world and make the establishment of a new government hideously complicated. it is good that people are finally able to believe that saddam's regime has been crushed. the military victory was difficult enough. but now comes the hard part the subprime mortgage crisis has left millions of americans struggling to stay in their homes. wall street is feeling their pain. >> this is the biggest point drop ever season. >> if lehman can go down, what does that mean? >> we're in the midst of a financial crisis, and the federal government is responding with decisive action. >> these guys have been gambling with house money for years, and it's our job to bail them out? >> live by the free market, die by the free market. >> the largest swindle.

an alleged $50 billion ponzi scheme by bernard madoff. >> every corporate official who has chosen to commit a crime should expect to face the consequences. >> the pardon is over. ♪

why? it is the chosen word of the nonconformist. if you are not afraid to ask why, you can change whatever it is you want. >> why, why. >> if there was any company that could make energy cool, it was enron. >> the texas energy broker trade electricity like any other commodity, a sophisticated trading operation buys and sells billions of dollars worth of energy every day. it's the largest company of its kind in the world. >> enron is a company that deals with everyone with absolute integrity. we play by all of the rules. we stand by our rules. we mean what we say, we say what we men. >> ken lay was the original ceo. he ran enron when the company

was created at the merger of two pipeline companies. he seemed like the ultimate american success story. >> ken lay hired jeff skilling to innovate into commodity trading. >> every year, every day, every week you have to colt up with new ideas. >> he was very charismatic. when you heard a ra ra speech of his, you just feltner jazzed. i liken him to a cult leader because he really could get you to drink the kool aid. >> we are doing the right thing. we're working to create open, competitive, fair markets and in open, competitive fair markets, prices are lower and customers get better service. >> you are the good guys? >> we are the good guys. we are on the side of angels. >> the pendulum in business tends to swing too far in either direction. and this was an era of deregulation. >> the deregulation of the energy industry in california is causing one problem after another. >> enron was very good at weakening existing rules and regulations and then taking advantage of the space between the rules.

>> in the midst of this heatwave, an energy emergency has been declared in california today. >> californians could be spending part of another day in the dark. >> the energy crisis in california was not just a force of nature, it was a result of market manipulation by energy generators and producers liken ron. >> i want you guys to get a little creative. >> okay. >> and come up with a reason to go down. >> okay. so we're just cop do you think for some maintenance, like some forced outage type thing. >> right. >> and that's cool? >> hopefully. >> they were gaming our system, withholding power at the borders, taking power plants offline, and it was devastating to california's economy. >> they had to do it and there was a red light there. >> it was beautiful. >> they had strategies of raping and pillaging california

called death star, get shorty, ricochet. >> as the lights went out on the west coast, enron's wholesale services revenues quadrupled to from $12 billion to $48 billion, and doubled again three months later. >> every time there's a shortage or a little bit of a price spike, it's always collusion or conspiracy or something. it makes people feel better that way. >> but you know as well as i do, it's nice for a business. you're in the business of making money for your shareholders. so you would be foolish, as you said, to turn down the kind of money you can make this past winter in california. isn't there -- >> i think you put words in my mouth there. >> okay. >> what happened in california was a flashing red signal about the nature of what enron was all about. >> but what wrought them down was just the sheer brazenness and the scope of their manipulation. >> the sec is now investigating enron's accounting procedures after the company admitted it inflated earnings by half a billion dollars.

