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liz: time to take it off the desk and go to a jewelry shop in sherman oaks, california. take a look at this guy and what happened when two robbers started smashing display cases with hammers. the 82-year-old shop owner ran over and pushed them and chased them out of the door. he said he wasn't scared. he was trying to protect what belongs to him and his hard work. police are still looking for sus -- suspects. david: 82 years old. we'll look at ism manufacturing survey. economists expect a slight drop in the index. january was the best rate of monthly growth since may. liz: up next a special monn with melissa francis on the road in austin, texas with jpmorgan chair jamie dimon.

it is exclusive. >> i'm melissa francis here's what "money" tonight. welcome to austin, texas. we're going behind the business of jpmorgan chase, the largest bank in the u.s. chairman and ceo jamie dimon predicted the housing market would come roaring back. new data shows it is the strongest it has been in years. so where does he see the next big rebound in the economy? we'll ask him in a fox business exclusive. plus, a bang or a whimper? sequester gloom and doom reaches a fever pitch but will it really be as booed as some say? david walker, the former comptroller general is here to cut through all the noise and nonsense. california businesses reach their breaking point with high taxes and crushing regulation don't have to be their future. arizona governor jan brewer has a plan to steal businesses away from the golden state. she joins us to explain. even when they say it ace not it is always about "money"

melissa: first let's take a look at today's market moment. we were so close. stocks continued the march to all-time highs for much of the day. stocks sold off in the final minutes of trading with the major indices, excuse me, finishing in negative territory. still the dow scored its third straight month of gains. the s&p and the nasdaq posted their fourth straight months of gains. the dow came within 15 points of the all-time high this afternoon before falling back. it settled 110 points away from the all-time high. now to our top story, unless you have been living and you a rock you heard those shrilling alarm bells warning about the dire impacts from the automatic spending cuts that kick in tomorrow! tomorrow! we've been told we'll feel the pain immediately. listen to what democratic congresswoman maxine waters

said today. >> we don't need to be having something like sequestration that's going to cause these job losses over 170 million jobs that could be lost. melissa: are you kidding me? 170 million jobs? wouldn't that be every single job in the country? joining us in a fox business exclusive, david walker, former u.s. comptroller general and come back america initiative founder. welcome to the show, david. >> thank you. melissa: are there like 155 million jobs in the country? how could we lose 170 million jobs? >> we can't. the fact is america is not top 25 in math and obviously washington is not top 1000. look, we'll have an impact because we're talking about 85 billion over 700 billion. that is how much of the budget that is affected but there is so much hype on this it is ridiculous. including some of the assertions that it will harm

our military readiness irreparably. we spend as much as next 15 nations combined on defense. get real. a lot of impact will not be felt immediately because in the a number of areas, for example, furloughs, you have to give 30 days notice. and so i think some of the people that are hyping this big-time are going to be embarrassed when they realize that yes, there is some pain but not nearly what they are claiming is going to occur. melissa: it is amazing they're talking about how much pain is out there. congress is in session today. believe it or not, looking at house schedule they don't even have any events on this tomorrow? >> the fact congress gets off one week for every federal holiday. they get at two-week spring break and they plan to take off august? how many americans get that? i never had that in my life. it is time that they start working full-time, to start solving problems. no deal, no break.net. it is time to --. melissa: wait, wait. what does that mean exactly?

>> what that means there is an online petition to ask congress to work full time. namely don't take a week off every federal holiday. don't take a two week spring break. don't take august off it unless and you until you get a grand bargain. we're going from short term crisis to short term crisis treating symptoms not the disease. it is a global embarassment how washington is acting right now. melissa: how do you communicate to the americans the long-term dell triment to the country? a lot of people don't understand necessarily what the cost is down the road, they believe the hype that if you cut spending now it hurts the economy? >> if we want the economy to grow not only now but overtime, if we want to generate more jobs, if we want to improve our competitive posture, if we want intergenerational equity we need to start putting our finances in order. the truth we need to spend more on investments and more on young people now but less

