appreciate your appreciating this country. jesus right. all right. young turks viewpoint with eliot is next. this is viewpoint. in time, it's criminal the f.b.i. has launched a criminal investigation of j.p. morgan chase following the $2 billion trading loss. die dimon keeps his seat and his pay package. sources told the f.b.i. it was preliminary and routine given the bank's huge losses. like other investigate orders the f.b.i. will focus on

morgan's accounting practices and the way it timed the failed speculative trades. the f.b.i. may have to get in line. the security & exchange commission could fine morgan and the federal reserve and banking schmidt have announced plans to look into it. timothygit geithner added his voice to say the failure strengthened the case for stronger financial reforms. mitt romney's senior advisor eric burnstrom said the bank could take care of the problem itself and the government should stay out. >> there is accountability. people will be held to account for the losses that occurred. there was no taxpayers money at risk. >> that's how it works in a public market. >> despite a handful of protesters there was no accountability at the shareholder meeting. jamie dimon kept his $23 million compensation, title as chairman and had the full backing of the

bank's board. so much for learning from someone's mistakes. i am joined by felix and the scourge of wall street. i will not use the vampire squid metaphor at this time even though i am dying to do it. felix, with ahat should we do with jamie dimon? should he be the chairman and the ceo? what do you do with the guy. >> he shouldn't be chairman of the board. it exists to provide oversight over the ceo. when he is the chairman, that's nots happening. investment bank boards are generally pretty toothless but making the ceo and the chairman the same person is ridiculousthe maint ridiculous. he is on the board of the new york fed. >> i was screaming about that last night. i was apoplectic as is elizabeth warren. the f.b.i. now looking at this. matt, what do you think? is the fbi going to make a criminal case?

is this them putting out a press release? this one of all of the things we have seen seems to be the least likely to be criminal the most likely to be hor end on this bad judgment. >> it's unclear what kind of criminal case they could meek make. there could be an accounting issue or whether or not they disclosed they had on time to their shareholders, but it's terrible judgment. however we want to look at it, whether it's a criminal case or not. clearly, it was an awful terrible thing that happened. >> it seems to be an argument for fundamental restructuring as if we needed that to be made once more. a small footnote issue: am i right your old nemesis lloyd blankfei. is he going to call up jamie dimon and say it's your turn. >> chase had the quote/unquote distinction of being the good bank where goldman was taking the negative press from people like me. exactly, chase managed to escape. >> is there another squid that can wrap itself around?

>> i am running out of marcheen ma'am mal mammals. >> a squid is a mammal. learn something every night from matt. >> that's why we love him. >> and yet, in many ways what jp portion portionan was doing was worse because goldman sachs for its squid-like tendency is confined to its own sort of little high net worth corner of the world. morgan chase takes deposits from every mom and pop. >> and the president. >> and the president of the united states. anyone who has more than $250,000 on deposit, they want to bank with j.p. morgan chase because it's too big to fail and they know that all of that money is backed up by the government even though it's not officially guaranteed by the fdic. they get these deposits in. they are a utility bank. and it is their job and duty in return for that implicit government backstop to take those deposits and lend them out into the economy. what do they do instead?

>> tell us. >> they take the $360,000,000,000 and put it in a hedge fund in london. >> can i put this in plain english? j.p. morgan chase is doing what we don't want them to do taking the federal guarantee, gambling in the casino making either big money, which they keep or losing big money and making us bail them out. >> that's why we want the voelker rule. jamie dimon is lobbying against it. >>. >> saying look how profitable we are. he is happy with the money the london-based hundred fund makes. they love the profits because they never think inevat this timeably they will lose it in one day. >> the president will -- we will come back to this was calling the good bank jamie dimon was getting accolades. they are doing what we want to have stopped using the federal guarantee to borrow money, get our money and play with it in the casino.