>> enron oligarchies. >> enron had businesses that were losing immense amounts of money. so the company's cfo, andy fastow found extremely creative accounting methods in order to hide the losses, hide the debt, show profits that didn't actually exist yet in order to please wall street and keep its stock price high. >> this week it was revealed in the very same period when an in-house whistle-blower named sharon watkins was privately warning chairman ken lay that i am incredibly nervous that we will implode in a wave of accounting scandals, lay was assuring employees that i have never felt about the prospects for the company, and in fact urging them to buy more company stock. >> leadership knew we cooked the books, yet ken lay through the fall of 2001 was still telling others to buy, though he was dumping. >> many others who work for

enron saw their retirement nest eggs wiped out this month. worse, they are powerless to stop the hemorrhaging because enron has blocked them from making any changes in the retirement plans. >> when i saw the stock drop, i called to sell and was told that i was locked out. so i had to stand by and watch my savings disappear. >> many of the nation's top banks and mutual funds were heavily invested in enron. the company is widely expected to become the biggest bankruptcy case in history. >> enron was the moment we realized that so much of the business world was not what we thought. >> something is very wrong in the case of enron. a lot of knowledgeable people on wall street were either duped or purposefully went along for the ride at the expense of thousands of others. >> this is not a story of a few bad people. this is a story of a lot of bad people. there were aided and abetted by

accountants, by lawyers. there was no cop on the beat. you got to put limits on the greed that drives a whole lot of people. >> enron's kenneth lay and jeffrey skilling were once among the most celebrated business leaders in america. tonight they are convicted felons. >> enron was just the first domino. it was followed by world com, by healthsouth, by tyco, one accounting fraud after another, on and on and on. this belief that giant corporations are going to be restrained from running amok was revealed in this decade to be basically a fairy story we tell ourselves at night so we can sleep better. >> no executive is too prominent or too powerful and those schemed to defraud is too complex or too fancy to avoid the long arm of the law.

wow. did that just happen? so this is their big idea? people? i think human interaction is overrated, but this makes quite a bit of sense. they literally just put real cpa people in their software. why didn't i come up with that? why are we still clapping, by the way? i don't know. but if i stop, people are going to think i'm jealous. you get a cpa! you get a cpa! you get a cpa! i like this guy's style! [applause continues]

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the order data, the weights of , everything is seamlessly put into shipstation, so when we print the shipping ll everything's pretty much done. it's so much easier so now, we're ready, bring on t. shipstation. the number one ch of online sellers. go to shipstation.com/tv and get two months free. and if you get lost, just hit me on the old horn. man: tom's my best friend, but ever since he bought a new house... tom: it's a $10 cover? oh, okay. didn't see that on the website. he's been acting more and more like his dad.

come on, guys! jump in! the water's fine! tom pritchard. how we doin'? hi, there. tom pritchard. can we get a round of jalapeño poppers for me and the boys, please? i've been saving a lot of money with progressive lately, so... progressive can't protect you from becoming your parents. but we can protect your home and auto when you bundle with us. thank you, all. please be seated. i am here today because we're taking action to bring many thousands of americans closer to owning a home. >> homeownership had been expanding during the early and mid-2000s. part of this comes from president bush's administration really making this a priority. >> one of the biggest hurdles of homeownership is getting money

for a down payment. so today i'm honored to be here to sign a law to help many low income buyers to overcome that hurdle and achieve an important part of the american dream. >> this was everything americans were supposed to want. the security and stability of owning their home. and so you were supposed to borrow money. maybe you were even supposed to stretch a little bit, because after all, since the great depression, on average, home prices had only gone up. >> if there's one area of the economy that has stood its ground, it's the housing market. still a hot market fuelled by low interest rates and hopes that real estate will offer not only a safe haven but continue to gain value. >> john and camille carter are joining the growing number of first-time home buyers, convinced the time is right thanks to dropping interest rates. >> we prequalified a week ago and it's gone down since then. it's kind of amazing. >> everyone was talking about it. they all saw buying a house as sort of the main way to get wealthy.