on consumption and less on seniors. we need more revenues, but we need to get it through comprehensive tax reform. government has grown too big, promised too much, waited too long to restructure. but it is not too late but we need to get on with it. melissa: you say it is not too late. you mentioned a lot of different things that have almost no hope of happening. if you had to take a baby step forward what would you start with? >> leadership from the president of the united states. president george w. bush was terrible on this issue and so far president obama has not led. he is the chief executive officer of the united states. he is 23 days late on his budget. he still doesn't even have a budget. he has not laid out a credible plan on paper that can be looked at to restore fiscal sanity in this country. so for the president to lead. he is the chief executive officer. melissa: all right. david, thanks so much for coming on the show. >> thank you. melissa: socal important might not be so golden after

approving prop 30. have you heard about this? the tax increases meant to help fill the state's budget deficit but they could be one more reason that businesses are looking to relocate. neighboring arizona is putting forth major efforts to lure businesses there. it has got some pretty tempting incentives. arizona governor jan brewer joins me now. governor, tell us what are you doing to lure businesses there right now? >> well, we are over here in california, up in the northern part of silicon valley and we're here to tell people that arizona is open for business and that we are competitive. melissa: so what are you doing? just grabbing them while they're walking down the street and saying come to arizona? >> no, we've actually established a office up here in santa clara, which is our satellite office, to reach out to the people in the area in regards to technology and other businesses, to tell them that we have, did things differently in arizona than what california has done and we are business-friendly and

that we've got tax incentives. we've reduced personal corporate taxes, personal business taxes. and we have the incentive programs that they perform. they get more incentives dollars. and that we've got a skilled workforce. we've got an educated workforce and we believe that we've got the best deal in town. and we're just a short step away from california. so if they have got ties here they can get back and forth. melissa: it is a great sales pitch. it is a great sales pitch. i'm ready to come myself. but let me ask you if the look at the corporate tax rate it is really not that different. 6.9% for arizona. veesus 8.4% from california. come on. they have got hollyyood. they have the beach. they have the mountains. they're looking at finally having a budget surplus this month. so it seems like they're getting their economic house in order. it's a tough time to be battling california right now, isn't it? >> well, you know, the bottom line is is that, arizona is very competitive

to california. every percentage point really, really counts. they have so many rules and so many regulations, so many loopholes to jump through the, first thing i did when i became governor because i knew we had to be business-friendly was put a moratorium on all rules and regulations so there is sustainability and predictability. that is what businesses need. they need to be able to operate and know from day to day, month to month, that things aren't going to change. with our reduction in our taxes, we are competitive and our lifestyle is fabulous in arizona. if they want to come to the beach, it is an hour. they can be back in an hour. melissa: there you go. let me ask you, what do you think of the nonsense going on in washington with the sequestration? we're all sitting here with tonight is the big night where the clock turns? what do you think? >> unbelievable. it is absolutely unbelievable. it is unfortunate we have to come to this point in this

time. why haven't they got the job done? i would like to say that i believe that the president ought to have led. he has not done that. it is very, very disappointing to leave people in the position that he has done. and, they are real cuts. it will really hurt job growth, particularly in arizona. particularly those states that have defense contractors. melissa: well what is the impact going to be on your state? because there has been so much hype about that. i don't know if you heard maxine waters saying it would cost 170 million jobs earlier today. you know -- your state in particular, that is a little much. what is the reality of the situation in your state? >> well, in regards to state government it will be about, probably $140 million the first year. but that is not my big concern. i have got my staff looking at that my concern is my defense contractors in arizona. it is going to have a traumatic effect. i would imagine from the job

loss in regards to that. we're trying to get the numbers on that. we have raytheon which is a huge defense contractor as well as others. so it will hurt as we work hard to create a good environment. then we have the federal government led by the president just letting us all down. you know, they need to do their job. they need to respect the people that elected them to do that job and for them to simply blow us off, is just unfortunate. melissa: but everybody wants to hold on to their things. we have to cut spending somewhere. governor, thanks for coming on. we appreciate your time. >> we do need to cut spending but it needs to be strategic. melissa: okay. we hear you. thanks for coming on. all right, coming up our exclusive interview with jpmorgan chase ceo jamie dimon. the u.s. economy is struggling to gain traction. what does he think will kick-start growth in 2013. up next, stocks are within their striking distance of their all-time high. consumer debt has risen for the first time in four

years. where are the best places for people to put their cash? we'll speak to the head of chase wealth management and chase consumer banking. more nonany straight ahead [ male announcer ] it'simple physics... a body at rest tends to staat rest... while a body in motion tends to stay in motion. staying active can tually ease arthritis symptoms. but if you havarthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day