>> this is exactly what the glass-steagall act was designed to present, to separate federally insured depository banks from banks and insurance companies so we don't have the risky behavior mixing with the federally insured money. chase is infin fin italy more dangerous. >> the holding company. >> they are not really a bank. this is really a bank. this is really dangerous and something the public really has to worry about. >> and the thing that is troubling to me is that the president quentwent on "the view" yesterday. he went on yesterday and it was aired today speaking in glowing terms about jamie dimon's management style and then you have romney's advisors saying this should beka kept merely -- this isn't a government issue. which is worse? the president praising jamie dimon or romney saying this is not a matter for government intervention? i don't understand either of those statements. >> we know it's about an election year and both of these

candidates want to make nice with wall street and companies like this because they want the campaign contributions. it's pretty transparent. >> doesn't anybody see the political upside to being a populist to saying once again we have seen the carnage. >> it does not get you big wall street campaign contributions. look how much money. >> i wish someone told me when i was in. i missed that lesson. >> obama, you know, is down enormously from four years ago from what he is getting from wall street. he needs to be able to, you know, put some kind of a line underneath that. >> i want to come back to something you were saying a few moments ago that they have turned morgan chase into a hundred fund. you wrote a spectacular blog in which you crunched some of the numbers. a large piece of the profit that j.p. morgan chase has been booking over the past couple of years has come from this unit. >> 25% of j.p. morgan's profits came from this london hedge fund which had $360,000,000,000 in assets under management which makes it one of the biggest if not the biggest hedge funneled

in the world. no one knows it exists really so what does that do in your mind to the credibility of the claim that was being made by jamie dimon that these were just hedging positions? it's laughable? right? >> hedging in the way all hedge funds are hedging. you can come up with some position somewhere else in the bank which you are quote/unquote hedging but the great genius of ima drew in charge of this, was that every time jamie dimon asked her to put a hedge she would turn that into a few hundred million dollar of profits. you are hedging and making billions at the same time. >> the first indication to me these are not just hedges was the fact she was being paid 14 million a year. you don't pay somebody 14 million a year if they are a risk manager? right? they have to be a profit center to get that compensation? >> absolutely not. clearly this isn't just a hedge. to me, it underscores the weakness of what the volumeker rule was going to beker rule

was going to be. it would have been able to technically claim somehow that this was a hedge and that activity would have been exempted. that tells you how transparent and how ridiculous the volker rule was. >> part of that is because the banks have lobbied so extensively. when paul volker announced it, the theoretical divide between depository functions and proprietary trading was pretty clear. the banks then created the loopholes you could drive. >> exactly although there is a silver lining that the volker rule has not been nailed down exactly yet. the sec still has room to look at what happened here and to say, you know what? we have to crack down on banks' ability to do these kind of trades. >> let me take their side a second to flesh out: one of their response has been look this is only $2,000,000,000. we can absorb it. why is everybody so upset? how do you respond to that? >> because it's about risk management. it's about $2,000,000,000. it's about saying that if j.p. morgan, who is meant to be the best risk management house in

the business and jamie dimon who is completely hands-on and completely on top of everything single risk trade at the bank can suddenly wake up one morning and find himself $2,000,000,000 in the red, that means that no bank has the ability to do these kind of things in a risk-freeway. >> this is similar to what we saw happen with aig and aig had another small london-based unit that was doing trades. >> aigfp. >> making sums of money like this unit was. but the parent company wasn't aware they had this enormous liability that blew up and destroyed not only the company but almost the entire economy. so this is the danger here if they don't know this is going to happen, anything could happen. >> is it kind of like saying look because i survived the heart attack doesn't mean i shouldn't care about what caused it? the fact they were able to survive this incidents, the fact they can be hit with a $2 billion worth of list if there had been choppy markets and other banks had the same thing happening at the same time, boom we could have a down

draft like the cataclysm of pre-08. this is the canary in the coal mine saying nothing has changed despite the claims by wall street we have learned we are not going to do it again. >> we have seen all of the trading that was made illegal by volume kerr moving over to london and being re-classified as hedging operations. so you have to be able to crack down on that somehow. >> is there a bank that you think does it right? is there some model out there? either a banker a bank some regulatory framework you could point to and say that's what we should do. >> we have in england, and it's about 9,000 pages of rules. you have to tick every single box. if the lawyers sign off on t it's okay. >> right. >> in the u.k. and the u.k. blew up as well. it's not like we got this right but in principle, i think we have a slightly better idea we say, we have a big hand waiving thing, you shouldn't be making