house prices kept going up, so this seemed like a no-risk, no-brainer thing to do. >> mortgage applications hit an all-time high last week. >> current homeowners taking advantage of lower interest rates too, refinancing their homes as americans seek to lower payments and put more cash in their wallets. >> this business has gotten so competitive and so aggressive because everyone wants a piece of the american dream, the housing market. >> there was this rampant fear of missing out. people started flipping houses. people were quitting their jobs to buy houses and to sell them at a higher price. >> i don't see a bubble. i see prices continuing to climb at a steady rate. >> there was a euphoria where the american dream of owning a home converged with the american dream of risk-free investments, or you might say the myth of risk-free investments. >> new numbers out tonight suggest more than ever that the housing sector of the american economy is something of a house of cards. >> the housing bubble started to

come undone in 2006, 2007 and suddenly, people started to default, and then they started to default in big numbers. it really became a domino effect and that devastated whole communities. >> from bad to worse, home prices experienced their biggest drop in more than 20 years. >> two out of ten who bought their homes in the last ten years are already upside down. >> there were good intentions in this country about increased homeownership, but in the last years of this bubble, that's ground cover for some pernicious activities. >> americans have seen their property values plummet and the country edge closer towards a recession. and at the heart of the problem is something called the subprime mortgage crisis. >> loans made to borrowers with low credit scores or no money for a down payment are commonly called sub prime mortgages. and the market for them has

exploded in this country of late. >> there's some decent aspects to subprime lending. it's an effort to reach people maybe whose credit isn't as good and the effort to give them the ability to reach up and to reach the home ownership dream. >> but like so much else, it starts as a good idea that eventually gets perverted. honestly, the history of the modern age of finance is that. >> washington has pretty much failed miserably for the last 10, 15 years. as the mortgage market has changed, washington has concerned about making it easier for lenders to make loans without requiring them to do some due diligence. >> it became possible to walk into a mortgage broker and buy a house with no provable income new york city assets and maybe not even using your real name. >> people are saying to themselves, huh, you're going to give me a mortgage when i don't have any money in the bank, when i don't have a job, when i can lie on my form and sign it and you'll give me the money any way

essentially giving me a free option to a buy a home? i'll do that all day long. people love free options. >> not one company considered an innovator in these risky loans and one that aggressively pursued that pocket was countrywide financial. the company made a fortune, and so did its ceo. >> this may well become the deeply tanned face of the mortgage mess. the face belongs to angelo mozilo, once the celebrated ceo of countrywide. now facing allegations of predatory lending and greed. >> if youen don't bare personal speedometer, i don't know who does. >> i do take full responsibility for anything that happens at countrywide. >> mortgage lenders concocted a a whole series of loan products peddling them aggressively to people who did not have the ability to pay those loans back. >> when they say sign here, sign here, and sign here and they tell you they have told you everything that's important

about the loan, you think they have, and you just sign. >> i just feel so stupid. >> the whole system was designed to go after people with marginal means and put them in the highest cost loan possible. because those are the loans that paid the most fees. >> the banks didn't have to care anymore about whether the loan got paid back because the loan had been sold to wall street. >> instead of keeping the dicey loans in their own portfolios, the big banks and giant mortgage companies that originally underwrote them sold them off to big new york investment houses. >> firms like bear stearns and merrill lynch sliced them into little is piece pieces, packaged them up and sold them as high yield mortgage-backed securities, turning sow's ears into silk purses. >> they would take a thousand, put them into a package and cut them into a thousand pieces and then sell the pieces as a much

safer investment. >> the idea was that all this was diversified in 100 different ways. everybody had little, little pieces of it, and therefore if one of the little pieces went down, the other piece wouldn't go down. but that was the fallacy of the whole scheme. >> from main street to wall street, today's foreclosure numbers are foreboding. >> they're rising so fast that they could soon involve one in 100 american homes. >> the fact that millions of americans were getting mortgages that they should never have had, that's kind of an isolated virus, but wall street, ooh, wall street sent the virus all around the world. included! ♪ ♪ at t-mobile get the unlimited plan and the latest phones included for $40 dollars. feels so good to be included.