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melissa: so we are gearing up for our exclusive

interview with jpmorgan chairman and ceo jamie dimon. now we're going behind the business to get a look inside where bank executives are seeing investors parking their cash, what customers are actually spending their money on. it is a lot it turns out. are americans feeling great about spending now? joining me are barely fuller, ceo of chase wealth management and ryan mcinerney, ceo of consumer banking. great to have you both here. are you having fun on the bus tour? >> we've been having fun. we're traveling all around texas, meeting clients and talking to employees. melissa: you have cowboy boots on and belts. i don't know if everybody can see that. let me ask you. i was looking at a lot of data you look at intern anily to order to see what people are doing. i was shocked how people are spending. looking for data the week ended. this is year-over-year thing. you can't say it is seasonal. talking about travel and entertainment up 11%. lodging 11%. auto rentals, 1%. airlines 10%.

this is compared to this week last year. this is not a fluke. like president's day or something like that. it is building. are people doing better?. >> we have 50 million customers that spend on debit cards and credit cards, first six years have been great. spending is up we're seeing across the board. they're buying furniture for their houses. taking families out to dinner. they're traveling more. things look at the beginning of the year. melissa: that is great. barry, what about clients in high net worth area. >> we focus on high net worth clients in the branches. similar to what rye ryan said. investment flows continue to be strong. when you get out in the field and speak people it feels really good out there. melissa: how in the world is that possible? washington is falling apart at the seams. gdp data is revised up to slightly positive. are people typing it out? i don't get it. what do you think, ryan? >> when you travel around

the country you get a sense of confidence. consumers are confident. they're spending and investing more as barry said. >> you really need to get out meet people, business owners and individuals. if you read the newspapers and watch tv you get a different view what is really going on. melissa: damn media. it is our fault again. i knew it. it always comes back to us. we're the ones that are to blame. let me ask you about investor day that went by. you talked about for us what is new vision for the bank. not for you. you're talking about cutting back the workforce. 17,000 across the board. 4,000 coming from branches. at the same time you're opening 100 new branches every year. how does the math work out? >> two different things going on. we are continuing to open branches. we're opening up 100 branch as year, every time we open up a branch it works. we employ people to open the branch. contractors, electricians and gardeners. we're changing the business. next year we'll have fewer people working in business

than last year and next year. two big things are going on. economy is getting better. house prices are coming up. foreclosures are going down. we had thousands and thousand of people dealing with foreclosures and defaults. as those things get better we need fewer people to do that. the second thing going on consumers change the way they are banking with us. they take advantage on tools, to make deposits on mobile phones and atms. we need fewer people in the branches to help them with transactional need. what happens the mix of people in our branches changes from transactional type focus to more advisory. and helping people with more complex needs. melissa: what is the revenue like from that? the biggest criticism we hear from analysts is that as you can't charge as much for debit card fees, overdraft fees. that is real source of revenue. with that gone you have to figure out another way to make the business profitable. how does that figure into that? >> the business is profitable. we've lost some us sos of fees. but we're having tremendous success deepening relationships with our customers. as a result deposit balances

are growing much faster in every market we're in an investment balances are up significantly. melissa: that is part of your job to get rich people in here, right? >> that is my job to make sure we have the right platform our our customers. chase private clients is perfect example. we have two million affluent clients at chase. these are clients with us for over 20 years. they love the branches. they visit branches three times a quarter. melissa: you say over 20 years. you guys were kind of late to that business. it was 2007 when you got into wealth management in chase. >> we've always been in the wealth management business. in 2007 we started a pilot called chase private client. our clients told us loud and clear they were looking for a different level of service. they were looking for access to very certain products. so we responded by delivering chase private client and we feel really good we can deliver this inside branches. melissa: you guys are great sports because your boss is right behind you and looking over here the whole entire time. we'll bring you out right after this. thanks to both of you. a lost pressure to sit there

with him watching you. up next we have the exclusive interview jpmorgan ceo jamie dimon. new data shows the u.s. economy barely grew in the fourth quarter of last year. we're going to get his take on which sector could bring it roaring back. he is walking right over right now. do you ever have too much jamie dimon?

