with us.