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good evening. there is no shortage of evidence showing a u.s. economy either already in recession or heading there. every day there is a new shock to the system. >> the housing slump has turned many lives and bank accounts upside down. >> the dow futures down sharply for today's open as more banks report losses in the billions. >> mr. president, economists say that the nation is at increasing risk of recession. what do you say? >> i say that the fundamentals of our nation's economy are strong. >> the firms began to announce losses from prime mortgage-backed securities, but the whole idea was this is under

control. ben bernanke who is the chairman of the federal reserve and hank paulson who is secretary of the treasury said this is contained. >> the u.s. economy is diverse and resilient and our long-term fundamentals are healthy. i believe that our economy will continue to grow, although at a lesser pace than we have seen in recent years. >> hank paulson had been the chief executive of goldman sachs, so he was an insider, for better or worse. he knew where the bodies were buried and he knew how these markets work. >> testifying before a house committee, federal reserve chairman ben bernanke threw his weight behind a stimulus package. >> getting money to people quickly is good, and getting money to low and moderate income people is good in terms of getting bang for buck. >> ben bernanke was an expert in the great depression. his one focus was to avoid another great recession in this country, and here we enter a great recession. >> the mess deepened today. bear sterarns reported its firs quarter loss in its 80-year

history. >> bear stearns was an investment bank, and investment banks are not the same as banks. they do not have small depositors. you and i cannot go in and open up an account. investment banks are very sophisticated investors who do and should know the risk of the institution when they do business with them. >> bear stearns was one of wall street's major firms, but with a slightly riskier, edgier reputation. >> where goldman sachs is the queen and morgan stanley went to harvard, bear stearns was the guy flipping you the bird in the corner, and it has probably a greater percentage of this toxic sludge mortgage-backed securities in its vaults than anybody else. >> it's been a hard week for shares of bears sterns as the firm has been buffeted by rumors of a liquidity problem. maintaining its balance sheet is strong. >> questioning a wall street firm's liquidity is very much akin to yelling fire in a crowded movie house. once that cat is out of the bag, it risks triggering a stampede.

>> should i be worried about bear stearns in terms of liquidity and get my money out of there? no, no, no. bear stearns is fine. do not take your money out. >> our liquidity position has not changed at all. our balance sheet has not weaken and at all. >> if you have to prove that you have credit, you don't have any. if you have to prove that these assets are worth what you say they are, they're not. >> that dawning fear that all these mortgages might not be strong and reliable suddenly had everybody secondguessing. >> for weeks, there had been whispers of trouble at bear stear stearns. by today's opening bell, it was a full-blown alarm. >> this morning schwartz said that the firm's cash position had deteriorated sharply over the past day. >> the rumor became the reality. all the rumors got way too ahead of even the people's ability to manage it, and that's really the story. >> who could possibly imagine that bear stearns after 85 years

of profitability, never having a losing quarter, would have a losing quarter in the fourth quarter of 2007 and be out of business two and a half months later, in a week. >> the fact that a wall street firm could lose 90% of its value in one weekend has some convinced the markets and the economy have farther to fall. >> while most of the country was looking at this as one investment firm that maybe you've heard of, maybe you haven't, is teetering, it's a very different story in washington. >> an investment bank collapsed, one as big as bear stearns is what wall street experts would have called an economic nightmare scenario. here's the good news. it's been averted. bear stearns has been bailed out by the government, and now they've been bought out by a competitor. >> the federal government had never stepped in before in the history of our republic to save an investment bank, but the fed decided to change that in bear stearns' case, because they decided that it wasn't because bear stearns was too big to fail, as we like to say, it was

too interconnected to fail. >> given the current exceptional pressures and the global economy financial system, the damage caused by default by bear stearns could have been severe and extremely difficult to contain. >> the fed knows this isn't just one firm. when one tall building on wall street falls, it's probably going to land on another one, which could land on another one. and it was that institutional risk, the idea that you might have an uncontrollable fire on wall street that primarily concerned bernanke and the policy makers in washington. >> i think the big question on a lot of people's minds, are there other banks in a situation similar to bear stearns right now. is this just the beginning? >> well, our -- our financial institutions, our banks and investment banks are very strong, and i'm convinced that they're going to come out of this situation very strong. our markets are resilient. they're flexible. i'm quite confident we're going to work our way through this situation.