melissa: all right. two very favorable calls yesterday on jpmorgan chase and bank chairman and ceo jamie dimon. both bank of america, merrill lynch and oppenheimer say jpmorgan should outperform its pierce in the next few years. piers. generous of them since they're one of them. there are tighter calls for regulation on the industry and much discussion abouu the idea of breaking up the big banks. here to talk about all of that and forecast what jpmorgan's own data indicate where the next rebound will be is jamie dimon, chairman and ceo of jpmorgan. along with chase executives,

you remember them, ryan mcinerney and chase summers. thanks for being here. >> good to be here. melissa: are you having a good time on bus tour. >> we love the bus tour. we thank them for what they do. it makes us all proud of our people and our country. travel around get out of washington and new york it is an amazing country. >> speaking of washington there is lot of nonsense going on with the sequestration. seems like we're a million miles away from that on the eve when dramatic cuts are supposed to go into effect? does it concern you? what is the impact going to be? what is your reaction. >> i wouldn't call them dramatic. not the way you want to do something. i will leave that to the politicians. we have our own issues to deal with. that is washington's issue. melissa: you think that is the way rest of the american population feels? we talked about data you have that most of america is spending shopping and feeling good. >> i don't think they are focused on as much as media

in new york. melissa: our fault again? >> i'm not blame everyone. if you go to montana they're not talking about sequester. melissa: yeah. >> they're hoping our government collaborates and does the right thing. this is small thing. we need a big thing. we need a big bargain. we need fiscal reform. entitlement reform. tax reform. this is almost unfortunate side issue. melissa: how critical to long-term growth? >> a big deal is critical to long-term growth. this will be a small negative in the short run. melissa: speaking of government, i want to play a little interchange between elizabeth warren and ben bernanke that happened last week and get your reaction to it. maybe. do we have it? nope, we don't have that. okay we'll try to bring that back in a second. so ben bernanke, one of the questions that he did face, was this new study that came out of the imf and it talked about or one of the economists from the imf talking about the benefit

that big banks get from low interest rates. this is this $83 billion benefit. what do you think about that? >> just honestly read the study. someone basically said that there is implied rating benefit from government because moody's and standard & poor's did that forget what someone said. look what the market does. that subsy did does not exist in the marketplace. the world doesn't necessarily buy things based on moody's and standard around poor's. when you have the actual people buy our debt, we pay a pretty hefty risk premium. always have. i don't know where the numbers come from. melissa: they were talking about the benefit from the interest rate overtime. >> it wasn't well done, the study. it is artificial. we're using missed facts to come up with bad policy. melissa: at the end of the day if they raised rates what difference would it make to you? >> if they raise rates? melissa: that is the argument artificially low rates help you make extra profit. >> that is even sillyer. low rates hurt our profits.

the american public doesn't know that we already, we pay the fdic $1.5 billion a year. we're already paying huge thinks to the government to pay for other banks, small bank failures. i don't buy the argument that is one-sided. one day people will sit down to have a factual conversation why you have big banks, why you have small banks and come up with rational policy. melissa: i'm really feeling daring. we'll try the sound bite to see if it happens again. let's give it a shot. >> the benefits of being large are going to decline over time which means some banks will voluntarily begin to reduce their size because they're not getting benefit they used to get. >> i read you on this. i read your predictions on this in your earlier testimony. so far it looks like they're getting 83 billion for staying big. >> that is one study, senator. you don't know whether that is accurate number. >> we'll go back and look at it again if you think there's a problem with it. but does it worry you? >> of course. i think this is very

important. i think we need to, we're putting a lot of effort into this. melissa: so my question to you is, what did you send elizabeth warren for valentine's day? i'm not sure she got it. >> i have a fine relation with her. this is one study i think is quite unfactual. if you look at american business enterprise, there are big companies and small companies. jpmorgan chase does things with small banks can't do. we kept city, schools, states, philanthropies alive when no one else did, okay? we checked this number. the small banks and big banks do more lending in the crisis than the big banks did per dollar of capital. i'm perfectly willing to get involved in the debate. it should be factual and not one thing taken out of context. elizabeth and i have a great relationship. i want here to come on a bus trip with me to do what we have done for america. in the past five years we lent 7.5 doctor trillion to --