big bets if you are backstopped by the government. when a regulator sees something like this going on, they can say you are not allowed to do that. they don't need to pointed to a rule. >> they have the discretion. >> i can't imagine anybody here wants to give regulateors discretion. i know they never wanted me to have it. matt, we introduces you as the scourge of wall street. >> somebody you look to and say they have the judgment. they have the balance. managerial skills? anybody you know? >> the canadians. i don't know. they come into my purview, they have probably done something wrong. honestly i don't know who that person or organization is. >> is there anybody else who will be the good banker? jay me dimon was it. >> that's what's so disheartening. you would like to think there would be somebody there you could say this is good. >> it's important to point out when chase is being hailed as good baker they had destroyed jefferson county alabama and a

big rigging scandal for which they paid over a $100 million fine. they haven't had this kind of gigantic public scandal but they have been caught doing all kind of things. it hasn't gotten as much attention. >> you can't have $360,000,000,000 in excess deposits deposits which have been given to you by people to lend out into the economy and then refuse to lend those outed and send them off to london and call yourself a good banker. >> in a way, that may be the most important point. if we come back to what really matters, getting our disney going, you are saying they have taken this huge pipeline of deposits and instead of doing what we want and need bafrnlingdz to do, which is to lend to businesses to hire they are playing in the cansino. is there an answer to them? can we force them to lend? >> another important point. they aren't just taking the deposits but the cheap or almost free money they are getting from the federal reserve in the window as banking institutions and taking that money and using it to operate the hedge fund. >> that is why there is this

preverse saving you are getting zero zero zero. you are giving that money to the banks. >> furs making $500 bill dollars on $360 bill dollars, that means it's lile 2 1/2%. we would all love two 1/2% on our checking account >> that is the case. felix samon and rolling stone matt taibbi, great to have you on the show tonight. >> thank you. >> one of rupert murdoch's executives gets an inside look at a crime story. this time she is a defendant, rebekah brooks faces charges. coming up (vo) don't miss your chance to catch the premiere of the gavin newsom show. with special guests: >> i'm lance armstrong. if somebody put my back into a corner, i'm coming out swinging.

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team candidates are facing off. remember, dick lugar one of the most respected members of the establishment in the senate was already taken down by a tea party insurgent just last week. the three tea party candidates if they win in these deep red states and end up in the senate the same battles that played out in the house understand speaker bajner could play out in the 2013 senate with a tea party faction pulling republican leadership farther to the right. any possibility of beepship if that word exists in washington, would go up in smoke: this may sound lie jennifer granholm is politically direct on current tv. >>the dominoes are starting to

fall. (vo) granholm is live in the war room. >> what should women be doing? >> electing women to office. (vo) she's a political trailblazer. >>republicans of course didn't let facts get in the way of spin. >>do it, for america. enttv

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to move past that. i love creative people, and with all the vexing problems we have we need creative thinking. >>(narrator) with interviews with notables from silicon valley, hollywood, and beyond. >>at the end of the day this show's simple. it's about ideas. ideas are the best politics. ideas can bring us together. >>(narrator) the gavin newsom show. premiers friday at 11 eastern/ 8 pacific. only on current tv. >> last night, i talked about a conflict of interest for jameie dimon. there is no way the head of j.p. morgan chase should sit on the board of directors of the federal reserve board. >> that's what supposed to regulate what dimon's bank does. it's the organization that lobbies to relax the rules. we should be outraged this has continued. tonight, i want to talk about another conflicts of interest for jamie dimon. there is no way the ceo should also be the bank's chairman of the board. here is a simple question:

what's one of the primary jobs for a corporate board? answer: to pick the ceo and evaluate the job that person does. so would it make any sense for the ceo to be the same person as the board's chairman? of course not. then why do so many companies allow this? because shareholders don't stand up and exercise their rights as owners of the companies. today, the annual j.p. morgan chase sharehold meeting a resolution called to separate it. it should have passed in the midst of this rightful upset over dimon's management. 40% voted for it. the company says dimon is the best person for both positions. it simply defies logic. decisions like this mean people who benefit from the current arrangement can keep maintaining the status yeah. dimon doesn't mind being the one to evaluate his own job like he doesn't mind sitting on the board that sets the rules for his own bank.

look separating the chairman/ceo positions won't change the world of corporate governance. this illustrates an amazing blindspot in our corporate culture. dimon and others won't fix this simple conflict of interest. what a cloisterred world they live in. separating would show they see the problem and a a a a a a a a a a a a a a a a a a a a a a a a a a