>> after bear stearns collapsed, a lot of people thought whew, we dodged a bullet. there was debate about it. there was criticism of the government stepping in, but there was a sense it was a ripple, not a bombshell. >> no question about it. wall street got drunk. that's one of the reasons i asked you to turn off your tv cameras. it got drunk and now it's got a hangover. the question is how long will it sober up? is this even technology? are actually doing this. did they just put cpas in their software? genius. i'll never have to leave the house to do my taxes again. oh that's not good, man. you need your vitamin d. why does everyone keep saying that? double-checked all your expenses, and i found another deduction for you. oh my gosh, a cat. wow i've never seen you smile before. did i do it right? yeah. thank you. can i see?

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wall street is bracing for another possible victim of the housing and credit crisis. lehman brothers, one of the largest and oldest brokerage firms in the country has been experiencing what many fear is a slow death because of its rival bear stearns back in april. >> there had been rumblings that bear went down, lehman would be in severe trouble, and dick fuld, their ceo, had been warned that you may be next. >> hank paulson, who knew him from his goldman days had sat down with him and said you might want to think of finding a partner, someone to take you over, get someone with a bigger balance sheet. and fuld famously dismissed those as absurd and completely unnecessary. >> wall street is on edge tonight after a weekend of talks aimed at rescuing the struggling lehman brothers investment bank. >> all weekend top executives of rival banks, along with federal

reserve and treasury department reserve officials met under tight security to discuss plans to buy lehman whole or in part. >> lehman is on the ropes. every ceo of virtually all the big banks gets a phone call. get down to the federal reserve. hank paulson had been lambasted for effectively bailing out bear stearns. so he sat all of these ceos in the room and said it's your problem. fix it. >> pretty clear the government is not going to bail anyone else out. at least that's the message they're sending. >> loud and clear. when i was talking to the folks at the treasury on friday, they're saying look, we're trying to find a buyer here, but let's beclear, we are not going to use taxpayer money. >> people believed if lehman went under, then the panic might spread. but people were equally worried that if they bailed lehman out, that it would be obviating this idea of moral hazard. if you believe the u.s. government is always going to bail you out, well, why wouldn't you make bad decisions? >> the government is trying to restore confidence in the markets, and you don't restore

confidence by rescuing one institution after another after another after another. >> that friday when secretary paulson and i brought the market together of the new york fed, i don't think any of them, really any of us realized how bad it was going get still. i think we were i would say terrified at that point, but probably not terrified enough. >> lehman brothers for 158 years a cornerstone on wall street. failure to find a buyer over the weekend means it is now bankrupt. >> meanwhile, merrill lynch, fearing it could be next agreed in an act of desperation to a shotgun marriage with bank of america. >> now we're left with morgan stanley and goldman sachs. out of five three months ago, there are two left. >> how long have you worked for lehman, sir? >> when they declared bankruptcy, i cannot explain to you the shock and awe in the investment community. >> if lehman can go down, what does that mean about the health of the american financial system right now? >> they're talking about investment banks, the smartest money on wall street. how have they been getting it long for so long?