7.5 trillion dollars to consumers and companies. that's what we do and we're damn proud of it. melissa: she talks about regulation against too big to fail having failed itself. what do you think about that? do you worry about her going forward breaking up banks? do you -- >> look, we have a common interest in eliminating too big to fail. so i don't think anyone thinks we should have the too big to fail concept. it should look like a bankruptcy. we're in favor of that. we and the regulators and everyone working toward that purpose. we need the american public to believe it. we need our senators and congressman to believe it. but they haven't finished all the work. let them finish. at end of all that people believe it is true. break up big banks and sitting here why chinese banks dominate american finance, okay? america has the best, widest, deepest, financial capital markets anywhere in the world. okay. i'm talking not talking about wall street. venture investing, individual, corporations. it is part of the engine that made this country great.

before we really mess up with that, let's have a thoughtful dialogue about it and not just sound bites. melissa: we'll squeeze in a quick break. we'll call elizabeth warren, see if she wants to come out on a bus tour. she will probably take us up on it. stay where you are. we have a lot more with jamie dimon and rest of his team on the other side of the break. we'll be right back. , have given way to sleeping. tossing and turning where sleepless nights yield to restful sleep. and lunesta®(eszopiclone) can help you get there.

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with jamie dimon, jpmorgan chase chairman and ceo and barry summers, chairman of chase wealth management and ryan mcinerney, ceo of chase consumer banking. glad to have you all here. ryan, i will put you on the spot in front of your boss, how do you feel about that? >> that's all right. melissa: wasn't very long ago it sounded pretty crazy. who will trust banking on their phone. that has become enormous. >> it was concept couple years ago to a real channel for us. that is important for our customers. in the fourth quarter, 6% of all deposits made on a smartphone. 6% of all the deposits across the country. it is great. makes it easy to bank with us. they can do how they want, when they want and do it themselves. melissa: why are you opening more branches if mobile is so huge. >> we wan want help them with mortgages and start new businesses. >> clients still come to the branches.

they may a do a transaction on a mobile device they would have gone to a branch for but our branches have changed. we added 3,000 offices in our existing branches without adding a square foot. we changed the way the branch looks. people are coming to the branch not necessarily to do the transaction. we give them a choice. they come to the branch to sit down with an an advisor to talk about investment needs. melissa: jamie, you complain people don't focus on this part of the your business and this is the heart of the your business. >> i'm the general manager here. these guys are the quarterbacks on the field getting this stuff done. we're making huge investments. small business, commercial banking, branches an technology. 30-year record profits. we have been nonstop investing. we are still a battleship company. what did the press write about? job layoffs? we're making huge investments to grow in almost every community. this beautiful branch back here this is perfect example coming in. tell them how many people

visit every quarter our clients? >> every quarter on average customers visit us fours times. small businesses visit four times. 3/4 of customers are in regularly. old customers, new customers, of the they are regularly in the branch because they need help. melissa: let me tell you about the loan to capital ratio. that is another thing people are complaining about. you have to reprays them and at the same time deposits go up and up. what are you doing to turn that around. it is absurd what are you doing to loan more money? that is what got us in the crisis but that's what analysts demand you do? >> we're doing business with small businesses all across the country. we're number one sba lender three years in a row. we continue to do more and more with the small business community to lend them grow and start businesses. it has been a great business for us. it is also true we haven't seen as much demand from our small business clients what they which they like. but we think that will come. economy comes back.

we'll be there to help them. >> middle market lending has grown ten to 15 percent every quarter for the last ten quarters. large corporate lending is wide open. capital markets are wide open. mortgage origination is going up. it is going up. we're creating so many deposits hard to use them all. anyone that wants a loan we make the loan. melissa: housing, where do you think we're in that cycle? >> housing clearly turned. you here people complain about it. too tight. appraisals are too tight. income demands are too tight. we haven't opened up securitization market. this is area where government and banks want to get it done. reopen securitization market to make homes cheaper and more affordable. four years after the crisis we still haven't done that. melissa: i have to ask you about two news items out there right now. senator harkin, senator defazio, trading and speculation tax that would target complex trades and financial firms. what would that mean to the market?