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says, get this. we have gone from g 20 to g 0. no one has the power to guide the ship. does that mean we are headed for a rocky landing? joining me the author of "every nation for itself: winners and losers in a g space0." should i be sward there be be chaos. sprain what you mean by g zero. >> you should be concerned there is creation destruction. we have lived our lives in a world where the united states with its priorities, institutions political and economic systems drove globalization. post-2008 financial crisis, that's just not happening any more. it's not because the u.s. is in decline. whether or not you think the u.s. is in decline, we are not bail out europe or removing assad from power. we are not doing any of those things. the question is: if the u.s. isn't going to do it, is anyone

else? >> now nature abhors a vacuum. it has been created because you ran through the litany of global chrysesis where we are not the dominant force, where there was the awful overseas trip where the president was almost snubbed by every nation at one of the sum missed and nobody paid much attention to what he wanted. if we are not there, what fills that void and what results? who wins? who loses? >> right now nothing does. nobody filled it out. the binges if they are going to get through this crisis will be because they are doing it themselves. the crisis is taking longer. the recession is deeper, hurting more average bingeseuropeans but no one will bail them outed. >> let me ask the question: could china step into the void? we have been living in a moment where delinism is the ideology of the sent assessment of the moment, fallen off of the cliff, don't have the political wherewithal. china has 3.5 trillion of reserves? could they have step in and they

have chosen not to or do they not have the power? >> they could make a much bigger move into europe if they wanted to show and the markets would like this that they were going to provide a big deal for the germans to help with the broader bail-out. the french of course, you remember nicholassarkolas sarkozy said when sarkozy was president -- not today -- how about some cash? the chinese said no. >> he was like the high school kid going to daddy for a loan and daddy said you are on your own now. it was sort of a debilitating moment for europe where they realized they had to dig deep into their pockets. >> right. >> do they have the wherewithal to do it? >> the china's could have given the money but there was no quid proceed quo suggested by the french or anyone else in europe. >> the french aren't used to doing things that way. >> they aren't but the chinese are much more, you know, sort of i would say, opportunistic in this regard but the chinese don'trun with one person. they run by consensus.

the only way to get them to make a strat eastic move toward europe is over time incremental. >> let me ask the question: why are we at g zero? has this been a dissipation of the u.s. capacity to flex the levers of power? has they governed from thewold close of rallied with a war 2 on broken down because our trade dynamics no longer dominate? what happened? >> two things have happened. one is for 30 years, there has been a shift in the underlying balance of power away from the u.s.-led global institutions the u.s. towards china, the developed word toward the developing world the debtor states toward the creditor states. the u.s. plus allies here, you are underlying balance of power is here. at some point, that will snap. the defining moment when it hit was the 2008 financial crisis. were it not for that there would have been some other tsunami to come along. >> if there was a trend lined that was inevitable but the cataclysm of '08 in themetastasized

this. >> that's right. >> we are standing there kind of like the empiror finally has no clothes. people are saying thank you for your lessons but we don't want to follow any more. >> let's be clear. if the united states decides that we don't want to remove assad from pour in syria, that's a big problem in u.s. but much bigger for the sawediz. if we are going to take our troops out after obama spikes that ball, it's a problem for us. it's a beggar problem for the pakistanis and indians. globally speak, the is hurt comparatively less by not being the global policeman, by not being the lender of last resort than other countries. >> will we be missed? will those domestic regional coalitions of power come back to us and say, we actually wants you to reassert yourself because they will recognize the umbrella of our power actually protected them from some pretty ugly situations? >> in a lot of indications, we will. that doesn't mean it will necessarily be articulated that way. all of america's alleys in asia

with the exception of indians, more balancing role have been turning to obama and hillary clinton saying you have to come back because we are concerned about chinese dominance. there are many kuntz trees in the middle east but they are damned if they can say that given the domestic populations. it's more difficult. >> what you are saying is that we were the beneficient parent but nobody was an appreciative kid? >> i wouldn't go that far. you talk about iraq and afghanistan a lot think america's powers was a double-edged sword. in the absence of the united states doing it and no one else filling the role we will be missed. >> does chinese make a decision after their transfer of power? there is going to be new government toward the end of this year? is there going to be a more aggressive foreign policy on their part. >> there will be a more assertive policy but china is on a path towards becoming the world's largest economy. when it is it will be a poor country, going to act radically different than americans did in that position. >> we will have