>> they say on wall street that nothing happens until the lines of fear and greed cross. and there is no better example of the lines of fear and greed crossing than the lehman bankruptcy on september 15th, 2008. the markets were fearful. [ closing bell ] >> your future, my future, our future. a meltdown on wall street, the first since 9/11. >> this was a once in a half century, probably a once in a century type of event. >> it is the worst you've ever seen in your career? >> oh, by far. >> because he's let lehman go under, there is suddenly shock in the financial world that morgan stanley is going to go under and goldman sachs is going to go under. and now you've got panic. >> the american people can remain confident in the soundness and the resilience of our financial system. >> nobody understood what was happening. they couldn't believe that these grand institutions were about to come undone, and they were waking up in the morning and finding out it was worse today

than it was the day before. >> it's the latest crisis to rock the financial markets. insurance giant aig teetering on the brink of bankruptcy. this is a colossal firm. if it fails, the ripples would travel far and wide throughout the global economy. >> all of the sudden who would have dreamed this other bombshell goes off that's aig. if you think loehmann brothers was complicated to figure out, aig was monumentally bigger. >> aig is this massive insurance company, but they also had a division called aig financial products, which would offer something called a credit default swap. >> a credit default swap is a contract between two people, one of whom is giving insurance to the other that he will be paid in the event that a financial institution or a financial instrument fails. >> so it's an insurance contract? >> it is an insurance contract, but they've been very careful

not to call it that, because if it were insurance, it would be regulated. >> aig essentially facilitated the creation of a lot of these mortgage securities by essentially providing an insurance policy should they go bad. but because the derivatives market had been deregulated, aig could do this without any requirement to put up any reserves. it's like an insurance company selling you a life insurance policy and not having any money when the time came to pay off. and the time came to pay off. >> after its credit rating was ra downgraded overnight, aig must raise at least $40 billion and fast. >> you had a full-scale run on aig. and there was a real view, by the way, that if aig went under, the game was over. >> aig does business with every major financial institution and in 130 countries. >> aig will destroy much of the capital formation process in the

western world. >> paulson, bernanke, tim geithner, they saw the risk that this could be not just a fire that would burn wall street down, but that could burn down our economy and burn down the world economy. >> it is uncle sam to the rescue, but oh, what a price tag. >> the federal government is saving insurance giant aig from possible collapse with an $85 billion loan, all of it your money. >> the move was designed to calm and bring stability to the financial markets. did it work? maybe down the road, but not today. >> another anxiety attack on wall street, even after the aig bailout, the dow tumbled another 450 points. >> in your 30 years of being down here, have you ever seen a market like this? >> no, never. >> hank paulson and ben bernanke are working very hard, but it doesn't feel as if they're in control, and that's very, very unsettling. inferior phone detected.

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the $85 million the federal reserve put up to save aig from

near bankruptcy was not enough to calm terrified investors that the next disasterer is around the corner. >> banks are hoarding cash, reluctant to lend to each other. >> banks are reluctant to lend for cars, homes making wall street's main issue, potentially putting economic recovery even further out of reach. >> the markets are freezing. the whole american economy is built on the ability to lend and borrow and to invest, and all of the sudden, companies throughout the country who borrow because they're buying equipment, they need to make payroll, they can't borrow. millions of people start losing their jobs. >> the economy is sinking, and we're close to a depression. forget the recession. >> it wasn't just a lost job, it was a lost job and am i going to have a bank to go to get my retirement from. where am i going to deposit a check? ben bernanke and hank paulson were really concerned about whether or not people would be able to go to an atm. >> treasure secretary paulson

told congress last night that a bailout is the only way to prevent a collapse. >> america's economy is facing unprecedented challenges, and we're responding with unprecedented action. >> it is no stretch to say that after this week, the era of big government is back. >> it is an urgent request from the bush administration to congress for $700 billion to quickly stabilize the financial system. >> thursday afternoon we started to hear about this thing called tarp. and tarp had many different variation, what it was going to be. but basically, they were going to infuse capital directly into some of these companies. >> this troubled asset relief program must be properly designed and sufficiently large to have maximum impact while including features to protect the taxpayer to the maximum extent possible. >> that $700 billion projected price tag isn't pretty, but the president says it's a big package because it is a big problem. >> my first instinct was to let