what would it do? >> let me go, we had the best, widest, deepest, most transparent capital markets. there are millions of ideas. there were flaws in it. we always said we should have reform. you can have a conversation this will fix that but a thousand things are coming down. there should be a dialogue what you want to fix, what do you want to keep. not throw the baby out with the bath water. melissa: will the tax hurt that? >> deends what they're taxing. melissa: taxing trades. >> taxes get passed onto the customer. gas tax gets passed onto the customer. sales tax passed onto the customer. make it slightly more expensive for investors to vest and. i don't know details of this tax and there may positive things i'm unaware of. melissa: what do you think the move by some shareholders to separate and chairman and ceo role? >> that is not exclusive to jpmorgan. melissa: no. >> i think of investors, boards, should have the flexibility to decide what's appropriate for that company with its own circumstances at the time. they're perfectly reason to separate. there are perfect reasons to

put it together. there is one academic study say separate it. stocks did worse. enron, worldcom, had separate chairman and ceo. their directors and chairman and ceo. separate people dominate rest of the board. my board wants everyone equal. the lead director we call the presiding director so they're not above. at any point in time my board, 11 members, six can fire me. they can change the chairman. they can change the ceo. that is way they should be. if they thought it is inappropriate they could decide. if you start dictating management human situations you're limiting ability to do something. you will find it hard to run a company. if i would not have gone to bank one if i had a separate chairman. life was too short. it would be too hard looking over my shoulder, maybe he wants my job. you know what? if it happens it happens. i personally don't think it should be legislated. >> what would you do if it happened? >> if it happened where? legislation? melissa: happened at jpmorgan chase? you said you wouldn't have gone to bank one if they

were separate and had one looking over your shoulder? >> board will decide what is appropriate for our company. if they decide it should be separate i will probably take their advice. melissa: does it hurt your feelings people are pushing for this after all you've done through the financial crisis? >> no. this is what i told you. speaking to investors, a lot of savvy investors think you should have flexibility. most of the people asking for this are unions. it is perfectly legitimate. they're shareholders too. but they shouldn't dominate the scene. let people decide. if you owned a company you would want to decide. you wouldn't want it predetermined for your board. so let's have debate. we'll see how it goes and that's life i don't think it is that significant issue. i'm not going to spend anytime worrying about it. melissa: ryan. let me ask you as you go out and expand and out more and more branches how do youed decide where the tippingpoint is? i feel like everywhere i go i feel there is chase branch on every corner. >> i'm glad you feel that. we want to make sure customers feel convenes.

we study how customers use the branches, what behavior looks like. we try to make the determine when we're at a right place. we have a lot of progress. we have a thousand branches in california. three or four years ago we had six 600. melissa: do you agree with that. >> absolutely. dynamics of branch would be profitable three or four years. >> we visited the branch in san antonio. just opened in the community. it was great. we have a great team of people. they spoke four languages. >> how many accounts they already have? i had it is amazing. >> it has been great. investment accounts. small business vts. consumer accounts. mortgages. it is just we're seeing that all across the country from san francisco to orlando to miami to l.a.. melissa: all right. we'll squeeze in another break. thanks to all three of you. appreciate your time and candor. up next, we convened our "money" power panel including top banking analyst chris whalen with reaction to everything we

just heard. we'll be right back. don't go away.

melissa: so we went behind the business of jpmorgan chase chairman and ceo jamie dimon. we heard his take on everything from the health.

u.s. con to the future of his firm. let's bring in our all-star "money" power panel to react what he said. chris whalen, executive vice president. dennis kelleher, better market ceo. scott martin, united advisors chief market strategist and fox business's very own dennis kneale. chris, let me start with you. what did you think? >> listening to jamie he called himself the general manager. i think that is a very good characterization. when you were talking about governance and separating the ceo and the chairman's role but he also alluded to the lead director. what we've seen since sarbanes-oxley legislation is the roles of directors have evolved. so even though you don't call them the chairman the lead director is really performing that role and he is up advising the ceo which is how it should be. i don't like the c suite inhabitants sitting on boards because they report to the board. it is really good i think as a general matter to separate the chairman and ceo role because it is a check and balance at the end of the day. look at citigroup.

melissa: dennis, what do you think? >> well on that point i agree with chris. melissa: sorry. >> on that point i agree with chris. more interesting point i thought jaimie has got two big problems. one is terrible am niche shaw because of the financial crisis we went through was the worst since 1929. it cost this country $12.8 trillion. it is largely the result of too big to fail firms. the second problem he is wrong on the facts. too big to fail alive and well. they get subsidies and unfair competition. it is detailed in today's "new york times" in a column by simon johnson. for him to say unfactual and they don't get advantage of subsidies is flat wrong. melissa: i'm not sure that is exactly what he said. i'm not sure that is fair. scott, i don't know if you want to weigh in. i don't think he is in favor of too big to fail. i don't think it benefits his business model necessarily. scott, what do you hear. >> that is what i took away from it too. to dennis's point, jamie dimon said something that was really interesting. get on the bus tour and