the market work until i realized i'm being briefed by the experts of how significant this problem became. and so i decided to act and act boldly. >> george w. bush understands that he has to put his ideology aside, put 30 years of small government, no taxes, small budget aside because the country needs it and the economy needs it. >> opposition seems to be growing here in congress for the legislation that could be the most important of mr. bush's presidency. >> this isn't legislation. this is extortion. >> this is a huge cow paddy with a piece of marshmallow stuck in the middle of it. >> please, please don't betray this nation's great history. >> by the rich minority. >> main street went to wall street today to protest the bailout plan. >> people say why give the banks

money? we could give money to homeowners to pay off their mortgage. is it fair that a company that should be going bankrupt is getting a handout? >> if this package goes through, the way i look at it, they've just mortgaged our future. >> they live by the free market. then let them die by the free market. >> there were a lot of people shouting let them fail. they got themselves into this situation, and it's survival of the fittest. this is what capitalism looks like. >> the last thing in the world i wanted to do was be going up to congress asking for these kinds of things. it is a terrible position to be in. the only thing worse is the alternative. >> if the credit markets are not functioning, jobs will be lost. morehouses will be foreclosed upon. the economy will not be able to recover no matter what other policies are taken. >> i know we will be able to live up to our side of the bargain. i hope the republicans will too. >> thank you very much. >> good day, and what a day it's been so far. the president's financial bailout plan has suffered a

major defeat. >> they go up to capitol hill, and the bill fails. and the results are dramatic. [ closing bell ] >> wall street watched washington with shock and fear as the bailout package went down on capitol hill, the dow went down like a sub. >> this is the biggest point drop that's ever been seen. there is virtually no american who is not feeling this one way or another. >> just wiped out everybody's 401(k)s. >> pure disgust with the politicians. there is absolutely zero confidence in what's going on here, none. >> paulson called me that night, stunned and scared. people were days away from not being able to take money out of their atms, and it was happening around the world, not just in the united states. it was a more dangerous global crisis in scope than anything we'd seen since the great depression, and we were effectively out of ammunition. >> two days after the house killed the financial rescue package, the house leadership is determined to pass it tonight and pressure the house into

taking action. >> to democrats and republicans who have opposed this plan, i say step up to the plate. let's do what's right for the country at this time because the time to act is now. >> we fail to act, the gears of our economy will grind to a halt. >> this is the greatest market disruption that's happened since the crash of 1929. reality finally imposes itself on capitol hill. >> the motion is adopted. >> given a second chance, the house did an about-face, easily passing the $700 billion bailout of the financial industry. >> there were moments this week when some thought the federal government could not rise to the challenge, but thanks to the hard work of members of both parties and both houses, and the spirit of cooperation between capitol hill and my administration, we completed this bill in a timely manner. >> in the aftermath, people criticized paulson for this, that and the other, and that's

fine. but the truth is if he hadn't been there and they hadn't intervened, we never would have crawled out of that hole. >> they rescued the financial system. like it or >> our so-called ownership society didn't make the break, but at least we saved those wall street banks. included for $40 dollars!es we're included? included! ♪ ♪ at t-mobile get the unlimited plan and the latest phones included for $40 dollars. feels so good to be included.

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there are new details tonight about what may be the largest swindle in wall street history, an alleged $50 billion ponzi scheme by former nasdaq chairman bernard madoff. >> what would you say to them? >> when you have a collapse on wall street, i always think of it as the water going out of a lake or something. and suddenly you can see the roots of those trees. you could see all the ugly stuff that gets caught in them, including dead bodies. that's how i feel, that the water went down so much, and everybody was like, that's bernie madoff down there. >> a wall street whiz with a golden reputation, bernie madoff earned trust from many of his clients because he made them money, lots of it, or so they thought. >> bernie madoff was a modern day dr. jekyll and mr. hyde. he had a legitimate life that was highly successful and he had a darker secret that fed his

need for success. >> madoff allegedly had been using new investment money from clients to pay supposed profits out to other investors. under the weight of a tumbling stock market, the scheme had collapsed. >> desperate investors and their lawyers scrambled to madoff's east side offices friday, looking for their money. they were turned away in the lobby. >> there has never been a ponzi scheme on the scale of madoff, ever. we're talking thousands of people who thought that they had millions of dollars socked away for retirement. suddenly found out it was gone. >> rose and jack lance say they invested every penny of their savings with madoff. >> we start today sell our furniture, some of our things that we value. so that we should have some money immediately. >> then there's 91-year-old ian fear man. he had to take a job at a grocery store after losing $700,000 to madoff. >> the human suffering from madoff caused, i don't think we

can ever fully grasp. homes had to be sold. college educations truncated, people had to come out of retirement, go to work at whatever job they could get. and for those people, the madoff fraud is never going to be over. >> what may very well be the final steps of freedom for perhaps the most despised man in america, bernie madoff entered a federal court in manhattan today and pleaded guilty to the greatest investor fraud in u.s. history. >> i think the connection between bernie madoff and the financial crisis was one fundamentally by trust. it was about a loss of trust in the system, about a loss of trust in people that you thought were worthy. >> we all trusted the free enterprise system. we trusted these deregulated markets to foster our prosperity. all of america felt that they had been betrayed by wall street. >> the stock market just can't seem to find a bottom.

>> it's day after day, week after week, and it's hurting the public morale. >> there is a deep sense across the country that those who were not responsible for this crisis than those who were. >> the scary thing is at that time the united states had already thrown a lot at this problem and the recession was getting much worse. we were losing 750,000 jobs a month. >> just this week there was a job fair at dodger stadium. 500 jobs available for ushers, food workers, security, 9 to $18 an hour, part time. 500 jobs. 4,500 showed up. >> it's a lot of competition. i'm 55 years old trying to get a job. it's heart breaking. >> millions of people lost their jobs. millions lost their homes. cities and towns were devastated. and, on the other hand, wall street survived. quite nicely, i might add. >> after they got their $84

million bail out, aig executive spent hundreds of thousands of dollars on spa treatments. >> they were getting their manicures, their facials and their massages while american people were footing the bill. >> your company is now bankrupt. our economy is in a state of crisis. but you get to keep $480 million. >> it's been a continuing source of frustration that essentially no one at the big banks was ever prosecuted or held accountable for this. >> i do not think that we did anything wrong. we did not cause the financial crisis. >> there were a lot of people who made a lot of mistakes. the question is whether they were criminal mistakes. it was hard to make the case. >> you're going to jail. you criminals. >> you should go to jail. >> there's just part of us that wants justice, and sometimes justice is not what you should be asking for. you should sometimes just

realize a system is broken and needs to be fixed. that said, wall street never changes. >> there's always going to be people out there who are paid to try to find a loophole or if there's a regulation to try to roll back the regulation. it never ends. it never will end. >> that's why wall street has always been a very dangerous place, and it remains a very dangerous place. there's plenty of reasons why the same thing could happen again in the near term. >> you can buy the cure but you won't get burned on wall street. $10, $10 right here. >> the results of cbs and "the new york times" survey reveal the financial hardship is taking a psychological toll on families. but there is one silver lining in an otherwise heart breaking report. the challenge has motivated people to learn new skills, and more than half are confident their next job will be as good as their last. though the american dream has evaporated for some families, at

least for now american optimism has proved to be a renewable resource. and perhaps the most important tool on the road to our recovery. television on. >> hbo did a lot of its best work when it was bending a genre. take something that's familiar and give it some chili pepper. >> advertising is based on one thing, happiness. >> is there any taboo that you wouldn't break? >> not if it was a funny idea. >> what is wrong with you? >> there is so much different storytelling and so many different stories being told about so many different people. >> i don't think dramatic series television has ever been stronger. >> there's no longer this theory of what popular entertainment must be. >> who are the