drive around to see what we've done for america. i mean i found that a little egotistical. i would turn that around. look what america has done for him. america brought business to jpmorgan when they didn't go down the street to ubs or bank of america that was a little bit tough for me. melissa, don't forget, listen, jpmorgan, like it or not were part of the tarp bailout. they took $100 billion from taxpayers. they invited government in. government will be a long term houseguest as far as they know. that is why the regulations are the way they are. >> they invited the government in? government forced its way in. >> they took the money. melissa: dennis kneale, talk. >> a lot of beating going up on jpmorgan. they're the biggest small business lender, probably in the world. >> subsidized. >> certainly in this country. i think jamie dimon is a great ceo. when he tried to say this shouldn't be legislated. should be up to the board and shareholders separating chairman and ceo there is no evidence it actually helped any companies. when he said worldcom, separate chairman and separate president.

i think you guys are being too negative on jamie dimon. >> worldcom is great example. >> he is best bank ceo. and he was surly, what you guys are not listening too. melissa: go ahead, dennis. >> couple quick points. for every dollar in bank earnings we'll see this year, there $3 worth of subsidies. that is a fact. >> based on what? >> subsidized. >> for irv dollar they earn in profits -- that is not true. >> start with the fed. fed is sub sigh diesing the industry $100 a quarter. >> because they're buying bonds. >> right. look at cost of funds over last 10-year. used to be 120. it was 1 of last quarter. >> anybody buys the bonds can sell to the fed. you say they only buy them from jpmorgan and banks. >> no. look, too big to fail is dead because the big banks can't survive without subsidies. they want survive without off-balance sheet finance particularly leverage. >> that doesn't mean -- >> doesn't mean it is dead.

it means it is alive and well. >> no. >> the problem because jpmorgan chase has got roughly a 2.3 doll trillion balance sheet by assets is anybody going to let at that bank fail today or any one of the other two big to fail banks? they're not. they will fall into the comforting arms of the american taxpayer yet again if it happens. doesn't matter if you have a fortress balance sheet if everybody else around you is crumbling and there is nothing but wreckage. that is why too big to fail has to end. melissa: jpmorgan would be well in favor of getting rid of too big to fail. i think they wouldn't mind seeing their competition fail during the next financial -- >> actually that is not quite true. >> it has failed over the years. that is one thing benefited them. they came out one of larger standing banks in this whole issue. that did help them. jamie dimon even referenced that. the other point about the fed is interesting one. that is common misconception i'm glad he did clear up. the fed is the bank's worst enemy. they have hammered the bank model. they crushed interest rates. the banks can't borrow short and lend long like they do

to make profits. fed to me even though they are subsidizing, i agree with chris is still the bank's worst enemy. >> we're forgetting, guys, jpmorgan what's was did not need a government bailout. we're saying 19 biggest banks paid back every dollar of the tarp bailout. we're still beating up on them. [all talking at once] melissa: guys. listen, we're going to take a quick break. we'll come back and continue this fight on the other side. we'll be back with more after this break. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is,

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melissa: you just heard this ceo of jpmorgan chase about what he thinks we have to look forward to. they're quick take on what he had to say. a very un dennis. i have to start with you. because we left and you were arguing a little bit about the $82 billion subsidy. even he said the math on that study was dubious. you want to stick your neck and believe in that one? >> i could show you the numbers. don't agree with the study. i would distance myself from that, but if you look at cost of funds, if you look at things like the fact that the banks are immune from the automatic stay in bankruptcy. what is that worth every year the? that is a huge number.

and then this other factor, you know, the bank balance sheets if you look at it, mortgages, sba lending, it is all subsidized. government sponsored entities by definition, and jamie happens to run the biggest and the best. but i think that at the end of the day you have to realize that government intervention in our markets is the dominant factor in this discussion. that's it. melissa: well, scott, what is your response? >> well, i mean, the government is going to be here for reasons we discussed. and that is the funny thing. that banks can be as bad as the one about the situation right now, but it was so -- the one thing that i thought was interesting, he talked about the coming back of the securitization market helping the housing market. to me it is doing pretty well on its own. i don't know if we need to bring back all that crazy securitization. there are lot of reasons the government should not be involved, but the fact that there were not before is not one of them. >> the nonbank